Eskom walks out of wage negotiations with union

Numsa says it will be consulting its members for a way forward, but strike action is still off the table.
Numsa accuses Eskom of 'taking money meant for workers and using it to pay billions to diesel suppliers, owners of coal contracts and independent power producers'. Image: Waldo Swiegers/Bloomberg

Eskom management reportedly walked out of wage negotiations at the central bargaining forum (CBF) on Wednesday after the National Union of Metalworkers of South Africa (Numsa) accused the struggling power utility of “taking money meant for workers and using it to pay billions to diesel suppliers, owners of coal contracts and independent power producers (IPP)”.

In what was the fourth – and meant to be the last – round of wage talks with the utility, Numsa says it is shocked by Eskom’s course of action but will go back to its members and union leaders to seek a way forward.

Apart from Numsa, the National Union of Mineworkers (Num) as well as Solidarity are representing workers’ interests at the CBF.

“Numsa is shocked and dismayed that the Eskom management under its group CEO Andre De Ruyter, has stooped so low as to collapse central bargaining, because it refuses to account for corrupt coal and IPP contracts that are being paid for through taxpayer money,” Numsa says in a statement.

“We have repeatedly requested that Eskom disclose in full the nature of these contracts, who the beneficiaries are, and [the] value, but they have refused.”

Despite the union’s disappointment with the breakdown in negotiations, Numsa spokesperson Phakamile Hlubi-Majola tells Moneyweb that strike action remains off the table for now.

“It’s [strike] still far for us right now. We don’t want to preempt the discussions that members are going to have about what we must do.”

Hlubi-Majola says only after consultations with members and other trade unions will it be able to decide on a way forward with the utility.

Commenting on the walk-out, Eskom’s general manager for people relations Dr Thulane Ngele acknowledged that negotiations with unions reached a deadlock on Tuesday. He further noted that involved parties may take it upon themselves to declare a dispute with the Commission for Conciliation Mediation and Arbitration (CCMA) to seek resolution.

“Yesterday we had extended CBF. We unfortunately reached a deadlock with our organised labour and reaching a deadlock means that the parties – or at least one party – has declared that we are at a stage where there is no prospect of reaching any settlement and therefore, the salary negotiations were closed,” Ngele said at Eskom briefing.

“Remember that we are an essential service, so in essential services, an industrial action is not permitted. So parties will have to go an interest arbitration where the dispute will be arbitrated, and an award will be issued.”

Wage demands

Numsa, which was initially demanding a 15% increase – across the board – for its members, later revised down its demands to 12% at the third round of negotiations in early June.

According to Numsa, the 12% increase demand would cost the struggling utility about R2.1 billion; this cost it says would include the cost of benefits for Eskom’s 28 300 employees in the CBF.

However, Eskom is citing financial woes as the main reason why it cannot meet the union’s demands.

According to a previous statement issued by Numsa on 13 June, the power utility instead offered increases varying between 4% and 5.3% for its employees across different zones.

“Eskom has refused to make any counter-offer on any of our demands simply claiming they are ‘unaffordable’ when they have not provided any financial statements to back this up,” the union says.

Wage increases Eskom is putting to unions at the Central Bargaining Forum

Image: Numsa

Submission to CBF

In its submissions to the CBF, Numsa put it to the forum that the increase it seeks from the utility will not impact Eskom’s balance sheet negatively, adding that instead the utility’s primary energy costs are what threaten to collapse it.

“We were able to show that Eskom can afford to pay workers increases, but they choose not to. De Ruyter and the board are taking away workers’ benefits and wages to fund dirty procurement contracts.”

The union further accused the utility of being complicit in a new form of state capture.

“The Eskom board and its management have no credibility. They are complicit in a new form of state capture, where they actively steal from workers, in order to benefit corrupt cronies who are politically connected to the governing ANC. This is why there is a refusal to deal with Eskom’s cost drivers.”

Read:
SA transmission firm seen hobbled by Eskom millstone

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Eskom should from the start have offered wage decreases of 30% for lower scale workers and 60% for higher ranked workers. Then they could have settled for -20 and -50%.
Numsa cannot at all back up allegations of corrupt IPP deals, or a new form of state capture.
The dire financial situation at Eskom is widely publicised, R 396 B in total debts. It received R 240 B in bailouts since 2008, and is still receiving R 20 B or more of tax money this financial year.
Starting packages at Eskom for new, unskilled employees is around R 380k a year, average wage almost R 800k per annum. So Eskom employees have relatively very good salaries with a real unemployment of around 45% in SA, expanded definition.
The trade unions have repeatedly accused sinister forces in favour of privatisation of Eskom to be behind the continuing sabotage at the utility. They know very well who are in reality are behind these terrorist acts. People who want the present management out, so they they can start again looting at a massive scale.
Trade unions have become complete forces of evil and destruction in SA.

Eskom had around 32k employees in 2007, and no loadshedding. It all went up to almost 49k, now it must be around 42k. Andre told us in November that there were about 42,300.
Of which more than 28k are members of NUMSA and NUM.

A bloated public and SOE employment sector is one of our biggest problems.

End of comments.

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