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What Eskom workers really earn

But remember the bonuses …
Picture: Nadine Hutton/Bloomberg

The country is currently facing load shedding due to the disruption of Eskom operations by striking Eskom employees.

The management of the utility, which is currently at risk of losing its going concern status, earlier announced that there would be no wage increase or bonuses for employees this year.

This angered unions who are insisting on a 15% increase. The talks broke down and the matter was referred to the Commission for Conciliation, Mediation and Arbitration (CCMA).

Despite the fact that Eskom workers are classified as providing an essential service and therefore precluded from lawful strike action, workers went on a strike characterised by the intimidation of colleagues and alleged sabotage of Eskom operations, which resulted in load shedding countrywide.

Public enterprises minister Pravin Gordhan has since intervened, saying on Friday that the 0% increase is off the table, and it seems negotiations might proceed this week.

But how sound is the workers’ case?

Last week renowned economist Mike Schüssler angered unions representing Eskom workers when he tweeted that the average remuneration per employee at Eskom is R798 000 per year.

Schüssler went on to say that even if the income of executives and senior managers is excluded, Eskom workers still earn more than R600 000 per annum, on average.

In an article discussing Eskom’s unsustainable wage bill, Nedbank CEO Group Mike Brown quoted a number of R770 000 per annum.

The National Union of Mineworkers (NUM) angrily hit back at Schüssler:

About 37 000 of the 43 000 employees of Eskom as a company (not the group) belong to the bargaining unit. It is their salary increases that are now being negotiated between the unions and Eskom management.

Moneyweb has obtained a confidential document that sets out exactly what workers in the Eskom bargaining unit earn. These employees fall into 10 salary bands, with the lowest earners earning R135 390 per annum and the highest R595 410 per annum. Bargaining unit members thus earn between R11 282,50 and R49 617,50 a month.

Here is the table of salary scales implemented on July 1, 2017.

It is therefore clear that the majority of Eskom workers do not earn Schüssler’s average of R798 000 per person per year or Brown’s R770 000 per person per year. Brown in fact acknowledged that “the calculations were complicated” and that there was “some margin for error as a portion of salary costs could be capitalised.” He added that it was also not quite clear to what extent consulting fees were reported as salaries and wages.

Numsa spokesperson Phakamile Hlubi-Majola on the other hand told TimesLive that the average employee earns R135 000 per year, which is also incorrect.

Knowing the salary scales is one thing, but to be able to compare it with salaries elsewhere one also has to know what the job entails.

Moneyweb obtained this rough indication from an informed source:

  • The lowest scale, T04, refers to general labourers who earn between R11 282 and R16 915 per month
  • T06-T08 are the clerks and secretaries, earning from R14 330 to R27 292 per month
  • Artisans and power station operators are on scales T08-T09 and earn between R20 510 and R34 665 per month
  • Grade T11/P11 refers to senior artisans and senior unit controllers earing between R26 045 and R39 072 per month
  • Grade T12/P12 refers to supervisors who earn between R29 357 and R44 032 per month, and
  • Grade T13/P13 are entry level professionals who are not in management, earning between R33 085 and R49 617 per month.

In assessing the case of the Eskom workers it has to be noted that the utility’s expenditure on bonuses almost doubled to R4.2 billion last year.

In fact, on July 11 last year almost all Eskom staff got performance bonuses at an average of R88 883.35 per employee. While averages once again do not show whether the members of the bargaining unit got their ‘fair share’, the unions were quiet at the time.

The bonuses came at a time when Eskom on an alone-standing basis showed a loss of R870 million for the year ended March 31, 2017 and a few months before the cash ran out.

If Eskom was run like a business, would it have considered salary increases amid doubts that it could continue as a going concern?

Would its shareholder have ‘intervened’ to reopen negotiations with unions and take the 0% off the table?

No, but Eskom is a state-owned company. Funded by consumers and taxpayers. With a politician representing the shareholder. Approaching an election.

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Proper and very informative factual presentation by Antoinette Slabbert.

Very informative but how does this disprove Schüssler’s average. Managements figures are not included in the above. It is pathetic that there is this number of employees whilst Eskom has numerous third party contractor companies also involved and paid. My question who is running day to day operations Eskom or these outside companies?

Schusslers article suggested that it was improper for Eskom’s workers to strike as R770k is much higher what the average South African earns. This misrepresents the workers who are demanding higher wages’ true earnings. Whatever your views on the matter the argument should be based on the correct facts. Far to often in South Africa we abuse statistics or just use downright false statistics to further a particular ideaology.

Land ownership figures that says whites own 95% of the land because black individuals owns only 5% of the land is a prime example. It however ignores the ownership of the state and the ownership of tribal bodies.

Definitely updating my CV this morning.

As a teacher with a 4 year degree your starting salary in this country is around R18000 per month before deductions. This is only slightly more then what a general laborer earns at Escom. But if you are working for a school, before you are employed by the Department of Education, you can earn as little as R8000 per month. This may become an extended period if your skin color is too pale. In many cases these teachers who have been teaching for years earn less then laborers at Escom.

And then lets add into the mix the millions of Rands the Escom executives paid themselves as bonuses for ‘doing their jobs well’ a couple years ago..? We now know of course that they were not doing this. In fact the only thing they were doing well was supervising the looting and corruption..

If Brian Molefe is anything to go by, it is no wonder that Eksdom employees have a sense of entitlement.

Last three paragraphs spoiled a good article. Netcare shareholders would have intervened if doctors and nurses went on strike for better salaries. Non intervention would accelerate the company to non going concern statu and creditors would push for liquidation etc. We all know how messy wage disputes can get in South Africa.

Surely one needs the number of employees per job category before one can make any meaningful calculation on the ‘average salary’?

Agreed..and WHO out of those categories is striking etc. “Averages” are generally highly misleading as the reader is not given the full context. Poor form Mr Schussler, just inflammatory.

I saw a tweet this morning from Eskom saying something to the effect that if all workers are back at work, there shall be no load shedding i.e. everything will run as it should. I therefore wonder then, if they want to trim the fat, why are they also saying that they need all 40k-plus employees?

As @Vanman says: “one needs the number of employees per job category before one can make any meaningful calculation on the ‘average salary’”

There is additional info missing here…

Where is Snr. Management salary data?

The bottom line is the damn utility is broke and cannot AFFORD increases for its employees. It is apparently borrowing money at the moment to pay its salaries. So that inevitably means that you and I, the ever-loving S. African taxpayer, will be bailing them out.

More precisely, the electricity consumer will be coughing up first. Can it be any co-incidence that the Eskom strikes intensified around the time Nersa was deciding on costs for Eskom to pass on to the customer?
For that matter, is it any co-incidence that Eskom was offering a bare 0% increase while Nersa’s jury was out?
https://www.esi-africa.com/nersa-announces-decision-on-eskoms-regulatory-clearing-account/

@ Mr G. Exactly….soos genoem in ‘n post elders.

Its my suspicion, that the (unprecedented) 0% salary increase was carefully planned by Eskom, knowing it will lead to labour action, leading to disruption of supply…causing risk of load-shedding…so that the public & NERSA can be bullied into submission on higher tariffs. Not bad timing either, given the NERSA deadline.

Two birds with one stone: when a say 7% salary increase are offered, the unions may settle, as its better than 0% AND Nersa has given in to pressure as result of the unthinkable effect of a possible total blackout on the economy.

Consider the Eskom Pension Fund report from last year (2017). Total Member Contributions of R1.14 billion at a rate of 7.3% of salaries (excl bonuses) for 46 000 workers implies an average basic salary of R340 000.
(This will be understated as some employees don’t contribute at 7.3%).
This defined benefit fund is another cash cow for those on the Eskom gravy train (remember Molefe’s R30m benefit?)

Are the quoted figures total Cost to Company, or are they basic salaries to which one still needs to add the cost of benefits?

Valid observation – as a rule of thumb, you can add at least a third of basic salary to get to cost to company. That will then give about R16 000 pm for the person pushing a broom. Compared with the new minimum wage, that is not bad going.

It’s all well and good to show the salary scales of the various grades, but this is not cost to company. So even on whatever the averages are per grade additional benefits will accrue such as:- 13th cheque or Christmas bonus, medical aid contributions by company, first time home ownership (15 years ago they had the best scheme for staff) canteen subsidization, slow start car purchase assistance, performance bonuses, maternity and other free day child advantages, and probably a few others.
The scales seem to be based on Pattersons job evaluation – would love to see what the performance metrics are for this company – I have no doubt that efficiency and effectiveness don’t rank highly

SOE, civil service and municipal employees always seem to be earning bonuses that they, in view of the clown show that is South Africa at the moment, should not be entitled to.

This article is ok as far as it goes. However, the following also needs consideration. The table of salaries displayed are the Basic Rates for each grade. The table does not reflect other forms of remuneration such as Shift Allowances, Housing Allowances, tool allowances etc, nor other benefits such as Medical Aid, Pension Funds, Funeral Benefits etc. Also take into consideration annual paid leave, sick leave, family responsibility leave, study leave etc. There are also the annual and long term bonuses. Eskom employees also have access to Loans and low interest rate Bonds. There is also the company funded internal and external training/study which takes place. There will be other benefits not mentioned. The actual TOTAL COST TO COMPANY needs to be worked out for each grade to truly understand how much Eskom employees actually earn p.a.

Dear Eskom,

Your P13/T13 ENTRY level professionals, NOT YET in management are earning salaries much higher than private sector. Fact.

…and still some bonuses and perks?

Do they work harder at the SOE than private sector? Is there any shortage of graduates or skills that place them in high demand?

The figures quoted are basic salaries and do not include benefits and bonuses.Benefits such as housing benefits, medical aid and transport subsidies should be added at about 40%+ of basic salary.

Lesson learned..pick a number, any number, for as long as it has some truths (whatever the truth) and form an argument, any argument.

I have no doubt that the table is true in terms monthly salaries, but this is more-or-less (not 100% factual) what a Eskom entry-level engineer (systems engineer) earns:

Monthly Salary: R40 000
Pension Contribution: R5 400 (13.5% of R40 000)
Vehicle Allowance: R9000 (managers discretion’)
Housing Allowance: R2000
Medical Aid: 60% of fund of choice
Cellphone Allowance: R500 (manager’s discretion)
Car Insurance: R800 (manager’s discretion)
Subsidized Home Bonds
Overtime at at least 1.5 x monthly salary
Bonus (not guaranteed)

When you work on project sites like Medupi/Kusile, Eskom will:

Pay guest house accommodation for you
Pay you R600/day if you cater for yourself or R350/day catering included

Then there is other perks like occasional leave (can be taken as a nice lump sum after 5 years of service), paid studies, travelling arrangements, etc.

However, I do doubt that Mike’s figure of R798k is correct.

Seems like accurate information. We should also try to figure what union bosses earn?

The sabotage planners will use lower level guys as cannon fodder.

Mike could not figure things out, shows how useless annual reports and auditors have become.

Just remember this excludes the Overtime and Sunday time. This adds a lot as Overtime is time and a half and Sunday time is two times the rate.

It also excludes the pension paid by the company on behalf of the employ (This adds 7,5%). It does not include subsidised home loans which level I am not sure of.

The annual bonus would have added 12% to these annual numbers (2017).

This also excludes the medical insurance the company pays on behalf of employees I believe.

So the lowest remuneration would be closer to R160K conservatively and all the others would shift up a lot.

It is still not enough to bring you anywhere near a R770k average. What that number tells us is that executives and management must be earning bombs

These guys got 3 months pay as a bonus last year, just to let you know.

Eskom’s annual report for the year to March 2017 says employee benefit costs increased by 13.4% to R33.2 billion. Divide that by 46000 employees, and you get an average of R722 000. It is now 15 months later, so the figure will surely have gone up by at least 10%.

Back to Maths 101 – Browns number is correct – R770 000 average – Salary expenses / number of staff

If not : Eskom should present all buckets, number of people per bucket and basic salary versus other benefits.

This needs to be in the public domain – the public are paying !!

Heavily overpaid, under-worked, under-delivering and demanding a 15% increase. Plus:
– ungrateful for years of huge increases not linked to productivity
– disrespecting the people of this country for disgusting service
– disrespecting the economy and people of this country with years of massive price increases
– taking the culture of entitlement to extremes
– wrecked what was once a world-class organisation
‘With great power comes great responsibility’ except in South Africa

GROSSLY OVERPAID.

My daughter who has a four year BSC degree with 2 years experience earnings are at the lower end of Eskom’s general labourer (T04) scale.

with NO company benefits and NO bonuses.

lol I was engaging with Mike this weekend on his tweet.if you have a voice use it to report facts.

If analyses of the over staffing at Eskom are valid, surely that is at the core of the problem? As long as excess wages are being paid in an uncompetitive staffing situation, losers are built into the system, not only because economic wage totals are spread across a larger than necessary labour force, but wage increases are also inexorably built into the model. Bonus policy also needs to be addressed in that a corporation should only pay bonuses if it in a financial position to do so. The fact that some may be doing sterling jobs, but the organization is failing as a whole, doesn’t alter the fact that unaffordability reigns. Admittedly other problems of mismanagement and malfeasance also are a scourge, over staffing at all levels is one element that becomes endemic and should be rectified come what may.

It is just so easy: Provide an essential service – ie electricity. Make it illegal for anyone else to do so. And that’s it: You have a powerfull money making machine.

Just like TV licenses and toll roads.

Excellent article, giving perspective

A labourer earning just under R12000/m, excluding a bonus!
Lonmin drill operators earned R4000/m before Marikanq and went on strike to get R12000. They weren’t paid by tax payers…

The NUM response to Schussler is interesting. They don’t put forward another figure which tells me they don’t know the average wage (so that means they cannot know for sure that Schussler is incorrect).

i think both Schussler and Slabbert are missing the point. in my opinion, the point is Productive working or productivity. here how it should not work: you have 1 lazy person in a position and management think that there are not enough staff to do that particular job, then employ another in the hope that it will do. but then you have 2 lazy people and management thinks that yet 2 are not enough and employ a 3rd one and so it goes on and on ( by the way, this is the main problem with Municipal workers as well as other Govt department workers). At the end, which should have been a job that comfortably could have been done by one person that understands hard word and productivity, is being done by 4 , 5 or 6 lazy people. This is why at least 50 % to 75 % of all govt and other organisations like SAA, Eskom Municipalities’ employees can be done without. People should realise that you actually have to work to earn money and not just sit around for it. Productivity is key.

End of comments.

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