Eskom walks out of wage negotiations with unions

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 supposed 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.

“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.

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 which took place 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 not coming to the party, 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 that Eskom is putting to unions at the Central Bargaining Forum. Image: Numsa









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Submission to CBF

In its submissions to the CBF, the union 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.”

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