Stalemate in Eskom wage talks

Talks between Eskom and its biggest labour unions on wages have reached a stalemate, the latest crisis for the utility that’s struggling to boost electricity supply.

The unions “responded with dismay” after negotiations failed to reach a conclusion during the final round on Wednesday. That’s when Eskom highlighted that it was unprofitable and reiterated that it had made its final offer, the National Union of Mineworkers said in a communique. The negotiations will now be extended to a fourth round after the groups consult with their members.

Any protests by the workers may hit power supply further. Eskom generates almost all of South Africa’s electricity and has been implementing frequent nationwide power cuts that reached a record last year, mainly due to breakdowns by old and ill-maintained coal-fired stations. The sabotage of key equipment has also been rising in recent weeks, adding to the challenges.

The utility is “sacrificing workers’ benefits, pension payouts and wages in order to fund the bloated cost of primary energy”, the National Union of Metalworkers of South Africa said on Thursday in a statement. The group lowered its own demand to a 12% wage increase across the board.

Eskom confirmed that it has offered annual increases of 5.3%, 4.5% and 4% in the last negotiating round. It declined to comment further.

The company’s last major wage negotiations in 2018 broke down into labour protests, considered illegal because the utility provides an essential service, that resulted in electricity shortages. A three-year deal was then signed for pay increases of up to 7.5% annually.

The NUM called on its members to “remain resolute” and focused on its demands, according to the 8 June briefing document.  — (c) 2022 Bloomberg LP