As wage negotiations at Eskom approach, there can only be one real winner. On one hand there is a bankrupt power utility that is struggling under the weight of a R480bn debt pile and depends on cash injections from the fiscus for its survival. On the other hand, there are Eskom’s employees, with the majority union being the National Union of Mineworkers (NUM), who will argue that workers should not bear the brunt of Eskom’s maladministration.
And it would seem they haven’t. According to MyBroadband, Eskom pays the third-highest average salary in SA — R785,557 per year. The NUM says it will be negotiating for a 15% salary increase at Eskom to sign a three-year deal until 2024. Inflation, meanwhile, increased to 3.2% in March.
It’s hard to guess what the outcome will be, but history tells us the wage settlement cannot be 0%. That’s because of the precedent set by public enterprises minister Pravin Gordhan, who in the last round of wage negotiations in 2018 overruled former Eskom CEO Phakamani Hadebe, who had refused to offer any increase at all.
Former Eskom chair Jabu Mabuza later conceded that Hadebe’s approach had been “tactically wrong”. In the end, Eskom penned a three-year deal with salary adjustments of 7.5% in 2018/2019, 7% in 2019/2020 and 7% in 2020/2021.
Since then, the world has been through a pandemic and Eskom’s financial position and SA’s growth prospects have deteriorated significantly. These wage talks, and others in the public sector, will again pit economics against politics, and this time there can only be one true winner.
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