Unions negotiating for higher wages at struggling power utility Eskom are set to meet to chart a way forward after talks between labour and the employer reached a deadlock.
The National Union of Metalworkers of SA (Numsa) accused Eskom of refusing to be held to account, saying the utility’s management walked out of wage talks after declaring a dispute on Tuesday.
“We must not be surprised if Eskom imposes a below-inflation increase again, as it did last year,” Numsa general secretary Irvin Jim said in a statement on Wednesday.
In an emailed response to Business Day, Eskom said: “The media statement of Numsa does not reflect what transpired at the CBF [central bargaining forum]. It is fraught with sensationalisation, inaccuracies and falsehoods. It is not worth it to engage with it, save to say that as Eskom we believe that we engaged in good faith throughout the CBF process. We have, under the current economic conditions and our financial constraints, proposed a decent offer which on average amounts to 4.7%.”
Eskom GM for people relations Thulane Ngele was quoted by Moneyweb as saying that involved parties may take it upon themselves to declare a dispute with the Commission for Conciliation, Mediation and Arbitration (CCMA).
“Remember that we are an essential service, so in essential services industrial action is not permitted. So parties will have to go to an interest arbitration where the dispute will be arbitrated and an award will be issued,” Ngele said.
Numsa, the National Union of Mineworkers (NUM), Solidarity and Eskom met on Tuesday at the CBF for what would have been the fourth round of talks that were scheduled to end on Wednesday. The CBF is a platform where unions and the employer discuss and agree on wages and other conditions of employment.
Numsa and NUM, which represent most of Eskom’s workforce of about 42,300 workers, are demanding a one-year, 15% pay rise across the board, while Solidarity is demanding a 5.5% overall increase.
Spokesperson Phakamile Hlubi-Majola said last week Numsa had reduced its demand to 12%, though the amount is still well above the headline inflation rate of 5.9% the Reserve Bank forecasts for 2022.
In a document seen by Business Day last week, Eskom is offering a one-year pay hike deal for increases of 5.3%, 4.5% and 4% for its 28,374 employees in the bargaining unit. Employees in the bargaining unit are spread across different salary scales.
“This offer is in full and final settlement of all the demands tabled by the trade unions in terms of the 2022/2023 CBF,” Eskom says in the document.
On Wednesday, Jim said Numsa and other unions submitted their revised demands and the expectation was that “we would engage in a final round”.
“However, after Numsa made its opening remarks, instead of engaging, Eskom management responded by declaring a dispute and then it walked out of the venue,” he said.
Jim said Numsa had “simply asked the question: ‘Why is Eskom taking money meant for workers and using it to pay billions to diesel suppliers, owners of coal contracts and independent power producers (IPPs)?’ Eskom, he says, refused to respond to the question and staged a walkout.
“ We have repeatedly requested that Eskom disclose in full the nature of these contracts, who are the beneficiaries, and their value, but they have refused.”
The power utility, which is saddled with debt of more than R390bn, has been described by ratings agencies as the single biggest risk to the SA economy. It is among several state-owned enterprises (SOEs) that have been hollowed out by years of mismanagement and corruption linked to state capture.
Eskom is struggling to keep the lights as a result of regular breakdowns at its ageing and poorly maintained coal-fired power stations. The parastatal has also been dogged by sabotage in recent months, compounding the power outages.
“Over the past four years, the bargaining unit employees wage costs remained flat between R16.9bn and R17.4bn, at most increasing by 2.3%,” said Jim. “During financial year 2021/2022, despite the unilateral implementation of a 1.5% [wage] increase on the bargaining unit, total costs declined by R483m.”
Jim said primary energy costs were leading to the collapse of Eskom. “Primary energy is a combination of coal costs, the cost of IPPs and the cost of diesel for the open-cycle gas turbines. Primary energy costs increased from R85bn in 2017/2018 to R116bn for the 2021/2022 financial year,” he said.
“That’s a R31bn increase over the past four years. Interim results released on December 15 have forecast a further R12bn increase from R116bn to R128bn for the financial year ending 2022.”
Update: June 22 2022
This article has been updated with new information
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