Debt-laden power utility Eskom has declared a dispute with unions over pay increases, setting up the talks for an independent meditation process at the Commission for Conciliation Mediation and Arbitration (CCMA) — SA’s statutory dispute resolution body.
A date has not yet been set for the CCMA to hear the matter. The first meeting is categorised as conciliation and its purpose is to reach an agreement acceptable to both parties.
If no agreement is reached, the commissioner will issue a certificate of non-resolution and the case may be referred to the labour court or to the CCMA for arbitration, where the commissioner will make a final and binding decision, called an arbitration award.
Labour lawyer Michael Bagraim said: “By declaring a dispute, Eskom is saying: ‘We have reached the end of our negotiations and we are now calling in an external mediator to come and broker an agreement.’”
Eskom, which is buckling under a R401bn debt pile and depends on government bailouts to keep the economy functioning, provides an essential service and essential service workers are prohibited by law from striking.
The cash-strapped power utility started level 2 load-shedding this week to deal with “capacity constraints” due to breakdowns at various power generating units. Eskom says load-shedding will continue until Friday at 10pm to replenish the emergency reserves.
In the 2020/2021 financial year, Eskom received R56bn of government support, without which it would have been unable to service its debt.
In May, the utility said its 1.5% wage increase offer — conditional on unions agreeing to a proposed downward variation of worker benefits including overtime pay, travel allowances and employee transfer costs — is final.
Eskom spokesperson Sikonathi Mantshantsha said on Wednesday the power utility had declared a dispute as it had not been able to reach an agreement with the National Union of Mineworkers (NUM), the National Union of Metalworkers of SA (Numsa) and Solidarity, during round three of wage talks in the central bargaining forum.
Mantshantsha said the unions had rejected the conditions, “and instead placed demands for basic salary increases of 10%, 12% and 9.5%”.
“This [is] in addition to other demands for increases of an average 15% in benefits enjoyed by the employees,” he said.
“Eskom, which relies on taxpayer cash bailouts to maintain its going-concern status, has clearly demonstrated these demands are unaffordable.”
The NUM — which represents the majority of Eskom’s 44,772-strong workforce — and Numsa revised down their wage demands from 15% to 12% and 10%, respectively.
NUM energy sector co-ordinator Khangela Baloyi said they viewed the Eskom dispute as a “declaration of war”. “Eskom is essentially refusing to bargain by declaring a dispute on the first day of round three of wage talks. This means we are going to the CCMA, we will finish the negotiations there,” said Baloyi.
He said it was clear from the beginning that Eskom wanted to “collapse the negotiations. We are now back to our original demand of 15% and all other elements that were with it.”
Solidarity deputy general secretary Helgard Cronje said the union’s view is that “the affordability question is not as clear cut as Eskom is making it out to be”.
“If bargaining unit employees receive a 6% increase, it equates to R1.7bn,” said Cronje. He said the money Eskom spent on independent power producers [IPPs] and had lost to corruption “dwarfs the amount the employees bargaining unit are demanding”.
The unions said Eskom spent R28bn on IPPs in 2020, while their contribution to total energy generated amounted to a “mere 5%”. The NUM and Numsa, in a joint media briefing in May, said Eskom spent almost R72bn on coal in 2019 and R128bn on the Renewable Energy Independent Power Producer (REIPP) programme in the last financial year.
Numsa energy sector co-ordinator Vuyo Bikitsha said Eskom’s conduct “flies against the spirit and letter of our recognition agreement ... We can say the road ahead will be bumpy.
“Eskom has wasted a lot of money on the new power stations, abnormally high coal prices, private power producers [and] declining sales due to high tariffs,” said Bikitsha.
Numsa spokesperson Phakamile Hlubi-Majola said the Eskom dispute will now follow the dispute resolution process at the CCMA. “We are waiting for the CCMA to give us a date,” she said.
“It’s a boldfaced lie that our demands are unaffordable. On what basis are they making that assessment? It’s rubbish that they can only afford a 1.5% wage increase. They can’t thumb-suck figures and mislead the public,” said Hlubi-Majola.
She accused Eskom of negotiating in bad faith from the get go, saying: “The kind of behaviour they have displayed has been disgraceful at best.”
Update: June 2 2021
This story has been updated with new information throughout.
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