Eskom unions make big demands as wage talks kick off

 ·19 Apr 2023

Eskom unions are demanding a 15% wage increase for the embattled power utility employees, including performance bonuses, housing, electricity and cellphone allowances, and a once-off danger allowance, among others.

These demands come from Eskom’s biggest union, the National Union of Metalworkers (NUM), and others, such as the National Union of Metalworkers of SA (Numsa) and Solidarity.

NUM confirmed these demands last Friday (14 April), and negotiations are expected to start today (19 April) at Cedarwoods in Sandton, Johannesburg.

This wage negotiation comes as South Africa has been subjected to prolonged stage 6 load shedding, with some analysts reporting stages surpassing stage 6 over the past weekend.

This year’s wage negotiations follow an impasse in 2022 that led to an unprotected strike, forcing the power utility to agree to a 7% wage increase agreement after a week of protests that pushed load shedding to stage 6 for the first time in years.

NUM spokesperson Olehile Kgware said in an interview with eNCA that employees are not immune to the cost-of-living crisis in South Africa.

“Eskom employees are not responsible for the prevailing economic conditions, and their livelihood needs to be maintained,” he said.

The union’s demands are as follows:

  • 15% salary increase across the board;
  • Housing allowance to be raised to R7,000, and employees to be allowed to buy houses anywhere in the country;
  • Medical aid to shift to 80% (20% contribution by employees);
  • Cellphone allowance of R1,000;
  • R1,500 electricity allowance;
  • Once-off R1,500 essential worker or danger allowance, as well as a separate voltage work allowance on a sliding scale;
  • Performance bonus set at 25% of annual salary;
  • R20,000 study benefit per child; and
  • R10,000 car allowance through Eskom’s so-called vehicle X-scheme.

As part of these demands, the unions also noted that they want lower salary scales to be scrapped altogether and for all employees to be shifted to a specified level.

Additionally, employees should get four weeks of paternity leave without impacting contingency leave, and anyone retiring at 60 to leave with no penalties.

Eskom’s money problems

In response to questions posed by News24 on Friday (14 April), Eskom declined to comment on the three unions’ demands other than to confirm receipt, saying it had yet to complete a thorough analysis and costing.

However, the elephant in the room is where the unions expect the money to come from.

According to Bloomberg, Eskom will have received close to half a trillion rand in state support almost two decades since it started imposing debilitating nationwide blackouts in 2008.

This means the state-owned utility has survived on government bailouts since at least 2008.

Additionally, National Treasury briefed parliament on the Eskom Debt Relief Bill on Tuesday (18 April) and said the power utility may not borrow money for the next three years and that the company will not receive any other financial support from the government, News24 reported.

Treasury added that Eskom must fund all of its projected expenditure from the tariff raised from customers, including fixing its ailing power stations, such as the life extension of Koeberg and the multi-billion rand project to replace three steam generators in each of the nuclear power station’s two units.

This raises concerns that the wage negotiations will reach a deadlock, resulting in protests like those experienced in 2022, dealing a heavy blow to Eskom’s already fragile capacity to generate electricity which will likely cause higher stages of load shedding in the country.

According to News24, however, Eskom said it had contingency plans to deal with possible tensions that could arise during the wage talks, but these were confidential.

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