Struggling Eskom offers above-inflation wage increase

If trade unions accept Eskom’s latest wage offer, workers in the Eskom bargaining unit will receive above-inflation wage increases for the next three years.

According to Solidarity deputy general secretary for energy, aviation and defence Deon Reyneke, Eskom has offered workers 6.2% in the current year, CPI + 0.75% or 6%, whichever is the greatest in the second year, and CPI + 0.5% or 6%, whichever is the greatest, in the third year.

The three unions in the bargaining unit – the National Union of Mineworkers (NUM), the National Union of Metalworkers (Numsa) and Solidarity – will take this to their members and will reconvene with Eskom on July 5, says Reyneke.

If the offer is accepted, it will apply from April 1 this year, which means workers will receive the increase retrospectively for the months that have passed.

Eskom initially offered no increase, but had to change its position after striking workers disrupted operations and caused rolling blackouts. Public enterprises minister Pravin Gordhan intervened in an effort to get the parties back to the negotiating table. Eskom then increased its offer to 4.7% in the first year and an inflation-linked increase in subsequent years.

NUM and Numsa initially demanded a 15% increase, but later all the unions adjusted their demands to 9% in the first year, 8.6% in the second and 8% in the third year.

The wage increase comes against a background of doubt about Eskom’s ability to operate as a going concern. The utility blames this largely on decisions by national energy regulator Nersa’s decisions to award it considerably less revenue that it applied for over an extended period.

Moneyweb earlier reported that the median earnings of workers in the Eskom bargaining unit, mostly technical staff, is about R300 000. According to economist Mike Schüssler, this compares favourably with a teacher with a tertiary qualification and 25 years’ experience.

Schüssler adds that the inflation rate is currently not even 5%, and that few employers in the private sector can afford to give their staff an increase above the inflation rate.

In one way or another, he says, the consumer will end up paying for the Eskom workers’ salary increases. “We cannot allow a monopoly that simply passes its costs on to consumers, in the current milieu, to grant above inflation increases.”

Schüssler says everybody at Eskom should cut costs. The majority of consumers are poor, and those who are employed don’t get the same kind of salary increases as Eskom staff, who are already among the best paid in the country.

Earlier this week Eskom announced that it had taken gold (first) position in the category of South Africa’s Most Attractive Employer for Engineering and Technology students and bronze (third) position for Most Attractive Employer for Engineering and Technology professionals in the ‘South Africa’s Most Attractive Employer’ awards conducted by Universum Global.

Eskom said in a statement that the South African Student Survey and the South African Professional Survey are annual independent studies conducted by Universum South Africa.

“The Student Survey is done in partnership with the careers centres of all the state universities and the professional’s survey is done in partnership with Alumni Associations and Professional Associations. The survey questions respondents on a rage of career related matters including who they believe to be the Most Attractive Employers – those companies that they would most like to work for. The Most Attractive Employer Rankings are the official rankings generated from this study.”

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