Business Maverick

South Africa

Eskom Calls Union Wage Demands Unaffordable in Tense Negotiation

A company logo sits on an Eskom Holdings SOC Ltd. maintenance truck door in Soweto, South Africa, on Tuesday, Aug. 8, 2019. Eskom, South Africa’s biggest polluter, said emissions of particulate matter that cause chronic respiratory disease are at their highest level in two decades as the state power utility’s financial meltdown has seen it skip maintenance and has triggered strikes. Photographer: Waldo Swiegers/Bloomberg

Eskom Holdings SOC Ltd. said the South African state utility is unable to agree to certain union demands over wage increases and declined to make an offer on basic salary until labour groups respond.

The loss-making electricity provider “cannot afford” proposals such as an improvement in pay inequality, according to a May 4 letter reviewed by Bloomberg. A request by unions to raise worker housing allowance has “no justification” and the required funds aren’t available in any case, the company said.Eskom has 464 billion rand ($32 billion) in debt and is the most prominent of the government-owned companies burdening state finances, while regularly resorting to power cuts to keep the grid from overloading. The utility bowed to pressure from labor in 2018 wage negotiations after strike action, agreeing to a one-time cash payment and annual increases of at least 7%.

The utility “is not at this stage in a position to table a possible offer in terms of a percentage increase to basic salary, as this is dependent on the union responses to the above,” it said.

An Eskom spokesman declined to comment further.

Eskom’s biggest two labour groups, The National Union of Metalworkers of South Africa and the National Union of Mineworkers, are seeking wage increases of 15%. Solidarity, a smaller group, wants 9.5% increases for its members.

“They must give us an offer,” said Livhuwani Mammburu, a spokesman for NUM.


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