Business Maverick


After the Bell: The NUM’s outrageous salary demands for Eskom workers threaten SA society

After the Bell: The NUM’s outrageous salary demands for Eskom workers threaten SA society
Image: Adobe Stock | Wikimedia

It was reported last week that the National Union of Mineworkers (NUM) is demanding a 15% pay rise for Eskom employees. But actually, that’s not the half of it.

The NUM is demanding a 15% rise, and — this is a bit of a mouthful, but here goes — an increase in the housing allowance to R7,000 (I presume this is all per month); an increase to 80% of the company’s contribution to medical aid; a R1,000 cellphone allowance; an electricity allowance of R1,000; a R15,000 essential worker allowance; a R5,000 rural allowance; a 25% performance bonus; a R1,000 truck driver allowance; the two lowest pay categories to be scrapped entirely; reduction of the retirement age to 60; and 10 days of “African Renaissance” leave. I am not making this up.

There are other things too, which I don’t understand, like high- and low-voltage work allowances, a 5% “PSR authorisation” allowance and an “x-scheme” allowance. There is also a demand for the “separation of pay slips”, whatever that might mean. And there are some sly demands designed to support NUM’s business ventures, like permitting the introduction of NUMPROP, the union’s property investment business.

Now, I know that households are under pressure, that inflation is high, that food prices are going up, and (irony) electricity prices are going up by 15% and more. Obviously, it’s tough out there. But, forgive me, the sheer gall of the NUM is just without bounds. If Eskom employees were among the huge numbers of low-paid workers in the country, of which there are a shameful and enormous quantity, that would be one thing. But Eskom employees are among the most mollycoddled and well-paid workers in South Africa.

Eskom is unusual for a state-owned enterprise in that its financial reporting is excellent. Eskom’s integrated report for 2022 is 81 pages long and pretty detailed. Included in the report are the total salary bill and the number of employees. So, with a little basic maths, we can calculate that Eskom employees make a little under R70,000 a month. That’s the average. 

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And if Eskom was flying economically, you might say, well, paying those kinds of salaries might be appropriate. But the fact is that Eskom is an organisation that has failed the country. Much of the blame for that lies with management, some with the government, and some with decisions made years ago. But some of the blame, surely, rests on the workforce, too.

The sheer audacity of the NUM to even ask for this kind of increase is instructive of just how tone-deaf the organisation is. Does the NUM not realise how angry South Africans are about Stage 6 load shedding? Some of the details are equally telling: the NUM wants the performance bonus to be brought back to 25% of annual salary. On what basis would the company ever, in these circumstances, provide a performance bonus?

Let’s imagine the announcement: “Because Eskom produced even less electricity this year; because our organisation has created chaos in the country and stunted healthcare, education and small business; because our organisation has reduced economic growth to almost zero and has most likely pushed the country into recession; we have decided to give our employees a 25% bonus.” Really? Really.

It’s easy to get your knickers in a knot about this, but of course, it’s all part of the bargaining process. As it happens, Eskom has, over the past five years, kept its salary bill firmly under control. During the negotiation process, these demands come down, and obviously, unions don’t want to go in with a substandard offer. This is part of the game.

But here is the thing: Eskom has managed to keep its salary bill down, but it has done so by substantially reducing its headcount. Over the past five years, the total number of full-time staff and contractors has dropped from just under 50,000 to just over 40,000. That is a big decrease.

The question is, has that reduction contributed to the massive increase in load shedding? In addition, although Eskom workers are considered essential workers, the NUM ignored this legal dispensation and went on strike last year in support of a 7% increase. Did that exacerbate the spurt of load shedding we have been seeing recently?

Surprisingly, at least to me, Eskom’s revenue has been increasing steadily over the past five years and its overall debt is declining. That might change this year. But the organisation only exists because of perpetual government cash injections from the fiscus. This includes a huge debt takeover in the most recent Budget. It is now essentially a function of the South African taxpayer.

There was a time when unions in SA were fighting a good fight, and improving the lot of their members. The NUM itself was part of this process. But like unionism all over the world, excessive union militancy can destroy entire business sectors. The selfish and ardent pursuit of its own members’ interests to the exclusion of society as a whole gives not only the NUM but unionism as a whole a bad name. And ultimately it is self-defeating, because the only solution is to resort to the political system, and that could hurt the huge numbers of other workers who do need worker rights to support their much more righteous struggles.

The NUM should catch a wake-up. DM/BM


Comments - Please in order to comment.

  • Rowan G says:

    NUM is basically one step short of being a criminal organisation. We saw what happened last year during their strike. We hit stage 6 again.

    I promise you the same axe hangs over us, except this time it is for stage 8 and beyond.

    All NUM wants to do is extract as much as they can before the Eskom that they can feed off is gone.

  • David Mark says:

    Ah yes the NUM. The lights aren’t on, and nobody’s home.

  • Jennifer D says:

    They have ruined our economy, driven our country into the ground, stolen everything they can and they want an increase? If NUM had any intelligence they would realise the absolute contempt we hold them and their thieving workers at Eskom.

  • virginia crawford says:

    R70 000/ month and still they steal? Many people don’t earn this in a year! NUM doesn’t care about anything except money and power and don’t give a fig about what they leave behind. A metaphor for the state of S.A. generally.

  • Andrew W says:

    Let’s not forget that this is beyond the NUM. The public sector, paid for by the taxpayer, is looking for well beyond inflation increases. Against very much declining services and growing economic pressures on taxpayers. I am not convinced these jokers understand where money actually comes from.

  • David Pennington says:

    The beloved third world cesspit that is eskom, let them eat cake

  • Jon Quirk says:

    Didn’t Mr Ramaphosa effectively “birth”the NUM?

  • Dee Bee says:

    South Africa’s unions serve only to advance the power of the union bigwigs. It’s their gravy train and they’ll be damned if the good of the country get in the way. We hear from them that their members are suffering because of the high prices in South Africa and that government can afford to pay more because they just need to stop the corruption and hey presto! the money will be there! The unions ignore (willfully) a number of salient points:
    1) Much of our sharp rise in prices is because of corruption in state-controlled pricing: electricity, water, transport, fuel (the levies in SA are way higher than Botswana, for example), rates and taxes etc – which impact on the cost of production of everything from food and clothing to cars and housing, which drives up inflation even more.
    2) These prices are raised so much every year to cover the grotesque cost of ANC corruption and mismanagement – we (taxpayers) have spent half a trillion bailing out Eskom alone, lost another trillion + to corruption. All in? R2tn?
    3) The unions are part of this vulgar mess – they’re part of the tripartite alliance, so cannot plead ignorance. What have they done to halt the slide of SA into the abyss? Nothing. Just look at their ‘management’ of their own ‘investment vehicles’.
    4) If you waved a magic wand and got rid of corruption, there would be billions more in government budgets – and unions want that in place of service delivery. Our unions are part of the problem, never the solution.

  • Marlene Eckard says:

    Fire all of them and and let them reapply again, start over with new realistic pay packages.

  • Sven Coles says:

    God forbid common sense should prevail. The trough will run empty one day.

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