NUMSA rejects false narrative that Eskom cannot afford wage increases - Irvin Jim

Union is demanding 15% across the board wage increase, closure of apartheid wage gap

NUMSA rejects the false narrative that Eskom cannot afford wage increases

16 May 2022

The National Union of Metalworkers of South Africa (NUMSA) met for a second round of wage talks in the Central Bargaining Forum of Eskom from the 10th to the 12th of May. We met together with other unions the NUM and Solidarity to table our demands and get feedback from Eskom on the demands we put on the table in the first round.

NUMSA’s core demands are the following:

1.     We demand 15% across the board wage increase

2.     1 year agreement

3.     Housing allowance increase of R1600

4.     Closing the Apartheid wage gap

Eskom has not responded to our wage demand of 15%. Instead, Eskom has responded to the outstanding demand of resolving the Apartheid wage gap, or the ‘income differentials’ but it has not tabled a proposal for the wage increase. Eskom has tabled a proposal on how to close the income differentials in the following ways:

The issue of the Apartheid wage gap is an old issue. In 2016 an agreement was signed detailing how the gap will be narrowed over time by increasing wages incrementally in order to reduce the wage differentials. Eskom is attempting to confuse workers by making a proposal on this, but it is refusing to address the issue of the wage demand. Let us be clear, we demand that the income differentials must be reduced, and we demand an increase in wages for the 2022/23 financial year.

We also wish to deal with the false narrative that Eskom does not have money to meet workers’ wage demands. We reject this with the contempt it deserves. We made it clear at CBF that Eskom cannot claim poverty while they are spending billions on exorbitant primary energy costs.

Since 2016/2017 financial year the primary energy costs have jumped from R83 billion to R116 billion. In other words, they increased by a whopping R33 billion. The IPPs, coal and diesel costs contributed immensely to the ballooning cost of primary energy. If, for example, all 28 300 employees of the Central Bargaining Forum of Eskom got a 10% across the board increase, (which is an increase including pension fund, medical aid, 13th cheque, and other benefits), it would cost only an additional R1.5 billion per annum.

It must be noted that the wage bill including management salaries has remained flat since 2017 at approximately R33 billion. It is glaringly obvious that the wage bill is not responsible for Eskom’s poor financial position. Why are workers being punished for bloated procurement expenditure?

Our demands are affordable compared to what they are spending on diesel. These are the same people who are still overspending on diesel. For example, Eskom reportedly told NEDLAC that it predicted it would spend a minimum of R20.9 billion on diesel for the current financial year in order to fuel the open cycle gas turbines. This is on top of the R12.6 billion spent on open cycle gas turbines for 2021/2022 financial year. NERSA approved only R3.5 billion spend on diesel, but Eskom has exceeded this.

Last year NERSA allocated a minimum of 5.6% increase for workers wages, but Eskom imposed 1.5% increase, it is also attempting to impose a reduction in benefits as well because it claimed it could not afford the increase. This matter is currently before the CCMA and is being dealt with through arbitration.

Therefore, Eskom management has no justification for claiming they cannot afford our demands. Workers have not received a meaningful increase in two years and morale is very low, but execs continue to waste money paying for inflated contracts. Given these facts Eskom management has clearly demonstrated that it can afford workers’ demands and so, we will not accept anything less than a double digit increase.

We also condemn the actions of the Eskom Group CEO Andre De Ruyter who is undermining the CBF by communicating directly with workers. He has issued communication where he is making proposals and has even proposed a ‘final offer’ but he refuses to engage formally in the CBF. We reject this tactic as it is clearly designed to sow confusion among workers. If Andre wants to engage on wages he must do so in the CBF and stop undermining the process. Andre does not even attend the meetings. And this just shows that he has absolute contempt for workers and the bargaining process. A responsible CEO would want to ensure that he/she is present and is able to contribute meaningfully to the process so that we can make speedy progress. It is not in the interests of Eskom, workers or the public for talks to drag. But Andre is not that kind of leader and so we are not surprised by his behaviour.

We will be meeting again for another round of talks on the 6th to the 8th of June.

Aluta continua!

The struggle continues!

Issued by  Irvin Jim, NUMSA General Secretary, 16 May 2022