SAFTU supports Eskom workers currently bargaining for wage increase

24 May 2021

The South African Federation of Trade Unions (SAFTU) notes the wage talks at Eskom, in which NUMSA is negotiating alongside NUM, and supports the workers’ demand for 15 percent wage increase.

In a parrot-fashion like the rest of the public sector and other state-owned companies at national and local level, Eskom has offered an insulting 1.5 percent increase in contrast to the 15 percent demanded by workers. To push through the throats of unions this insulting offer, Eskom has falsely accused unions of demanding an unreasonable increase for workers who “earn over R700 000.” This is a myth, as NUMSA and NUM have shown that they are negotiating for workers who earn between R175 000 and R477 300.

The implication of this myth is that the public will see workers at Eskom as spoiled and unjustifiably demanding a high percentage increase, whilst, Eskom executives win public sympathy and support for their refusal to accede to workers demands.

Despite their deliberate aim at garnering public sympathy by making out the wage demand as unjustified, their CEO and top executives have been earning whooping salaries. In 2020, the CEO of Eskom was paid more than any other CEO in the State Enterprises by earning over R8 million per annum. In 2019, 13 Eskom executives had earned a total of over R44 million, and the year before that, over R51 million. This is beside the fact that during the same period, 2018 – 2020, workers wage bill remained flat.

Using the R8.6 million earned by the CEO at Eskom in 2020, and the R175 000 earned by the lowest paid worker on the Eskom PayScale, it would take 49 years for a low paid worker to earn what the CEO earned in 2020. Before Eskom executives can rubbish the demands of workers, they must consider this pay gap which feeds into the growing inequality in this country.

The 1.5 percent offer accompanied by proposed changes to benefit packages by Eskom, is a pursuit for the “reset” or an introduction of the “new” wage system in the public sector that Minister of Finance, Tito Mboweni, spoke of consistently since his assumption of office as Minister of finance. Correctly captured in a joint statement by NUMSA and NUM, this a “restructuring” camouflaged as wage talks.

During a period in which food prices and prices of other household essentials are high, the demand for “real” wage increases are justified across all sectors. The increase of VAT few years ago, amid sustained inflation rates of over 4 percent in the past three years (except for 2020) and beyond, has made food and household essentials awfully expensive.

For instance, the general household food grocery in SA is R4 198 per month and R50 376 per annum according to household affordability index. Compared to the lowest paid workers at Eskom who earn R175 000 per annum, the annual household expenditure on food takes 34 percent of their salary. It is primarily against this background, inflation and the flattened wage increases for the past three years, that the “real” wage increases above inflation are not only required, but necessary.

But Eskom’s offer of 1.5 wage increases should be contextualised for what it is: it is a conscious policy carried out by Treasury to reduce government debt and minimize government expenditure on the beleaguered parastatals. The wage bill has been identified, both for government departments and state parastatals as a burden that increases government debt, and the crisis of deficit in the parastatals. Hence Treasury has set itself a target to flatten the wage bill for the next three years, and keep the increases below the inflation rate at the average of 1.2 percent.

In the PSCBC, government aims to dribble workers with the aid of yellow trade unions in COSATU by offering 1.5 wage increase, whereas this is a mere pay progression smuggled through another door. SALGA has also offered 2.8 wage increase, which is a decrease in real terms because it is still below inflation. In Eskom, 1.5 offer comes with new benefit package regime which seeks to hollow out all the gains workers have made so far. In essence, this is actually giving by one fold with the left hand, and taking ten fold with the other hand.

The other lie the Eskom executives have peddled is that “load shedding would increase during wage negotiations”. Beside implying that this increased load-shedding during wage talks will result from sabotage carried out by workers, the deliberate spinning embedded in this is utterly shameful.

But scapegoating the imminent loadshedding should not surprise us either. Instead, it should be understood as an attempt to shift the attention of the crisis that engulf Eskom from the looting and plunder of the past 13 years that crippled Eskom, to workers and the poor. On the one hand, they blame the so called “illegal” connections as weighing heavily on the current electricity grid, and on the other, blame wage demands for the inability of Eskom to stabilize its financial deficits. Every effort is made to shift attention away from the systemic looting and corruption that collapsed Eskom.

In the case that SAFTU lodged with the South African Police Services (SAPS) in March 2021, we highlighted the rot and looting that cost Eskom over R300 billion of unnecessary expenditure and landed it in a debt of over R400 billion. The monies were used as kickbacks to benefit ANC through donations, and through contracts with ANC investment companies and other cronies looking to cash out on Eskom. Bowmans and SIU have reportedly showed in their investigations, R161. 4 billion and R178 billion, marred in corruption.

The wage bill of Eskom workers represented in these negotiations does not even get close to these figures. Eskom executives should not scapegoat their sheer looting of resources on workers. NUMSA and NUM are correctly rejecting the proposed offer that is below the inflation rate, as that would undermine the buying power of workers wages on their living essentials.

SAFTU condemns the bad faith with which Eskom is negotiating, and their tendency to offload the crisis at Eskom onto the back of workers. It is not workers who looted and plundered Eskom, but cronies and executives who must face the wrath of the law. Reportedly, Eskom approved a deal that will cost it R4 billion extra with South32, the burden of such costs should not be offloaded onto workers through wage freezes or below inflation increases, and onto the consumer through skyrocketing electricity tariffs.

Issued by SAFTU, 24 May 2021