EXCLUSIVE: Eskom sticks to original wage offer of 3.75% in talks, unions dig in on their demands

Multiple union sources with direct knowledge of the matter told Business Maverick that Eskom said it was not changing its original offer of a 3.75% wage increase for the more than 27,000 members of the bargaining unit. The unions have not yet budged on their demands and as of mid-Wednesday afternoon unions were trying persuade the utility to make a renewed offer they could take back to their members. 

Solidarity, the National Union of Mineworkers (NUM) and the National Union of Metalworkers of South Africa (Numsa) are the unions involved. The talks come as winter sets in and the rotating power cuts that are slashing economic growth, fuelling inflation and causing massive inconvenience for most South Africans look set to worsen. 

Eskom agreed to a 7% wage hike in 2022, a deal that came after frustrated Eskom workers staged protests and wildcat walkouts. 

“We are a mandate-driven union and we asked Eskom on Tuesday to give us something to take back to our members. Then today they said their offer is unchanged,” said a negotiator with one of the unions. 

“We will revise our offer before we next meet with Eskom, but we need a mandate from our members and they need to give us something sellable,” the negotiator said. 

NUM and Numsa have tabled demands for a wage hike of 15% across the board. Solidarity, which mostly represents more highly skilled workers, wants CPI plus 3%. Inflation is currently running at 7.1%. 

In a financial presentation seen by Business Maverick, Eskom told the unions that its “financial position has deteriorated over a period of time, due to: Price of electricity that is not cost reflective; Above inflationary cost increases; Non-payment by customers; Deteriorating operational performance; Declining sales (expected to decline @ 0.5% p.a.); and an Ambitious capital expansion programme.”

The 2023 projection for net employee benefit costs, which includes salaries and wages, pension benefits, overtime and training, is seen reaching R33.3-billion. 

In response to a Numsa request for information seen by Business Maverick, Eskom said the “total employee benefit cost” for the more than 27,000 members of the bargaining unit was R17,561,914,171 for FY 2022/23. Meanwhile, the number of managers was put at 6,457 – about one manger per four non-managers. Looking at the numbers outlined in the financial presentation, that means R15.8-billion in salaries and other benefits is paid to management. 

That equates to about R64,000 per month on average for employees in the bargaining unit but it includes all benefits – not just the basic salary – including overtime which is 9% of such costs. For managers, the average monthly total is almost R245,000 per month. 

Both figures conceal wide pay disparities within the bargaining unit and management ranks and union officials complained that Eskom has not provided a detailed breakdown of management salaries. 

The next round of talks is slated for 23 to 25 May and if they deadlock, the matter is likely to go to arbitration. Eskom employees cannot legally strike because their work is considered an essential service. DM/BM