Eskom Wage Negotiations in South Africa

Eskom Wage Negotiations

At Eskom, there is an ongoing negotiation about the worker’s wages, so what is the conclusion for this negotiation, and are the outcomes satisfactory for the workers? Eskom is a state-owned organization, responsible for providing electricity in South Africa.

They are responsible for the majority of the nation’s electric power. Holding the position as the largest electricity supplier in Africa, Eskom plays a significant role by producing nearly half of the continent’s total electricity consumption.

Recently, Eskom wage negotiations were held to reach a mutually agreeable settlement that outlines the terms and conditions of employment, including working hours, wages, and other benefits. Moreover, after the turbulent and unregulated strike that caused Stage 6 load shedding last year, this year’s Eskom wage talks successfully ended with an agreement in its bargaining forum.

What Was The Result of Eskom Wage Negotiations?

Eskom has successfully negotiated an agreement with the National Union of Mineworkers (NUM), the National Union of Metalworkers of SA (NUMSA), and solidarity. As part of this agreement, Eskom is dedicated to raising the salaries of its non-managerial employees by 7% each year. Moreover, this salary increase will be applicable for the next three years, extending until June 30, 2026.

Percentage Increase in Wages: 7%

Duration: Three years (due date: June 30, 2026)

Therefore, starting from July 1, 2023, until June 30, 2026, Eskom employees will benefit from the wage hike. Additionally, over the same three-year duration, the parties involved have agreed upon a 7% increase in housing allowance. This implies that employees will receive a higher allowance to cover housing-related expenses.

Furthermore, for the first two years of the deal, there will be a one-time taxable payment of R10,000. This hefty sum is an additional financial benefit provided to employees subject to taxation. By securing this agreement, the need for wage negotiations in the upcoming years will be averted.

The main aim is to uphold organizational stability, allowing both Eskom and its workers to concentrate on addressing the challenges associated with load shedding. After several months of ongoing negotiation between the power utility and key unions, this significant breakthrough was achieved.

Eskom Acting CEO Statement on Wage Negotiation

Expressing the positive result, Eskom’s acting CEO, Calib Cassim, emphasizes the significance of the collective agreement in bringing stability to the company. According to the acting CEO Calib Cassim, ‘The collective agreement will play a huge role in stabilizing our organization, by providing Eskom with the necessary time and space for collaborative efforts to urgently address our most pressing concerns’. Moreover, Calib Cassim highlighted the historical importance, noting that this marks the first time in over a decade that the involved parties have successfully reached an argument through direct negotiations and talk.

Unions Demand

Initially, the unions put forth a demand for a 15% wage increase, pointing to the current high cost of living and inflation rates. They argued that since the National Energy Regulator of South Africa (NERSA) has recently increased electricity tariffs by 18.65%, Eskom could afford to meet their demand for a wage increase.

Subsequently, the unions readjusted their demands, revising it down to 12%. However, despite this adjustment, Eskom chose to persist in negotiations rather than immediately accepting these revised demands.

Although unions conceded by reducing their initial demand, further negotiations were deemed necessary by Eskom before concluding the wage increase. Additionally, on 9th April, the unions presented additional demands during the wage negotiations. These negotiations are as follows:

• The request to raise the housing allowance to R7,000 and allow workers the flexibility to purchase homes anywhere in the country.
• Proposing a shift in medical aid coverage to 80% with a 20% contribution from employees’s side.
• Requesting a cellphone allowance of R1,000 for employees.
• Seeking an electricity allowance of R1,500 to assist with utility costs.
• Another demand includes proposing a one-time R1,500 allowance for essential employees or those facing danger, along with a separate voltage work allowance.
• Requesting a performance bonus fixed at 25% of annual salary.
• Seeking a study benefit of R20,000 per child.
• Lastly, requesting a car allowance of R10,000 through Eskom’s vehicle X-scheme.

South Africa struggles with its most severe load shedding, causing ongoing blackouts for households and businesses. Fortunately, at present, the feared stage 8 of load shedding during the anticipated severe winter has not yet been reached.

The stability of the country has been relatively maintained with load shedding not surpassing stage 4. Eskom has previously warned about potential grid strain and expected difficulties during the winter season.

Ending Lines

In conclusion, the Eskom wage negotiations finally reached a positive outcome. After a successful negotiation, Eskom commits to an annual increase of 7% in salaries for its non-managerial employees.