Solidarity vows to fight Cosatu’s Eskom pensions rescue plan
Calling it ‘pension capture’, the union is prepared to do legal battle to stop workers' pension funds being used to bail out SOEs
Trade union Solidarity has threatened litigation should the government implement a controversial proposal to use pension fund money to bail out cash-strapped power utility Eskom.
Union federation Cosatu recently proposed using R250bn of pension money managed by the Public Investment Corporation (PIC) to pay down Eskom’s debt in return for a range of undertakings by the government, including that no worker at the utility lose their job and that Eskom not be privatised.
The Cosatu proposal was reportedly supported by President Cyril Ramaphosa and public enterprises minister Pravin Gordhan, who was quoted as saying that “over the next month or two we are going to see fascinating exchanges helping to get all the resources available in the country” to save Eskom.
However, Business Day reported on Wednesday that Cosatu was putting the brakes on the issue in favour of more consultations as disquiet grows in organised labour about the implications of using pension money to pay down Eskom’s debt of more than R450bn.
It is no longer expected that Ramaphosa will announce the framework agreement in his state of the nation address (Sona) on Thursday evening, but will report on progress made in talks over the past 10 days with business and labour.
Addressing the media in Johannesburg on Wednesday, Solidarity CEO Dirk Hermann said Cosatu “putting brakes on this issue means there is a pushback against the whole idea, and we welcome that”.
The PIC is Africa’s largest fund manager and controls more than R2-trillion on behalf of the Government Employees Pension Fund (GEPF). Hermann said Solidarity had sent letters to the PIC and the GEPF demanding that the trustees and the boards of the institutions not accept the controversial plan to finance Eskom.
He said the PIC and GEPF have until end of business on Tuesday to make the undertakings, adding that the legal process is two-fold: to put the PIC and GEPF on terms, “that you won’t continue with this — or that if you make that decision we will continue with our legal action”.
About R2m has been budgeted for litigation and campaigns, Hermann said. “If Solidarity does not receive such a guarantee, or if a decision is made to implement the controversial Eskom plan, Solidarity will take further legal action, which may include urgent legal assistance.”
Solidarity, the National Union of Metalworkers of SA (Numsa), and the National Union of Mineworkers (NUM) are recognised trade unions at Eskom.
“The whole process has been irresponsible; it created anxiety among workers. We think it was a well-planned process behind the scenes [because] Cosatu announced [first], then the president, then the minister [but] they underestimated the voice of ordinary workers, which pushed back this whole proposal,” Hermann said.
He added that any step or action to use employees’ pensions to save Eskom or any other state-owned enterprise (SOE) would fall outside the mandate of the GEPF and the PIC and “it would also be a breach of the contractual agreement with the members of the fund”.
Hermann lashed out at what he called “pension capture”, lamenting that it is “not the responsibility of workers to fund bankrupt SOEs”.
“Solidarity is aware of resistance to the controversial pension plan from several other unions. We will support every action against the plan that any other union comes up with. We need to attack the plan from as many angles as possible.”
Solidarity head of labour law services Anton van der Bijl said: “If the GEPF and PIC decide to go ahead and invest in Eskom, we will have no other option but to urgently review the decision at the high court, or apply for an urgent interdict to declare the decision null and void.”
In 2019, Cosatu mobilised R1.3bn of the Unemployment Insurance Fund (UIF) managed by the PIC to assist in the rescue of retailer Edcon.