Citizens pay the price for Eskom power struggle
Wage talks have resumed, but the parties are still miles apart on fundamental issues regarding the power utility’s future — and it is ordinary South Africans who are paying the price
Struggling power utility Eskom faces a tough road, despite the resumption of wage negotiations with organised labour.
The brutal fight put up by workers against the state-owned company’s refusal to increase wages could be the start of an even longer battle by unions over the general management of Eskom.
There has been load-shedding since last Thursday as a result of the labour unrest that followed the collapse of wage talks.
The company said it could not guarantee electricity supply this week either, as some power stations would take longer to become fully operational.
The National Union of Metalworkers of SA (Numsa) and the National Union of Mineworkers (NUM) demanded 15% wage hikes for their members, while Solidarity wanted 9%.
As part of the package, the unions also want a say on the future sustainability of Eskom, including coal costs, the impact of the independent power producer (IPP) programme and staffing issues.
It was agreed during the meeting that broke the wage talks deadlock, called by public enterprises minister Pravin Gordhan, that Eskom and organised labour would engage on these issues after the negotiations process.
If sacrifices are to be made in terms of job cuts, it should be from the top executivesIrvin Jim
But the parties are miles apart on how Eskom can get itself out of financial trouble as it devises strategies to reduce its R367bn debt.
CEO Phakamani Hadebe says the utility plans to reduce capital expenditure to meet a savings target of R50bn in the next five years. Many "courageous and difficult" decisions will have to be made, he says, adding that the no increase offer should not be viewed in isolation.
The unions are having none of that, saying they aim to protect jobs, even though it is generally acknowledged that Eskom is overstaffed.
Numsa’s Irvin Jim says: "If sacrifices are to be made in terms of job cuts, it should be from the very same top executives who brought a once-glorious institution to the brink of financial ruin, and not the ordinary men and women at Eskom who have worked very hard."
Numsa and NUM see the new Eskom management and board as "agents of privatisation" and say the 0% offer, the mulled job cuts and the power purchase agreements with IPPs are all meant to prepare Eskom for that eventuality.
The company employs more than 47,000 people and needs to reduce its headcount to 36,746 by 2021/2022.
While it initially said it would get rid of posts through natural attrition, it seems that is no longer the case after the issue was brought up during wage negotiations.
Gordhan says it is "improper to raise the issue of downsizing Eskom at the same time as the current wage negotiations".
Unions are also demanding accountability for money lost through corruption, questioning why Eskom has not taken action against now axed executives found to have had a hand in its financial destruction.
Labour is likely to decrease its wage demands, but it seems unlikely that a settlement will be reached soon, with horse-trading between the parties yet to take place.
What it means
Should unions’ demands not be met, more electricity outages are on the cards
Eskom says it understands that the role of trade unions is to get the best possible settlement for their members, but "the current financial challenges ... require that the organisation be prudent with regard to costs. A 9%-15% increase is not affordable and out of line with market movement indications."
But Numsa and NUM say: "These issues go beyond workers’ wages. Their ultimate outcome will be to destroy Eskom as a public utility, and they are both an issue to our demand that Eskom must give workers their deserved increases. Second, if they are not tackled properly, the future of Eskom as a public utility remains bleak."
The two unions have promised that more dark days could follow if Eskom does not accede to their demands.
Though Eskom workers cannot embark on a lawful strike because they are deemed an essential service, and there is no minimum service-level agreement covering nonessential staff, the unions say they will test this in court if necessary, when the occasion calls for mass action. The commission for conciliation, mediation & arbitration (CCMA) has told the FM that in 1997 the essential services commission designated only the generation, transmission and distribution of power as an essential service.
"For the employees who are engaged in an essential service, if the matter is not resolved in conciliation they may elect to refer the matter for [binding] interest arbitration; and for the employees not engaged in an essential service, they may legally participate in a strike," the CCMA says.
On Tuesday Eskom reviewed its offer to 4.7%. Should the issues not be resolved to the unions’ satisfaction, Eskom could be hit by strike action, meaning South Africans are not yet out of the woods when it comes to load-shedding.