ESKOM CHAOS OVERSHADOWS WAGE TALKS
As labour and the utility try to find middle ground in their pay discussions, unions say they have been struck by the lack of professionalism on the part of the company which is indicative, they say, of its general state
One would expect that in the midst of a debilitating electricity crisis, not to mention severe cash flow woes, Eskom would be on top of its game in negotiating salary increases with organised labour.
You’d think it would be seen as crucial to handle talks with the National Union of Mineworkers (NUM), the National Union of Metalworkers of South Africa (Numsa) and Solidarity — arguably three of the most highly organised unions in the country — with professionalism and dexterity.
It’s not as though the utility doesn’t know how devastating it can be when things go south. After all, a wildcat strike during last year’s wage talks pushed South Africa further into crisis.
And, as it is, the utility already warned just last week that its ailing fleet and the expected high demand could plunge South Africa into stage 8 load-shedding this winter, with up to 16 hours a day without power.
But agility and professionalism in negotiations would seem to be noticeably absent at present. If the current wage talks are any indication of how the 40,000-worker utility is run, it’s no wonder it can’t keep the lights on, the unions say.
Eskom and the three unions resumed their third and final round of wage negotiations this week. While such talks usually involve some give and take by both unions and employers, the past two rounds have been particularly frustrating for the unions, which together represent about 27,000 skilled and semi-skilled workers at Eskom.
Things were tense from the very first round of negotiations. The NUM — the largest union at Eskom — demanded a 15% increase, which it subsequently lowered to 12%. Eskom, for its part, offered 3.75%.
In this final round, an agreement still seems far off.
The good news, Eskom representatives apparently told unions in a closed meeting this week, was that “we have upped our offer ... and the revised offer is now 4.5%”.
The FM understands that union negotiators snickered at the new offer, but agreed to caucus on it. Shortly afterwards, the NUM apparently rejected the offer — but reduced its own demand to 11%.
Solidarity general secretary Gideon du Plessis tells the FM that if Eskom were to place an increase linked to the consumer price index (which is at present 7.1%) on the table, his union’s leadership would take the offer to its members for consideration.
Numsa, for its part, has stuck to its opening demand of a 15% increase.
Where the unions do agree is that any deal struck should hold for two years. That would give Eskom time to stabilise and focus on keeping the lights on, NUM chief negotiator Olehile Kgware tells the FM.
But what has really stood out at the talks, as far as labour is concerned at least, is the quality of Eskom’s negotiators.
“I must be honest, they are simply disorganised and unprofessional, for lack of a better way to put it,” Kgware tells the FM.
Says Du Plessis: “I am involved in negotiations for our members at a large mine while also negotiating with Eskom and I must tell you, it is like chalk and cheese. The mine is well organised and well prepared, but Eskom is highly frustrating. It is as if they don’t understand wage negotiations, which they have been doing every year; they are ill-prepared and all over the place.”
Numsa general secretary Irvin Jim says much the same. “It is a mess, the bad management of Eskom is on full display,” he tells the FM.
Given that the utility is now in its third month without a CEO after the departure of André de Ruyter in February, it’s unsurprising that labour entered the talks this week with low expectations. It’s equally unsurprising given the messiness of the first two rounds of talks, says Du Plessis.
He refers, for example, to Eskom’s “shoddy feedback” to the unions’ presentations. And, he adds, instead of responding in writing, as is the practice in the bargaining chamber, its representatives offered verbal notes.
When this was pointed out, Eskom apparently asked for an adjournment and took six hours to write up its notes,
only to return to the chamber with a document littered with mistakes.
The same can be said for its written revised offer, presented to unions on Tuesday, which the FM has seen.
Kgware doesn’t present Eskom’s representatives in any better light. In his telling, when the earlier rounds of talks opened, they curiously declared they didn’t have a mandate to negotiate.
“How do you come to negotiations when you do not have the power to negotiate and then take an entire day to get a mandate?” he asks, adding that the utility would have known about the talks for months.
“It really shows why Eskom has these big problems; there is poor leadership, bad management and an inability to realise that Eskom needs urgent solutions.”
According to the unions, Eskom argued in the opening meetings that the utility couldn’t afford large increases for workers. Numsa, however, pointed out that primary energy accounts for 70% of Eskom’s operational costs, while wages take up just 8%.
“We think that Eskom can comfortably afford our demands,” Numsa spokesperson Phakamile Hlubi-Majola tells the FM. “The reason we say this is that in the [most recent] round of wage talks Eskom presented its financials and what was clear [was that] ... [it is] not going to intervene [regarding] the cost drivers at Eskom.” The biggest cost drivers, she says, aren’t wages, but independent power producers, coal and diesel. And Eskom “isn’t making any effort” to address these, she claims.
According to Du Plessis, the National Energy Regulator of South Africa built a 6% wage increase into Eskom’s most recent tariff hike. So the company cannot justify an offer below that.
Eskom, for its part, says it is “incorrect” to suggest that it was unprepared and negotiating in bad faith.
“We view these statements as a negotiation tactic that is used from time to time,” the utility says in a written response to questions. It does, however, remain optimistic that an amicable solution will be found.
Labour, too, wants a speedy resolution to the talks.
“We certainly don’t want what happened last year, when workers out of frustration protested at the power stations, which exacerbated load-shedding,” says Hlubi-Majola. “We don’t want that. So we really want Eskom to start taking these talks seriously and to put a meaningful proposal on the table to wrap this process up as quickly as it can.”
Du Plessis similarly says labour is united in wanting to ensure that there are no disruptions and that workers can continue doing their part in ensuring the lights stay on.
Eskom is highly frustrating. It is as if they don’t understand wage negotiations, which they have been doing every year; they are ill-prepared and all over the place
Gideon du Plessis
“You know all three unions also represent workers across other sectors, in mining and elsewhere, and disruptions at Eskom will affect all other workers,” he says. “We won’t tolerate any form of industrial action — it is not in the interests of the country, of workers or of Eskom itself.”
In any event, Eskom is deemed an essential service site, which means strike action is prohibited.
There are other gripes, too. Kgware, for example, says workers at Eskom are unfairly targeted over corruption and maladministration allegations at the utility. The now infamous tales of Eskom paying R26 per roll of toilet paper and R200,000 for a single mop have diminished public sympathy for workers, he says.
“The executives and the board of Eskom are actually the ones who are responsible for the fraud and maladministration at Eskom. It cannot be that the poor who are union members and ordinary workers must pay the price for the corruption by the elites at Eskom,” he says.
And, he adds, there is no consequence management either. The NUM met public enterprises minister Pravin Gordhan in January about corruption at the utility, but has yet to receive detailed feedback.
New electricity minister Kgosientsho Ramokgopa has met the other unions but not the largest union.
Should the three-day talks fail to yield a positive outcome, a dispute will be declared and the matter will go to conciliation and arbitration. In the meantime, the process of the talks has provided further evidence of the management chaos at Eskom, which in turn is wreaking havoc on the economy and the livelihoods of ordinary South Africans.
Of course, you could read more into the issue.
In Truth to Power, De Ruyter’s recent book on Eskom, the former CEO writes how he discovered shortly after settling into his office that the national flag at Megawatt Park was flying upside-down.
“The whole episode was emblematic of everything that was wrong at Eskom,” he writes. “No attention to detail, no pride in one’s work and then, when accountability finally comes knocking, an attempt to deflect responsibility by throwing one’s manager under the bus.”
De Ruyter later discovered that an upside-down flag is a universal symbol of extreme distress, he writes. That’s apt, given the state of the utility.