South Africa’s Eskom ups wage rise offer in current union discussions
South African state-owned power utility Eskom has increased its salary increase offer to trade unions to 5.5%, up from the 3.5% proposed last year, according to a document reviewed by Reuters. However, this offer still falls significantly short of the unions’ demands.
Eskom has consistently hindered Africa’s largest economy due to its ongoing electricity shortages and financial difficulties. However, a significant enhancement in the efficiency of its coal-fired power stations has enabled it to cease the enforcement of nationwide blackouts. Last financial year, it achieved its first full-year profit in eight years.
This week, a revised wage offer was delivered to the three major unions involved in salary negotiations during the second round of pay discussions.
Eskom suggested that the 5.5% pay increase take effect on July 1, the day following the expiration of its current three-year wage agreement, as indicated in the document.
The proposal encompasses modifications to additional benefits, including housing.
An Eskom spokesperson has confirmed that the utility’s most recent salary offer stands at 5.5%.
Unions are pursuing salary increases of up to 15%, significantly exceeding South Africa’s annual inflation rate, which was recorded at 3.6% in December and is believed by the central bank to have reached its peak.
Khangela Baloyi, the energy sector coordinator for the National Union of Mineworkers, announced that a third round of wage negotiations is set to occur in February.
Eskom’s three-year agreement established in 2023 resulted in a 7% annual salary increase for non-managerial employees.
The previous state monopoly continues to produce the majority of South Africa’s electricity and aims to negotiate another multi-year wage agreement.
In past wage disputes, unions have initiated strikes, leading to power blackouts.
This time, assessing the potential impact of a strike on Eskom’s operations is more challenging, as the recent enhancements in its generation fleet have resulted in excess capacity.
