Eskom wage negotiations

Statement by the Minister of Public Enterprises: Eskom wage negotiations

24 June 2010

Dispute

A dispute was referred on 3 June 2010 to the Commission for Conciliation, Mediation and Arbitration (CCMA) by Solidarity, National Union of Mineworkers' (Num) and National Union of Metal Workers of South Africa (NUMSA). The dispute arose between the unions and Eskom whilst bargaining over wages and working conditions.

The CCMA convened meetings of the parties and attempted to mediate the dispute. The CCMA attempted to mediate the dispute on 11, 14, 15, 17 and 21 June but failed to resolve the dispute. The unions demanded as a settlement the sum of R4 000 per month on housing allowance and nine percent increase on wages. The costs of the demand on housing equates to approximately R1.8 billion. This sum is plainly unaffordable. Eskom has offered to the employees eight percent increase on wages and R500 to R750 per month on housing, a sum that is affordable and which they consider to be fair and reasonable.

Resolution of dispute

The CCMA has directed the parties to refer the dispute to the next stage that is prescribed by law. A party may refer the dispute to interest arbitration. Even though a certificate has been issued, the unions and management are continuing the settlement talks. I am advised that there is a good opportunity for this dispute to be settled soon.

I call on all the parties to abide by the law and follow the next step prescribed in the law. I have requested the CCMA to appoint an arbitrator urgently and for the arbitration to be held as soon as is possible.

From time to time, disputes do develop in State Owned Enterprises over wages and conditions of work. This is not unusual.

We have in South Africa a well developed system of dispute resolution for labour disputes and the CCMA will manage the dispute with the parties concerned. The CCMA has directed the parties to refer the dispute to arbitration.

I call on the parties to follow the directive of the CCMA. It is important to note that Eskom is an essential service. As an essential service, the employees of Eskom may not go on a strike. The alternate remedy is recourse to interest arbitration.

Eskom

Part of our responsibility as government is to ensure security of electricity supply, and to see to it that Eskom’s build programme is allowed to continue to ensure we achieve this objective.

Due to the lower than expected tariff increase, there is a cumulative shortfall of approximately R190 billion on Eskom’s funding plan for the next seven years. The challenge of closing the funding gap for the build programme therefore remains a priority in order to maintain the current credit ratings and to ensure security of supply.

Despite the raising of R60 billion in debt in the financial year, Eskom finds itself in a lower cash position (net decrease in cash equivalents of R 2.9 billion) than in the previous financial year. In light of this, Eskom cannot afford any additional pressure on the operational costs as these cannot be adequately recovered given the current financial and regulatory constraints.

Unions

I have been in constant contact with all the parties, especially the leadership of the unions. The unions have advised me that the workers complain that the housing policy at Eskom is inadequate.

This is a problem that requires serious and urgent attention. I have consulted with experts and will appoint shortly a panel of experts to study the housing policy and to work with the unions to attend to the matter urgently. I will ensure that that a housing policy is reviewed and if it is inadequate, to make it better.

In this I have received the support of the unions and the management and we will all work together with the experts.

Come together

I expect that challenges will arise in state owned enterprises from time to time. The challenge they present is to fix them, not fight about them.

As a nation the time has come for us to all work together to make Eskom a success. We come together also as a nation to host the World Cup. Now is not the time to sow division and discontent in the nation. Now is not the time for there to be disputes and for the dispute to be fought out on the streets.

The minister is encouraged by the fact that the management of Eskom and the unions are engaging with each other constructively.

Both sides have shown a willingness to resolve the matter, and to put the national interest, first and to be responsible as a host.

We would like to urge both parties to continue engaging on the issues raised, in order to reach a speedy resolution.

Issued by: Department of Public Enterprises
24 June 2010
Source: Department of Public Enterprises (http://www.dpe.gov.za/)