Eskom and Numsa in deadlock as wage talks collapse

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  • Eskom has confirmed that it has reached a deadlock in talks with Numsa at the Central Bargaining Forum.
  • Eskom general manager for people relations Thulane Ngele said parties could refer the matter to the CCMA.
  • Numsa said Eskom collapsed the talks because it did not want to be held accountable for spending on coal and Independent Power Producer contracts.

Eskom confirmed that it has reached a deadlock with the National Union of Metalworkers of South Africa (Numsa) during wage negotiations at the Central Bargaining Forum (CBF), bringing the process to a close.

This comes as Numsa released a fiery statement on Wednesday morning, saying that Eskom management declared a dispute at the beginning of the fourth round of wage talks after the union tabled its revised demands.

In May, Numsa demanded a 15% wage increase across the board, which Eskom management maintained it could not afford. As a breakdown of talks remained a looming possibility, Eskom CEO André de Ruyter told reporters at the time that Eskom did not expect an unprotected strike at the entity over a wage talks deadlock.

READ | Eskom doesn't expect any unlawful strikes as wage saga kicks into gear

Thulane Ngele, general manager for people relations at Eskom, spoke about the dispute during a briefing by Eskom on Wednesday afternoon.

"We have reached a deadlock. And salary negotiations are closed," said Ngele. 

Ngele said any party, be it Eskom or organised labour, had the option of declaring an official dispute with the Commission for Conciliation, Mediation, and Arbitration (CCMA). 

"If there is no agreement, the matter can be referred to arbitration," Ngele said. 

Ngele maintained that Eskom was an essential service and hence there could be no strike action at the entity.

Numsa said in its statement that De Ruyter elected to collapse central bargaining in a "low" bid to keep a veil of secrecy over the entity's Independent Power Producers (IPPs) and coal contracts.

"We successfully demonstrated to the Central Bargaining Forum last week that primary energy costs were collapsing Eskom. We were able to show that Eskom can afford to pay workers increases, but they choose not to. De Ruyter and the board are taking away workers' benefits and wages to fund dirty procurement contracts," the Numsa statement said.

READ | Unions rip into Eskom on wages and South32 coal deal

Numsa said its representatives at the CBF negotiations asked why Eskom was "taking [what is] meant for workers, and using it to pay billions to diesel suppliers, owners of coal contracts, and IPPs". According to the statement, instead of answering questions from organised labour, Eskom representatives staged a walkout.

"We have repeatedly requested that Eskom disclose in full the nature of these contracts, who are the beneficiaries, and their value, but they have refused," the statement claimed. 

Numsa maintained that workers' wages would not negatively affect Eskom's balance sheet, as wage costs remained flat between R16.9 billion and R17.4 billion, "at most increasing by 2.3%".

The statement said primary energy costs were "collapsing" Eskom as they increased from R85 billion in the 2017/18 financial year to R116 billion for the 2021/22 financial year.

"That is a R31 billion increase over the past four years. Interim results released on the 15 December 2021 have forecast a further R12 billion increase from R116 billion to R128 billion for the financial year ending 2022," the statement said.

The union said Eskom refused to deal with its cost drivers while workers were being sacrificed for this. Numsa said it would consult members on a way forward. 

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