Eskom to offer voluntary retrenchment packages to some staff

Cash-strapped Eskom will start offering a voluntary retrenchment package to managers in non-core operations, as well as employees over the age of 60 across the group.

In a communique sent to all group executives on February 6, Eskom said that the window for applications will open in the third week of February 2020, with employee exits planned for the end of April 2020.

Last month Eskom's new CEO, Andre de Ruyter, told Fin24 there would be no forced retrenchments at the beleaguered power utility. "The president [Cyril Ramaphosa] has been very clear that there will be no forced retrenchments at Eskom, and that mandate is very clear and we will obviously respect that," he told Fin24 in late January. 

The letter stated that, as part of its turnaround plan, Eskom's board had approved the implementation of “voluntary cash separation packages” for non-core employees over two years. It states that while Eskom’s board granted the approval of the voluntary separation packages late in 2019, its executive committee secured the R400m that will be used to implement the voluntary layoffs on January 29 this year.

“The Eskom Board supported the proposed voluntary separation package benefits implementation process and plan with costs capped at R400m. This window of VSP’s will open for managerial level employees in non-core positions," states the communique. "Further to this, managerial employees from 60 to 62 years old will also be eligible to apply irrespective of being in core, critical or no-core positions."

The letter states that the process is voluntary and no employee will be coerced or requested to apply. It added that approval for separations will be at Eskom‘s discretion, and each division will be allocated a cap for separations based on its proportion of eligible employees.

“In summary, the approved separation benefits will be based on 2 weeks remuneration per completed year of service and a gratuity payment of R75 000. The window for applications will open in the 3rd week of February 2020, with employee exits planned for end of April 2020 except for those taking early retirement,” read the letter.

The power utility came close to not paying employee salaries in April 2019, after previously announcing it could no longer afford salary increases. But cash injections from government over the past year allowed it to continue paying salaries in full, as well as 13th cheques in December. It also allowed Eskom to avoid job cuts, even though it emerged that the power utility had bloated staff count.

Eskom was not able to comment on the matter on Thursday morning. But the biggest labour union at the power utility, the National Union of Mineworkers, said it had not been consulted about the voluntary retrenchments and would not support them. 

“We do not support any retrenchments at Eskom. We made it clear from the beginning that we do not want any single worker to be retrenched, voluntarily or not. We know that the strategy is to retrench the management and then they will be coming to our members next. It’s a strategy," said NUM spokesperson, Livhuwani Mammburu.

ZAR/USD
17.11
(-1.28)
ZAR/GBP
21.77
(-0.84)
ZAR/EUR
19.90
(-0.79)
ZAR/AUD
12.02
(-0.75)
ZAR/JPY
0.16
(-1.01)
Gold
1864.70
(-0.11)
Silver
23.04
(-0.60)
Platinum
853.00
(+0.76)
Brent Crude
42.26
(+0.47)
Palladium
2220.00
(+0.09)
All Share
53587.11
(-1.22)
Top 40
49547.74
(-1.16)
Financial 15
9401.28
(-1.95)
Industrial 25
72949.70
(-1.72)
Resource 10
53453.42
(-0.10)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 1365 votes
It depends on how the funds are used.
73% - 8840 votes
No. We should have gotten the loan elsewhere.
16% - 1954 votes
Vote