Fuel employees reject new pay offer

South Africa’s main fuel sector union and employees at state power utility Eskom said on Thursday they had rejected the latest raise offers from their employers, increasing pressure in strikes threatening Africa’s largest economy.

Fuel sector employers offered workers an 8% to 10% increase in wages, but the Chemical, Energy, Paper, Printing, Wood and Allied Workers’ Union (CEPPWAWU) wants a 13% increment—well above the country’s 5% inflation rate.

“Our mandate is clear, that we will strike until such time we have reached an agreement with our employers, which our members must agree with,” said John Appolis, CEPPWAWU’s national policy coordinator.

He said talks were planned with employers in the fuel and paper sectors on Friday and with the pharmaceutical industry on Monday.

Fuel industry employers include BP, Royal Dutch Shell, petrochemicals group Sasol, Engen, Chevron and Total.

In a separate dispute, the National Union of Mineworkers (NUM) said it had rejected a 5.5% pay rise offer from Eskom. The union wants a 16% pay rise.

Eskom, struggling to pay for new power plants after an electricity crunch in 2008 that forced miners and smelters to shut, gave workers a 9% raise last year and R1500 a month for housing to head off a strike when South Africa was hosting the Soccer World Cup.

Workers in the electric sector already make on average R25773 a month in wages and benefits, according to government statistics, about double the wage of the average non-farm worker.

Less competitive labour market
Since 2008, miners, factory workers, and steel workers have won raises averaging more than 10% a year, driving up the costs for employers and making South Africa’s labour market less competitive compared with more efficient and less costly work forces in other emerging markets.

South Africa’s unemployment rate has stayed at about 25% for years due to high labour costs and a rigid labour market that make it costly to hire and fire workers.

The African National Congress party, in a governing alliance with the Congress of South African Trade Unions and the South African Communist Party, is loathe to put pressure on workers, fearing it could antagonise its allies who have supplied it with millions of votes.

In other disputes, workers at diamond giant De Beers in South Africa have said they would go on strike this week and negotiations in the coal mining sector have reached a deadlock.

Strikes are also looming in South Africa’s major gold and platinum sectors which could threaten global supplies at a time when commodity prices are surging. - Reuters

Strike fever has once again hit South Africa with fuel employees, metal and chemical workers among others promising to cripple the country’s economy if their demands are not met.
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