Sparks fly as labour takes on Eskom

Dual: Public Enterprises Minister Pravin Gordhan (left) appointed Eskom chairperson Jabu Mabuza (centre) as interim chief executive, but two unions have objected to this. (Delwyn Verasamy/M&G)

Dual: Public Enterprises Minister Pravin Gordhan (left) appointed Eskom chairperson Jabu Mabuza (centre) as interim chief executive, but two unions have objected to this. (Delwyn Verasamy/M&G)

Labour is headed for a showdown with embattled state-owned power utility Eskom, which last week announced a loss of R21-billion in 2018-2019 — the largest-ever corporate loss in South Africa.

The National Union of Mineworkers (NUM), the National Union of Metalworkers of South Africa (Numsa) and Solidarity represent about 85% of the Eskom workforce, which stood at 46 665 at this tax year’s end, down from 48 628 in March last year. The three unions are opposed to Eskom bringing on board independent power producers (IPPs), who would supply renewable energy to the grid. Their latest gripe is the appointment last month of Jabu Mabuza as the acting chief executive of Eskom, alongside his role as group chairman.

The labour space at Eskom is complex, with NUM and Numsa in a historic tussle over turf at the power utility.
The NUM, representing some 14 000 workers, is the largest union at Eskom. Solidarity’s 7 000-odd members are mostly at management level.

This week Cosatu, the labour federation to which the NUM belongs, lashed out at senior managers represented by Solidarity for their demand of a 4.7% salary hike, because it said this could swell Eskom’s already bloated wage bill and add to the power utility’s financial woes.

A further complication for Eskom and the government is NUM’s political alignment. It was among the first Cosatu-affiliated unions to throw its support behind Cyril Ramaphosa at the ANC’s Nasrec elective conference in 2017. Ramaphosa is under fire from the public protector and those in the ANC who are loyal to former president Jacob Zuma and is facing a strident fightback against his attempts to clean up the state and state-owned companies. Potential job cuts in the public sector and NUM’s stance toward the IPP programme could alienate the president from his core constituency, the unions.

The NUM said in an interview with the Mail & Guardian this week that it will seek support from Cosatu at a leadership meeting at the end of August to place their three major concerns before the National Economic Development and Labour Council (Nedlac). It wants the IPP contracts signed by former energy minister Jeff Radebe to be scrapped; an audit of contracts signed under Mabuza at Eskom to see whether procurement processes were followed; and to stop the use of international consultants.

NUM president Joseph Montisetse said addressing these issues would go a long way to assist Eskom out of its financial morass.

He also emphasised that NUM would not agree to any retrenchments of workers unless the government and Eskom management addressed the deep problems the union had identified in the running of Eskom.

In response to questions from the M&G, Eskom avoided any talk of retrenchments. It said its focus in reducing employee costs would be headcount reduction through “natural attrition, overtime management and enhanced productivity levels”.

Eskom placed a moratorium on external appointments in May last year, with the exception of core, critical and scarce skills in essential areas. Its group headcount has declined by nearly 2 000 in the past year because it did not replace employees who had resigned.

Montisetse said the NUM was aware that if Eskom failed, it would collapse the economy and have a far-reaching negative effect on the country, but said he believed that the current management was attempting to “collapse Eskom” to build a case for privatisation.

Although Public Enterprises Minister Pravin Gordhan emphasised that Mabuza’s appointment as chief executive was a temporary measure set to last about three months, the NUM says he should not be in the post because he is “conflicted” and ineffective.

“We support Pravin Gordhan,” he said. “Ramaphosa must not remove Gordhan but he must reverse this thing [Mabuza’s appointment].”

But Numsa general secretary Irvin Jim this week repeated his union’s call for Gordhan to be fired, saying he was at the “centre of the crisis at Eskom”. The union also repeated its call for Mabuza’s removal and for Eskom’s board to be dissolved.

Cosatu spokesperson Sizwe Pamla said the federation would be open to taking the discussions on Eskom forward at Nedlac because the issues being raised by the NUM were no longer workplace issues, but related to government policy.

“Eskom can no longer be rescued by any board or minister but it will have to be a process that involves everyone and the best place for such discussions is Nedlac,” he said in an interview with the M&G.

Eskom said in response to the M&G’s question that the demand arose in the aftermath of the wage negotiations last year, in which the government intervened to avert a strike.

“You’ll remember when we started with negotiations with our bargaining unit’s employees we had said we can’t afford any increases at all given our financial challenges. Some bargaining unit employees went on industrial action, which saw us having to implement load-shedding.

“In August 2018, after approximately four months of wage negotiations at the Central Bargaining Forum, a three-year wage agreement for bargaining unit employees was concluded with trade unions (7.5%, 7%, 7%). Middle management employees received a 4.7% increase while senior managers received no increase.”

Solidarity sector co-ordinator Tommy Wedderspoon said his union represented some 230 employees from the “e-band” senior management level who did not receive increases and believed this was unfair. This group earned between R1.5-million and R3-million a year. Wedderspoon said a 4.7% increase would not have a large impact on the wage bill.

This band of employees is not represented in the bargaining council and the matter is now going to arbitration.

But Pamla hit out at these senior managers, saying their 4.7% demand represented a “toxic culture of entitlement” prevalent in state-owned entities. He said it was at this level that state capture and corruption was allowed to unfold. “This is nothing but naked greed and selfishness by these millionaires.”

Pamla said Cosatu would also now call on government to integrate state-owned entities into the Public Service Bargaining Council to prevent managers from “becoming a law unto themselves”.

Natasha Marrian

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