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4 minute read
17 Aug 2018
7:37 am

How do the Eskom unions sleep at night?

Moneyweb

Wage negotiations don’t bode well for turnaround.

Eskom wins R1.3 billion summary judgment against Emfuleni Local Municipality. Picture: ANA

Despite Eskom hovering on the brink, the three unions representing more than 33 000 Eskom staff members have succeeded in negotiating a dream wage deal.

But how do they sleep at night after grabbing salary increases way above inflation for the next three years and a R10 000-after-tax pasella (‘gift’ in Zulu, and ‘settlement bonus’ in this case) per worker to seal the deal?

Apparently, they sleep very soundly, dreaming about the next engagement with Eskom management aimed at securing annual bonuses of at least 12% of their annual remuneration.

After all, they don’t have to lose sleep over the unprotected strike and unlawful sabotage of Eskom operations and assets they embarked on. Yes, it did result in load shedding that the very fragile local economy couldn’t afford and yes, Eskom did incur millions of rands of extra cost in an effort to keep the lights on, but hey, the unions will see to it that no member of the bargaining unit will be disciplined.

In fact, the National Union of Mineworkers (NUM) and the National Metalworkers Union of SA (Numsa) made the signing of the deal dependent on assurance from Eskom that their members would not be disciplined.

At more than R330 million for the R10 000 pasella every worker will get, and with a 7.5% salary increase in the first year, the cash-strapped Eskom will have to cough up more than R1 billion in additional staff costs this year.

The unions argue that Eskom is in its current precarious state not because of anything their members did wrong, but as a result of the shenanigans of the Molefes, Singhs and Kokos (Brian, Anoj and Matshela; former CEO, CFO and chief generation officer respectively).

This argument does not hold, says economist Mike Schüssler. Much has been said about Eskom’s inflated staff numbers and low productivity. Those very members of the bargaining unit have benefited handsomely and gave very little in return.

Schüssler says Eskom staff do not appreciate how well they are remunerated in comparison with most of their countryfolk, including many professionals. He says they hold the country ransom by sabotaging the Eskom power system if they don’t get their way.

“With this attitude, Eskom will not recover and will continue to weigh on the whole economy,” says Schüssler.

Tactical errors by management

The unions argue that Eskom’s new leaders provoked their members when they initially offered no increase and later maintained that no bonuses would be paid either.

Dennis George, general secretary of trade union federation Fedusa, agrees that things went wrong right at the start. He says it was a tactical error to offer no increase. When public enterprises minister Pravin Gordhan intervened to get the parties back to the negotiating table, the unions smelt blood and went in for the kill, he says.

George’s constituency is not involved in the negotiations, but he knows the collective bargaining environment very well.

Management’s next mistake was to link the negotiations to the disciplinary process, he says. “Rules have to be adhered to. A company does not need the approval of the unions to apply its disciplinary code.” Eskom management looks like a scared Chihuahua, he says.

He questions the experience and skill of Eskom’s new management in collective bargaining and says there is also a lack of political will to take a strong stand.

George says unless the relationship between Eskom management and the unions improves to a level where workers truly support management, the turnaround of the embattled group won’t succeed.

Chris Jacobs, employee relations specialist at OIM International, says Eskom cannot afford to waive disciplinary steps against these union members. “It will make a mockery of the whole disciplinary code. How do you act against individuals in future if you ignore these transgressions?” he asks. He points out that, according to Eskom, the union members didn’t just withdraw their services – some actively sabotaged Eskom and, by extension, the economy.

Jacobs says the settlement bonus is something relatively new in local collective bargaining and warns that something like this, which has nothing to do with negotiations about fair remuneration, can quickly become the norm.

He also warns that this generous wage agreement would increase the unit cost of Eskom’s production. Since Eskom does not have control over its tariffs, it cannot merely recover the increased costs from consumers, and retrenchments could follow.

“The workers are making themselves redundant,” he says.

Jacobs adds that there is clearly no alignment between management and staff at Eskom about the state of the utility, the reasons behind it, and what is needed for the enterprise to recover.

He says workers have to understand that their wellbeing is dependent on the wellbeing of the company.

It would take a fundamental and extensive intervention to develop an understanding of these issues among Eskom staff and change their attitude.

Without that, he says, the Eskom turnaround is doomed to fail.

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