The light at the end of Eskom’s tunnel seems to be a little brighter following the agreement on wage talks between itself and labour unions, but that doesn’t mean that South Africa should expect this series of power cuts to simply disappear – at least not anytime soon.
Eskom and labour unions have finally reached an agreement – a dispute that saw numerous workers go on strike. Eskom had previously blamed the striking employees for the severity of Stage 6 across the nation, the worst power cuts in two years. However, as of yesterday, the 7% salary increase is believed to be the spark the power utility company needed to get operations running smoothly again in due time.
“Eskom is pleased to announce that it has this afternoon reached an agreement on the 2022 wage talks with the three recognized labour unions. This brings the Central Bargaining Forum (CBF) talks and the damaging, disruptive and costly wage dispute to an end, paving the way for a full return to work of all employees” noted Eskom in an official statement.
The 7% salary increase across the board has been agreed upon for all employees covered in the CBF, and will continue until 30 June 2023.
Additionally, the housing allowance will increase to R400 per month as accepted by the National Union of Metalworkers of South Africa (Numsa), the National Union of Mineworkers (NUM) and Solidarity.
However, Eskom has nodded that the price comes with the challenge of affordability.
“The overall effect of this agreement on the wage bill will be more than R1 billion over the period of the agreement. This of course will be a struggle for Eskom to afford,” it nodded.
Eskom also took to add that despite the return of workers, it will take time for maintenance to get underway, meaning that South Africans, unfortunately, can’t expect this bout of power cuts to simply stop.
Some have challenged Eskom’s decision, expressing that the workers on strike were far from Eskom’s only challenges and have set the precedent for wage negotiations in other sectors.
Irvin Jim from Numsa noted that the union believes Eskom “must take full responsibility. We understand what the public has been subjected to. There has been load shedding before we got to these negotiations,” as EWN reports.
Razia Khan, chief Africa and Middle East economist at Standard Chartered added that despite the wage deal being a positive note, the “big picture, questions of affordability persist. This doesn’t really make Eskom’s more significant challenges go away,” as per Al Jazeera.
Others like Dr Iraj Abedian, CEO of Pan-African Investment & Research Services have commented that the cost of living has risen by around 7%, putting the workers in a strong position to have made their case as EWN records. However, Abedian also noted that this has set a new baseline for wage negotiations that will impact all sectors of the economy.
Eskom’s severe power cuts have heavily impacted the South African economy amidst other challenges like fuel increases. The result? The rand has plunged to its weakest level since 2020.
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