'After years denying it can afford increase, so much drama then Eskom gives 7%!'
Bruce Whitfield interviews analyst Dr Iraj Abedian, CEO of Pan-African Investment & Research Services.
Eskom and unions finally signed a wage agreement on Tuesday afternoon, breaking a deadlock in negotiations.
The power utility blamed an illegal strike for having to escalate load shedding to Stage 6, almost bringing the country to its knees.
The unions have accepted Eskom's offer of a 7% wage hike across the board, and a R400 increase in the housing allowance - these are the National Union of Metalworkers of South Africa (Numsa), the National Union of Mineworkers (NUM) and Solidarity.
#Eskom is pleased to confirm that the wage agreement has been signed at the CBF between Eskom and the 3 recognised labour unions - NUM, NUMSA, Solidarity. The agreement entails an increase of 7% for Bargaining Forum employees, and an increase of R400 pm on the housing allowance pic.twitter.com/v9iJj8Lak4— Eskom Hld SOC Ltd (@Eskom_SA) July 5, 2022
Loadshedding inside CedarWoods conference centre. NUM and NUMSA shopstewards totally not bothered by the power interruption! pic.twitter.com/L0qtu4NuEF— NUM (@NUM_Media) July 5, 2022
The Money Show gets comment from analyst Dr Iraj Abedian, CEO of Pan-African Investment & Research Services.
Bruce Whitfield points out that the wage hike is above inflation, currently officially at 6.5%.
Dr Abedian says this is problematic on a number of levels and expresses disappointment with Eskom's competence in managing industrial relations.
"And I have no doubt that behind it there is political fiddling going on" he says.
If Eskom was going to give any wage increases after so long denying it can afford them... and all the drama that has come with it, then why do you want to exact more risk and pain on the economy and the society and then pay 7%!Dr Iraj Abedian, CEO - Pan-African Investment & Research Services
You are in a better negotiating position to then secure quid pro quos on productivity and a whole lot of other areas. Now they've got the worst of both worlds - they have to pay and they've suffered even more themselves as an organisation.... and they've really put a lot of suffering on the South African brand... and then the social frustrations that come with it...Dr Iraj Abedian, CEO - Pan-African Investment & Research Services
Dr Abedian also warns that the 7% increase sets a new baseline for wage negotiations not only for SOEs, but in all sectors of the economy.
And that while Eskom is known to have an excess workforce of 35-40% at both managerial and "blue-collar" level, he adds.
At the same time he acknowledges that in view of the cost of living rising by around 7%, the workers do have a legitimate case to make.
Listen to the discussion on The Money Show: