The country is currently facing load shedding due to the disruption of Eskom operations by striking Eskom employees.
The management of the utility, which is currently at risk of losing its going concern status, earlier announced that there would be no wage increase or bonuses for employees this year.
This angered unions who are insisting on a 15% increase. The talks broke down and the matter was referred to the Commission for Conciliation, Mediation and Arbitration (CCMA).
Despite the fact that Eskom workers are classified as providing an essential service and therefore precluded from lawful strike action, workers went on a strike characterised by the intimidation of colleagues and alleged sabotage of Eskom operations, which resulted in load shedding countrywide.
Public enterprises minister Pravin Gordhan has since intervened, saying on Friday that the 0% increase is off the table, and it seems negotiations might proceed this week.
But how sound is the workers’ case?
Last week renowned economist Mike Schüssler angered unions representing Eskom workers when he tweeted that the average remuneration per employee at Eskom is R798 000 per year.
Schüssler went on to say that even if the income of executives and senior managers is excluded, Eskom workers still earn more than R600 000 per annum, on average.
In an article discussing Eskom’s unsustainable wage bill, Nedbank CEO Group Mike Brown quoted a number of R770 000 per annum.
The National Union of Mineworkers (NUM) angrily hit back at Schüssler:
About 37 000 of the 43 000 employees of Eskom as a company (not the group) belong to the bargaining unit. It is their salary increases that are now being negotiated between the unions and Eskom management.
Moneyweb has obtained a confidential document that sets out exactly what workers in the Eskom bargaining unit earn. These employees fall into 10 salary bands, with the lowest earners earning R135 390 per annum and the highest R595 410 per annum. Bargaining unit members thus earn between R11 282,50 and R49 617,50 a month.
Here is the table of salary scales implemented on July 1, 2017.
It is therefore clear that the majority of Eskom workers do not earn Schüssler’s average of R798 000 per person per year or Brown’s R770 000 per person per year. Brown in fact acknowledged that “the calculations were complicated” and that there was “some margin for error as a portion of salary costs could be capitalised.” He added that it was also not quite clear to what extent consulting fees were reported as salaries and wages.
Numsa spokesperson Phakamile Hlubi-Majola on the other hand told TimesLive that the average employee earns R135 000 per year, which is also incorrect.
Knowing the salary scales is one thing, but to be able to compare it with salaries elsewhere one also has to know what the job entails.
Moneyweb obtained this rough indication from an informed source:
In assessing the case of the Eskom workers it has to be noted that the utility’s expenditure on bonuses almost doubled to R4.2 billion last year.
In fact, on July 11 last year almost all Eskom staff got performance bonuses at an average of R88 883.35 per employee. While averages once again do not show whether the members of the bargaining unit got their ‘fair share’, the unions were quiet at the time.
The bonuses came at a time when Eskom on an alone-standing basis showed a loss of R870 million for the year ended March 31, 2017 and a few months before the cash ran out.
If Eskom was run like a business, would it have considered salary increases amid doubts that it could continue as a going concern?
Would its shareholder have ‘intervened’ to reopen negotiations with unions and take the 0% off the table?
No, but Eskom is a state-owned company. Funded by consumers and taxpayers. With a politician representing the shareholder. Approaching an election.