Eskom's lights remain on, but dark days may still come

South Africa has apparently avoided an embarrassing strike by Eskom workers which could have derailed the Fifa Soccer World Cup. But major disruptive strike action soon after the final whistle may be in waiting. Public sector unions representing some 1.3 million public servants have indicated they would embark on strike action in two weeks' time.

In the interim, despite the truce at Eskom, the senior executives of the state power utility continue displaying gross arrogance when it comes to managing Eskom’s finances and have perhaps helped pave the way for a public sector strike.

Eskom escaped strike action this week only by making a last-minute improved wage offer of a 9% increase plus a R1 500 monthly housing allowance, which the three unions involved – the National Union of Mineworkers, the National Union of Metalworkers of South Africa and Solidarity – accepted on Sunday.

However, a condition was attached that Eskom executives may not award themselves any further bonuses during the current financial year. This condition is particularly significant in the light of weekend reports that Eskom's executive managers had received salary increases of between 73% and 91% and that the state utility had splashed out R12 million on World Cup tickets – none of them for ordinary staff.

This news came at a time when Eskom is battling to obtain funds for its vital expansionary build programme; is slamming ordinary consumers with a 25% tariff increase to help fund it; and when it initially refused to meet financially hard-pressed workers’ pay demands, pleading it could not afford a 9% increase.

Executive increases condemned

The Congress of South African Trade Unions (Cosatu) general-secretary Zwelinzima Vavi and other labour leaders have strongly condemned the executive pay increases and ticket spending spree, particularly as they had advised their members to put South Africa’s interests first and not opt for strike action during the World Cup.

Vavi added that Cosatu would campaign for the pay gap between executives and workers to be narrowed.

Because of the political sensitivities involved in the Eskom strike – both in respect of the World Cup spectacle and strained relations within the tripartite political alliance between the African National Congress (ANC), Cosatu and the South African Communist Party – the government played an informal role behind the scenes in the negotiations that led to the 11th hour settlement on Sunday.

But the settlement may well be only a temporary reprieve and all may not be over for the government when it comes to Eskom. A threat by Cosatu to call a general strike to protest Eskom’s recent massive electricity tariff increase may still go ahead after the World Cup.

Details regarding the latest status of this potential development are still sketchy at this stage. Cosatu had earlier made a section 77 submission to the National Economic Development and Labour Council to oppose the tariff increase that was granted to Eskom in February.

Eskom deal ups the ante for civil service

Despite the call by Finance Minister Pravin Gordhan earlier this year that salary increases must be moderated – a call ignored both by labour unions and Eskom executives – the Eskom wage deal ups the ante dangerously for wage increase demands in the public sector. It could put the government, already financially strapped due to the recession and massive pre-World Cup infrastructure expenditure, in a very tight spot regarding the public sector wage negotiations that still have to be concluded.

It is exactly here that major disruption looms, given the warning by several public sector unions that they may strike in two weeks’ time. On Thursday last week, the Public Service Co-ordinating Bargaining Council issued a conciliation certificate declaring the matter as unresolved, meaning that the unions could either opt for arbitration or for a strike.

The public sector wage negotiations involve workers from 14 Cosatu affiliates, including nurses, police officers, teachers and other government officials such as immigration staff. A strike could cause major paralysis of the state sector, with a negative knock-on effect for the private sector, and could therefore impact strongly on the economy.

Waiting for teachers

The Cosatu-affiliated public sector unions are waiting for teachers belonging to five teacher unions to return to school in order to get a mandate from them, before making a final decision.

Last week, the public sector unions turned down a 6.5% wage increase offer by the state after demanding an above-inflation salary increase of 8.5% and a doubling of housing allowances to R1 000 a month.

Following the scope of the final offer accepted by the Eskom unions, given the role the government played in achieving that particular settlement; and following the news of the Eskom executive mangers’ increases and the massive World Cup ticket-buying spree by parastatals, government departments and municipalities – the public sector workers are not likely to settle for anything less than their existing demands.

As things stand now, John Malukele, chief negotiator for Cosatu, says: “We are left with no other option but to consider the most severe option to us, which is strike action”.

Can anyone really blame them? While it may well be that the unions have used the World Cup to bargain for higher wages which could, in the longer term, have negative consequences for South Africa as it recovers from recession, their demands seem almost reasonable when compared to the financial excesses committed by those in charge of the country's parastatals, state departments and municipalities, while not forgetting similar executive excesses committed in the private sector.