South African Labor Union Slams Eskom Over 1.5% Pay Increase

(Bloomberg) -- The biggest labor group at South Africa’s Eskom Holdings SOC Ltd. accused the power utility of disregarding rules around wage negotiations by implementing its final offer to workers.

Eskom will implement a 1.5% basic wage increase from July 1, funded through savings realized from reviewing employee benefits, according to the company. The utility declared a dispute with unions earlier this month and the deadlock is now being considered by the country’s Commission for Conciliation, Mediation and Arbitration, for which it hasn’t reached a conclusion.

“Eskom is acting unlawfully by implementing before all the processes are exhausted,” said Khangela Baloyi, energy sector coordinator for the National Union of Mineworkers. “The only recourse we have is compulsory interest arbitration. Eskom is taking that away.”

Once the CCMA makes it findings they will be binding on all parties, Eskom spokesman Sikonathi Mantshantsha said in a reply to questions. “Any party dissatisfied with the process can take the matter on review at the Labor Court.”

The loss-making utility that has subjected the country to intermittent outages for more than a decade, partly because of poor maintenance at its plants, is struggling under a debt pile of 401 billion rand ($28 billion). It considered wage increases of as much as 15% demanded by labor at the start of the negotiations as unaffordable.

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