Numsa balloting workers for a massive strike at Eskom company.

DATE: 13 August 2004

Johannesburg Press release – for immediate release


The National Union of Metalworkers of South Africa (NUMSA) is currently balloting workers at ESKOM utility company whether to accept the proposed service gratuity amounts with penalties or alternatively embark on strike action to reduce the effects of service gratuity penalties.

Workers at ESKOM utility company are angry at the stubborn refusal of the company to pay for hard years of service (gratuity). According to the agreement concluded in 2003, workers must receive between R4 000 and over R100 000 as a gesture for contribution in the company. The union held many meetings with the company in an endeavor to force the company to compensate workers accordingly. Unfortunately, our pleas fell on deaf ears. There has not been a payout since the agreement was concluded. Workers are poor and any measure of forcing workers to deduct penalties will put a strain on the amount to be paid. Workers were disturbed by the golden handshake payout of R27,4 million to the Executive Director WJ Kok. This also comes in the face of managers and directors dividing R176 million amongst themselves last year. Given the differences in levels of benefits, and packages, it is ludicrous to ask workers to pay penalties. ESKOM workers are paid far below than their directors, some of whom are paid more in one year than a worker will earn in a lifetime.

Many of our members are uncertain about their jobs because of the intense relocation and restructuring process taking place in the company. Many workers are in the distribution divisions and their jobs are at stake with the closure of some divisions. They want to know how much they can be paid on service gratuity and take a decision about their future. The company has failed to understand that labour creates value and determines the ultimate production. It is labour which suffers more and comes under pressure as a result high costs of living standards. The pressure is felt by ESKOM workers and is growing due to rising economic standards. In the same vein, it is the lowest paid workers who are vulnerable to socio-economic costs. These are workers who spend most of their salaries in food and transport not on luxury items. Inevitably, the effects of penalties are devastating to workers as many of them give their social wage to the poor and unemployed.

We will never be convinced that directors should be paid lavish salaries. We view such huge payment of performance bonuses to managers and directors as misallocation of resources. Against this background, we maintain that workers deserve to be paid the service gratuity. Any measure of success for the company is dependent on paying workers better.

The damage to whooping salaries of top managers has been quite enormous. Clearly, nothing dictates in the minds of the managers to share the cake with workers by compensating for the years of long service. The ESKOM multiple boardrooms pay that has been running since the mid 1990s shows no signs of abating. ESKOM managers are topping the salary league. If we had to compare the salaries of executive directors with ordinary workers who are getting R2500 per month, it shows an expanding wage disparity.

Research by the Labour Reaserch Services (LRS) in Cape Town shows that the remuneration gap between an average director and average general worker has doubled from 1:46 to 1:92. The LRS research continue to expose that while workers wages diminish. The increase by executive was 85% and non-executive directors was 164%. Clearly, this has raised a number of critical issues between low paid workers and high salaried directors. The economy has become more unequal because of executive directors paid more than the workers.

(For further information please contact Dumisa Ntuli -@ (011) 689 1700 or 0829737282)