DATE: 05 July 2005

Johannesburg Press release – for immediate release

NUMSA DECLARED A WAGE DISPUTE WITH ESKOM COMPANY.

Yesterday , wage talks between National Union of Metalworkers of South Africa (NUMSA) and the ESKOM utility company deadlocked once again. The wage offer remain unchanged at 5,5% despite the company posting a net profit of R5,2 billion this year. As a result the union has now declared a dispute. The dispute must be mediated within 14 days under the auspices of the CCMA. The union will decide whether or not to call a strike after 14 days provided the impasse remain unresolved. The union has lowered its wage demand to 8% for all 29 000 workers. There have been sharp differences on the union demands. The union is also demanding 60% housing subsidy, pro-rata annual bonus, increase in standby allowance and a two year agreement.

At this time of poverty and unemployment , giving workers 5,5% seems to be an audacious and impudent thing to do. Looking back , it was a major turning point to get the net profit of R5,2 billion. However, the turn around of profits can only be successful if the company will also improve on the wages of workers in a sustained way over a long-term period. We believe that the 5,5% is a bad start in building the future of the company. It is our firm view that justice to decent wages is not only denied , it is also distorted. We also believe that the company has adequate cash on hand to remunerate workers sufficiently rather than saving money to pay lavish salaries to managers and directors.

The wages of workers have attenuated in such a manner that it will be difficult to close the salary gaps between ordinary workers and managers. It is unfortunate that managers and directors do not sacrifice their salaries , annual bonuses and packages. The pick-and-choose approach to wages will never work in the wage talks. 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. 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 diminished 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.

Given the differences in levels of benefits, and packages, it is ludicrous to give a 5,5% disgusting wage offer. 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.

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