Wednesday, June 30, 2010

South Africa's Eskom Says Firm Can't Meet Union Demands

S. Africa's Eskom says can't meet union demands

Wed Jun 30, 2010 6:25pm GMT

Eskom says cannot afford union demands

NUM issues strike notice

Eskom says strike illegal, sees arbitration as next step

By James Macharia

JOHANNESBURG, June 30 (Reuters) - South African power utility Eskom said on Friday it cannot afford demands sought by unions, adding to fears of a strike that could disrupt power supply during the soccer World Cup.

The company's biggest union said it had issued a strike notice to the
firm, and a second union said on Wednesday it would join the strike
after its members rejected a new pay offer from the firm.

"We cannot afford that as a company," Chief Executive Officer Brian
Dames of state-owned Eskom said of the union demands. "The offer we have put on the table is fair and it is reasonable."

He added that a strike could disrupt supply if it lasts for more than
a few days, and Eskom would take disciplinary measures against anyone who participates in strikes it considers illegal.

A spokesman for the National Union of Mineworkers, Lesiba Seshoka, said the union which represents half the firm's 32,000 employees had issued Eskom with notice of its planned strike.

"We have issued a notice to Eskom, giving them more than the 48 hours required by law," Seshoka told Reuters. "We cannot as yet disclose the date of the strike, which will be next week, but we will inform the public as soon as we finish planning the logistics for the work stoppage."

Sources close to the talks said informal negotiations were still under
way, however.

The National Union of Metalworkers of South Africa (Numsa) said its
members had also rejected Eskom's latest offer and would join the NUM in the planned strike. "Members have rejected the offer, and there will be mass action next week. We are going to strike together with the other union," Castro Ngobese, Numsa's spokesman, told Reuters.

A third union at Eskom, Solidarity, said its members had also rejected an improved offer from the firm, but it wanted the utility to revise its offer by Monday before it would take a decision on whether to join any strike.


Any power disruption could harm manufacturing and mining companies in the world's top platinum and fourth-largest gold producer possibly forcing them to curtail operations and pushing up precious metals prices.

It could also embarrass the country and anger fans during the World
Cup, which ends on July 11. Stadiums are equipped with their own power generators but millions of fans watching from home on TV could potentially be affected.

"The unions are prepared to fight it out. I do think that management
will fold. Management will be under enormous pressure from the
government and elsewhere," said Nic Borain, an independent political analyst.

Seshoka said Eskom had offered an 8.5 percent pay rise and 1,000 rand per month housing allowance, which was turned down by the NUM's members. The NUM has been seeking a 9 percent wage raise and an allowance of 2,500 rand.

Eskom's human resources managing director, Bhabhalazi Bulunga, said it was unlikely the union would strike.

"The next process is to go to arbitration, there is no room for
industrial action because this is an essential service and the parties
are not far from each other," he told Reuters.

"It will be an illegal strike. We also have a court interdict in force
to prevent such action," he said in reference to a court order
obtained by Eskom in May preventing a similar strike threatened by the NUM.

Union leaders have said arbitration is not an option. (Additional
reporting by Jon Herskovitz and Shapi Shacinda; Editing by Peter

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