South Africa's biggest union National Union of Mineworkers said that it had rejected the latest wage offer by state owned power utility Eskom, but would pursue talks for now before considering a strike that could disrupt the World Cup.
NUM, which represents about half of the 32,000 workers at the utility, toned down its strike threats this week on the advice of a mediator. The NUM said it would give Eskom until Thursday to come up with a better deal than the 8% pay increase offered.
Mr Lesiba Seshoka spokesman of the NUM, which last week warned that its members could down tools, said that "We are negotiating in good faith, but we have totally rejected that offer. We are giving Eskom up to Thursday to come up with a good offer; we have not reached a stage of strike action yet."
A strike is unlikely to hamper electricity supply to stadiums which have standby diesel generators, but there is a concern that the action may interrupt electricity supplies and anger millions watching matches on television.
The biggest worry is the effect a stoppage may have on the economy, especially manufacturers and mining companies in the world's top platinum and fourth largest gold producer. A prolonged strike could halt mining operations, and this may affect metal production and prices.
The NUM and two other unions, which in total represent more than two thirds of the utility's staff, want a pay rise of more than three times the inflation rate of 4.8%. Should the strike go ahead, the other unions have said they may join in.
Economists have accused unions of trying to hold state entities to ransom by using the World Cup to squeeze pay increases far above inflation, possibly damaging the economy as it emerges from its first recession in 17 years.
Eskom has said any work stoppage would be illegal because the utility is classified by the state as an essential service, but should a strike go ahead, it will implement contingency measures to minimize the impact.
The Eskom workers, represented by the NUM, the National Union of Metalworkers of South Africa and Solidarity, want a 15% wage raise and a housing allowance. Eskom's latest offer is for an 8% increase, a 5.6% increase to key allowances, and a ZAR 12,000 per employee once off payment, which the unions rejected.
Mr Bhabhalazi Bulunga HR MD at Eskom said that "This offer is as far as we can go. Our employees know the financial strain that the organization is under, and the need for substantial additional financing for our build program."
(Sourced from www.reuters.com)
