South African state-owned power utility Eskom has concluded a three-year wage agreement that will see employees receive a 7% salary increase annually from July.
The company confirmed the deal on Friday, stating that it will apply to all employees within its wage-bargaining unit, despite opposition from one of the three major trade unions involved in negotiations.
Eskom explained that the agreement is binding because the National Union of Mineworkers and Solidarity together represent more than 75% of workers in the Central Bargaining Forum, making their approval sufficient to ratify the deal.
However, the National Union of Metalworkers of South Africa (NUMSA) has refused to sign, arguing that the increase is below its demand for an 8% raise in the first year of the agreement. The union has indicated that the dispute could proceed to arbitration and may involve industrial action.
The wage agreement follows several rounds of negotiations between Eskom and the unions, which began last year as the utility sought to finalise long-term labour stability.
Under the previous three-year wage deal signed in 2023, non-managerial employees also received annual salary increases of 7%.
Eskom noted that the new agreement comes at a time when inflation remains around 3%, though projections suggest it could rise toward 4% due to global economic pressures.
The utility remains South Africa’s primary electricity supplier and has faced years of financial strain, operational challenges, and repeated government bailouts that have weighed heavily on the country’s economy.
In recent years, Eskom’s performance has shown signs of improvement, particularly in the reliability of its coal-fired power stations. This progress has allowed the company to halt nationwide load-shedding for extended periods.
The utility also reported its first full-year profit in eight years in the last financial cycle, marking a significant turnaround after years of losses and power shortages that affected businesses and households across South Africa.
Despite the improvement, labour tensions remain a concern as unions continue to push for higher wage adjustments in line with cost-of-living pressures.
