S.Africa union says hopes to reach deal with Eskom

* Strike may disrupt electricity supply during World Cup

* Manufacturing and mining sectors sectors could be hit

* Country suffers a series of labour unrest

By James Macharia

JOHANNESBURG, June 21 (BestGrowthStock) – South Africa’s biggest
union said it was hopeful fresh wage negotiations on Monday with
state-owned power utility Eskom could avert a strike that could
disrupt electricity supply during the World Cup.

“I hope it won’t come to a strike,” said Lesiba Seshoka,
spokesman of the National Union of Mineworkers (NUM), which last
week warned its members could down tools in a labour action that
could cripple manufacturing and mining.

“We are prepared to give negotiations a chance, but if there
is no resolution, then we will call for a strike.”

The union, which represents about half of the 32,000 workers
at the utility, wants a pay rise of more than three times the
inflation rate of 4.8 percent as well as a housing allowance.

Eskom has offered an 8 percent raise and a once-off, 1
percent payment as a housing allowance. Analysts see a
last-minute deal as likely. (For a SCENARIOS factbox, click on
[ID:nLDE65K0KY])

Seshoka said the unions were ready to give the talks a
chance for a few days after being advised by a mediator to tone
down their strike threats.

Should the strike go ahead, two other unions have said they
may join in the work stoppage, raising concerns about power
supply in Africa’s biggest economy.

An official at Eskom said the talks were due to start later
in the afternoon, and may run for a few days in a bid to prevent
a strike during the first World Cup on the African continent.

The three unions threatened to strike over pay last year,
but backed down at the last minute after they won an increase
much lower than what they had demanded. [ID:nLC664093]

Eskom has said should the strike go ahead, it will implement
contingency measures to minimise the impact.

A strike is unlikely to hamper electricity supply to
stadiums that have standby diesel generators, but may anger
millions hoping to watch matches on television.

Worse still for the economy, manufacturers and mining
companies in the world’s top platinum and fourth largest gold
producer could be forced to shut operations, and this may likely
impact metal production and prices, analysts said.

A possible work stoppage at Eskom follows a series of
threats of labour action to freeze transport, abandon security
posts and tie up immigration at airports during the World Cup if
demands for better wages and working conditions were not met.

(For a factbox on labour actions, click on [ID:nLDE65F0X3])

Economists have criticised unions for using the World Cup to
squeeze pay hikes far above inflation, which could dent the
economy as it emerges from its first recession in 17 years.

Eskom workers, represented by three unions – the NUM, the
National Union of Metalworkers of South Africa and Solidarity,
originally demanded an 18 percent wage increase and a housing
allowance, while Eskom offered 5.5 percent.

Eskom has increased its wage offer and the unions lowered
their demand to 15 percent.

Seshoka said the average worker at Eskom earns about 5,000
rand a month, and a housing subsidy of 1,000 rand. The unions
want this replaced by a housing allowance of 5,000 rand.

Investing Basics
(Editing by Jon Herskovitz)

S.Africa union says hopes to reach deal with Eskom