Eskom: Labour agreements for Medupi and Kusile

Eskom announced yesterday that employers and labour at the Medupi and Kusile project sites have entered into a Partnership Agreement which aims to stabilise labour relations on site and expedite delivery of the two new power stations.

The Eskom capacity development projects, medupi and Kusile have been dogged by labour volatility leading to delays in construction of the coal fired power plants. This has placed eskom and the country in precarious situation given the tight supply and demand in the national power grid.

Medupi was initially scheduled to come on stream last year and has been postponed twice to December. There are indications the December deadline will also be missed but the minister of public enterprises Malusi Gigagaba has piled the pressure saying the December deadline must be met, come hell or high water. Gigaba has threatened that heads will roll if the December deadline is not met.

Eskom said the new Partnership Agreement will ultimately replace the old Project Labour Agreements which governed the Medupi and Kusile sites, and has been signed by Eskom, the contractors who employ most of the labour, and organised labour at both sites. It aims to ensure consistent and acceptable treatment for all the workers on the two sites.

“This is an innovative and far-reaching agreement which commits all the partners – Eskom, contractors and labour – to work together to deliver Medupi and Kusile and provide the new capacity needed to support growth and development for South Africa,” said Eskom CE Brian Dames.

Where only contractors and labour were previously signatories to the Project Labour Agreements at Kusile and Medupi, the new Partnership Agreement includes Eskom as a signatory.

“We are very encouraged to have concluded this milestone agreement,” said Paul O’Flaherty, Eskom’s Finance Director and head of Group Capital. “Eskom is taking a much more active role in the labour relations on the project sites, and we are working with employers and labour to ensure that workers are fairly treated and that we can improve productivity and focus on delivery.”

The partnership agreement will enable the finalisation of new, site-specific agreements at Medupi and Kusile which will replace the current policies and agreements. However, the new agreement does not replace existing industry forums and bargaining structures, said Eskom.

The state owned utility added that the parties have agreed on a process to implement the provisions of the agreement. This includes establishment of partnership forums within which any outstanding substantive issues can be resolved.

Among the provisions of the Partnership Agreement are:

  • A minimum wage for all hourly paid contractor employees
  • Standardised pay rates within each company, across companies and within the same industries. The contractors must ensure that pay scales are applied consistently.
  • A new Central Wage Bureau will be put in place to aid standardisation
  • The parties to appoint a task team to address the relevant skills development and training needs for employees and employers on site.

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