Eskom dubs bonuses as ex-gratia pay

CASH-strapped Eskom has done an aboutturn on the payment of staff bonuses.

In two weeks, it has gone from saying none will be paid, to promising ex-gratia payments to its unionised staff, to capitulating and agreeing to pay all staff — except the top management — a special payment.

This comes in spite of its failure to meet many of its performance targets.

Based on the utility’s pay data for the past six months, the ex-gratia payment will add R2.1bn to its employee expenses. Asked where the money would come from, Eskom spokesman Khulu Phasiwe said yesterday the payment would be a saving on the unpaid but budgeted-for bonus.

The payment will be equivalent to 6% of an employee’s annual package, which had already been approved by the board, said Mr Phasiwe. “Usually a performance bonus is worth 12% of annual pay.”

It will be paid at the end of this month.

Last month Eskom received a R10bn cash injection from the government to supplement revenue shortfalls over the next five years. Next year, the Treasury will transfer another R13bn raised from the sale of Eskom's stake in Vodacom.

All employees below senior management levels will be paid the bonus.

Senior managers and executives belong to the group’s incentive schemes, which are decided mainly by the board.

Eskom CE Brian Molefe made the promise of a one-off payment at a rowdy meeting with unionised staff more than two weeks ago. He had initially told employees that in terms of Eskom policy, the company could not pay annual performance bonuses since it had failed to avoid load shedding and to bring the Medupi power station to commercial production by the March 31 deadline.

When the staff protested, telling him they were not responsible for many of Eskom’s failures, Mr Molefe promised to pay the lower-ranked, unionised employees the once-off payment, while excluding the rest.

The utility employs more than 46,000 people, and had a salary bill of R13.2bn for the six months to September, it said in a recent presentation. Last year’s salary bill cost the company R22.4bn.

Eskom’s earnings have been declining for the past four years, along with its dwindling ability to meet electricity demand.

Lower-than-desired electricity price increases have also contributed to its fragile financial position.

Eskom expects only to break even for the year to March.

In June, the National Energy Regulator of SA declined the parastatal’s request for a further price increase.

Eskom CE Brian Molefe promised a one-off payment at a rowdy meeting