Power utility Eskom was set to go ahead with a 5.6% basic wage hike for its employees following the conclusion of an arbitration process overseen by the Commission for Conciliation, Mediation and Arbitration (CCMA).

The arbitration award, which granted Eskom workers a total cost-to-company increase of 6.3%, was decided after Eskom, the National Union of Mineworkers (NUM), Solidarity and the National Union of Metalworkers of South Africa failed to reach an agreement on wage increases last year.

According to the CCMA, the unions had tabled proposals for total cost-to-company increases ranging from 20.1% to 44.3% and, after three rounds of negotiations, Eskom in September declared a dispute with the three unions, the process of which was concluded in November.

“CCMA arbitrator Floors Brand decided on the increase based on a number of principles such as equity, reasonableness and fairness; total cost-to-company demands; what bargaining might the parties have reached by themselves; contending interests of the parties; factors of affordability, comparability, productivity and cost of living; factors of public policy and the bargaining history of the parties,” the CCMA said in a statement.

Solidarity head of metal, engineering and electrical industry Deon Reyneke voiced his “disappointment” at the wage increase offer.

“Eskom’s increases … are lower than average increases agreed to at last year’s negotiations with other employers,” he said.

The decision also emerged a week after the NUM slammed the utility for “paltry” increases and reiterated its demands for a double-digit wage increase.

Reyneke said that Eskom blamed the “meagre” increases on the failure to secure a 16% tariff increase from National Energy Regulator of South Africa (Nersa).

NUM general secretary Frans Baleni said the power utility should be “able to adjust to the 8% tariff increase granted by Nersa without disrupting the livelihood of its employees”, dismissing the group’s 5.6% wage hike offer and pointing out that Eskom’s half-year profit reached R12.2-billion.