S.Africa union gives Eskom 7-day strike ultimatum

Sun Sep 18, 2011 9:10am EDT

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* Eskom powers Africa's biggest economy

* Utility has said any strike would be illegal

By Ed Stoddard

JOHANNESBURG, Sept 18 (Reuters) - South Africa's powerful National Union of Mineworkers said on Sunday it had given state-run power utility Eskom seven working days to respond to its wage demands or face possible strike action.

Eskom, which provides virtually all the power for Africa's largest economy and the world's top platinum producer, has said a stoppage would be illegal as it provides an essential service and any strike will almost certainly be challenged in court.

But a showdown is looming as the NUM demands a 13 percent wage increase against 7 percent offered by Eskom. The two sides are also at loggerheads over pension funds and housing allowances.

"This is the last chance we are giving them," NUM spokesman Lesiba Seshoka told Reuters.

Seshoka said the union's latest set of demands was presented to Eskom management on Saturday and that the deadline was a week from Tuesday, or Sept. 27.

"But if their response before then shows no movement we will take them on before then and may declare a strike action before then," he said.

Earlier this month, the mediator -- the Commission for Conciliation, Mediation and Arbitration (CCMA) -- issued a "certificate of non-resolution" to NUM and two other unions in the talks, a necessary step toward legal strike action.

Unions have been angered by what they say was an attempt by Eskom to unilaterally impose the 7 percent hike.

Eskom says that if the increases are not implemented in the September pay roll then workers will have to wait until November to get any raise because of an upgrade to the system which will take place in October.

NUM said in a statement on Sunday that it had challenged Eskom's moves to implement the 7 percent increase in the country's labour court.

The 13 percent NUM is demanding is far above the inflation rate of 5.3 percent in July. Most settlements in the mining sector this year have been in the 8 to 10 percent range, a scenario economists say cannot be sustained in the long run.

Eskom is battling to meet fast rising power demand and has been steeply hiking the rates it charges consumers to meet the costs of building new plants.

Eskom has a workforce of about 40,000 and says about 27,000 of its employees are unionised. Of the three unions represented there, NUM is the biggest with about 16,000 members.

If a strike took place and it disrupted energy generation it could blunt South Africa's fragile economic recovery and impact output from the key mining sector, which is very power intensive. (Editing by Rosalind Russell)

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