Power utility Eskom has announced that it has formally concluded its 2026 wage negotiation cycle, with workers accepting a 7% annual increase, starting 1 July.
While the National Union of Metalworkers of South Africa (NUMSA) rejected the offer, two other unions, the National Union of Mineworkers (NUM) and Solidarity, accepted it.
NUMSA had indicated that its members wanted an 8% increase and had declared a deadlock, threatening to push the matter to arbitration with demonstrations.
Unions were demanding 15% increases when the wage negotiations began at the end of 2025.
Because the signatory unions represent more than 75% of the employees in the forum, Eskom said the agreement will be binding, including for those workers affiliated with NUMSA.
The utility added that maintaining a three‑year framework establishes a predictable environment that reduces the volatility associated with annual bargaining cycles.
“The agreement continues Eskom’s established practice of multi‑year collective bargaining arrangements, supporting cost predictability and operational stability,” it said.
The key elements of the agreement are:
- A 7% annual salary increase for all employees within the bargaining unit.
- The agreement is effective for a three‑year period, starting from 1 July 2026, providing labour certainty over the medium term.
“The established multi‑year framework secures the labour stability and skills necessary to maintain and reinforce Eskom’s recent gains in overall system performance,” it said.
Eskom said the agreement was in line with the group’s Cost Optimisation and Revenue Enhancement (CORE) programme.
This programme is targeting R112 billion in cost savings over five years.
Staff costs are one of the biggest line items for the state-owned power utility, with far above-inflation increases compounding over the years.
Eskom’s 2025 financial year report showed that the power utility incurred an average cost of R1.026 million per employee, 12.4% higher than in the previous year.
For 2026 onwards, the 7% wage hikes are more than double inflation, which is currently around 3%, and projected to be between 3.2% and 3.5% for this year.
In the near term, the market chaos stemming from the United States’ war against Iran in the Middle East is expected to push inflation to around 4.0%-4.5%.
However, this is seen as a temporary shock, with the South African Reserve Bank also expected to hike interest rates to contain it.
Over the medium term, the central bank will be driving inflation towards its new target of 3%.
Notably, the wage increases for Eskom workers will kick in on the same day that municipal electricity users will see tariffs increase by around 9%, subject to Nersa approval.
Municipalities are currently in the process of submitting their proposed hikes to Nersa, with the deadline set for 21 April 2026.
