With the country’s economy already hard hit by the Covid-19 pandemic, the situation does not seem to be improving with the restrictions of the pandemic being lifted. But recently, the main culprit for the country’s ever tightening budget is the steadily increasing plague of loadshedding.
According to well-known loadshedding app, EskomSePush, the power utility had implemented loadshedding for 2881 hours (120 days) for the year by 21 November 2022. By the end of 2022, the country had experienced triple the amount of loadshedding for the preceding year, with only 1153 hours (48 days) of loadshedding scheduled in 2021.
The energy crisis is only escalating, with Eskom announcing that it is considering continuous loadshedding for the next two years at stages 2 and 3. This, the utility says, is to allow for maintenance to be done on aging power plants, and to provide clients with better predictability. Continuous breakdowns at power generating facilities, sabotage, employee negligence, and difficulty in securing diesel for emergency generators, has pushed Eskom to implement higher levels of loadshedding than in previous years, with stages four through six not being uncommon. The outlook for the upcoming months is made bleaker by the fact that Eskom is not planning on running its open-cycle gas turbines to generate buffer capacity during peak times, as it has already spent over double its intended budget for diesel for its entire 2022 financial year.
Despite its inability to provide consistent power to the country, NERSA has granted Eskom an 18.65% tariff increase, which has garnered widespread criticism by business, labour, and opposition parties. Opposition parties including the Democratic Movement and Build One South Africa, as well as the National Union of Metalworkers of South Africa, have filed a legal challenge against the tariff increase to be heard in the Pretoria High Court on 28 February 2023.
The impending tariff increase stands to deal a heavy blow to the currently proposed increase of 8% to the National Minimum Wage. It is predicted that the effect of the tariff hike would erode the wage increase by 47%, leaving vulnerable workers in the same position, or worse off, than they were in 2022. Data by the Pietermaritzburg Economic Justice and Dignity Group shows that on average 20.2% of the National Minimum Wage is currently allocated towards procuring electricity. With the 18% tariff hike on the proposed 8% wage increase, expenditure on electricity may reach 22.2% of the National Minimum Wage, leaving families with less to spend towards necessities such as food and travel. This does not yet take into account the knock-on effects the tariff increase will have on costs of living such as food prices, fuel, etc.
Economic Freedom Fighter party leader Julius Malema has since threatened a national shutdown for 20 March 2023 in protest of the ongoing loadshedding. He intends for this protest to occur without following any of the formal procedures that would render such socio-economic protest protected.
The business sector is particularly hard-hit by all the outages, with the frequent and sometimes unpredictable loss of power affecting employers’ ability to keep operations running at full capacity. With the power off for two to four hours in the middle of the workday, it is difficult for employers to manage shifts and keep production going without running at a loss, as employees must be paid irrespective of whether they are able to perform their duties. Agreements can be made for employees only to be paid for services rendered but reorganising shifts to avoid loadshedding inevitably affects aspects such as overtime. The Basic Conditions of Employment Act further requires employees who tender their services and are sent home due to inability to render service to be paid for no less than four hours’ work, even if they do not work a full four hours.
At this rate, companies who cannot afford alternative power generating solutions may be forced to cut hours or jobs to keep up. Inconsistent power supply may also force employees accustomed to working from home to return to offices where their employers can generate backup power.
It is clear that loadshedding is here to stay for the foreseeable future. Companies must take a hard look at how they operate and attempt to adapt to the situation to maximise their outputs with the power and resources available to them. This may require both employers and employees to be more flexible in organising working arrangements to ensure the continued viability of the business going forward.
Written by LabourNet
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)