South Africa’s state-owned power utility, Eskom, has reached a three-year wage agreement with labour unions, under which workers will receive annual salary increases of about 7% from July, after months of negotiations.

The development was confirmed in a statement issued by the power utility on Friday. 

According to Eskom, the agreement is binding despite one of the unions declining to sign, as the other parties to the negotiations represent a majority of workers. 

The deal was reached with two unions, the National Union of Mineworkers and Solidarity, which together represent more than 75% of employees in the Central Bargaining Forum. 

The utility said that level of representation is sufficient to make the agreement enforceable on all bargaining unit employees. 

“The agreement will apply to all employees within the bargaining unit adding that the outcome followed several rounds of negotiations that began last year,” Eskom stated, 

Wage structure retained in new deal 

The new wage deal follows a similar pattern to Eskom’s previous three-year agreement signed in 2023, where non-managerial employees also received 7% annual increases. 

According to industry data, negotiations that produced the current agreement began last year, with the National Union of Mineworkers initially demanding a 15% wage increase following Eskom’s return to profitability. 

In 2023, NUM similarly opened with a 15% demand before the parties settled on 7% annual increases across a three-year period, and in 2022, a 7% wage agreement was reached that ended a one-week unofficial strike. 

Eskom said the latest outcome represents continuity in its wage framework, even as the utility recorded a profit before tax of R23.9 billion (about $1.3 billion) for the financial year ending March 2025, its first full-year profit in eight years, reversing a R25.5 billion (about $1.4 billion) loss the previous year. 

Pay rise exceeds inflation 

Moreover, the agreed 7% annual increase exceeds South Africa’s current inflation rate of approximately 3%, with projections indicating it could rise toward 4% in the near term. 

 Eskom did not indicate any changes to the structure of the agreement despite the inflation outlook. 

However, the National Union of Metalworkers of South Africa has not signed the deal and is seeking a higher increase.  

The union had demanded an 8% salary adjustment in the first year and indicated that the dispute could proceed to arbitration, with the possibility of demonstrations.  

Meanwhile, the utility added that the three-year framework provides labour certainty over the medium term, with the agreement effective from July 1, 2026. 

The deal represents the second consecutive three-year collective bargaining arrangement concluded by Eskom, a structure the utility said supports cost predictability and operational stability.  

Eskom’s Group Chief Executive, Dan Marokane, described the conclusion of the wage process as “an important procedural milestone,” adding that the utility’s employees are central to driving sustainable growth and building a resilient organisation.