Eskom offers employees cash packages to leave the company

Eskom is offering non-core and older employees voluntary cash separation packages (VSPs) to cut its workforce as part of its turnaround plan.

On 29 January 2020, the executive committee secured and recommended to the Eskom board a limited amount of R400 million to implement limited separations.

The Eskom Board supported the proposed voluntary separation package benefits implementation process and plan with costs capped at R400 million.

This window of voluntary cash separation packages will open for managerial level employees in non-core positions.

Further to this, managerial employees from 60 to 62 years old will also be eligible to apply, irrespective of being in core, critical, or no-core positions.

“This process is voluntary, and no employee should be coerced or requested to apply,” Eskom told employees.

Approval for separations will be at Eskom’s discretion and based on “approved guiding principles that will be communicated in due course”.

The approved separation benefits will be based on two weeks remuneration per completed year of service and a gratuity payment of R75,000.

The window for applications will open in the 3rd week of February 2020, with employee exits planned for the end of April 2020.

Large workforce

It is widely recognised that Eskom has a bloated workforce, but because of the government’s resistance against any staff cuts the company cannot retrench staff.

Eskom’s national spokesperson Sikonathi Mantshantsha said an Eskom staff audit conducted in September 2018 revealed that the company has 16,000 more employees than what it needs.

Despite this finding, the government’s message to Eskom was clear: “Don’t touch them”.

“The reality of the matter is that the last call comes from the shareholder in any organisation, and Eskom is no different,” said Mantshantsha.

“In this instance, the shareholder happens to be the government [which said no employees may be retrenched]”.

Voluntary cash separation packages are seen as an acceptable way to get rid of employees without retrenchments, which is why Eskom is now using this strategy.

Now read: Eskom has 16,000 staff too many, but they are untouchable

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Eskom offers employees cash packages to leave the company