Workers representatives have called for greater legislation governing the employee share benefits schemes in South Africa mining companies to be regulated by the Mineral and Petroleum Resources Development Act (MPRDA) for the greater benefit of workers.
This comes as the Department of Trade, Industry and Competition (the dtic) yesterday held an inaugural conference to provide a platform for advocacy for the Employee Share Ownership Plans (Esops), celebrating their successes, raising awareness and exploring possible collaborative solutions.
Esops are an employee benefit plan that gives workers ownership interest in the company in the form of shares of stock.
National Union of Mineworkers (NUM) representative Seipati Malema said they wanted to see the rules set by the High Court judgement change to state as law what companies were required to do to empower workers.
In September 2021, the Gauteng High Court delivered a judgment declaring the Mining Charter III was simply policy and not legislation.
It ruled that section 100(2) of the MPRDA did not empower the Minister of Mineral Resources to make law, therefore the Charter was not binding subordinate legislation but policy.
Malema said that if Esops were not legislated in the MPRDA, then they were just a policy and not a law.
“Because if that is seen as unconstitutional, when you enter into a mining house they say they have complied, once empowered, always empowered, we’ve got BEE partners, we don’t owe you anything,” Malema said.
“Because this is seen as just a policy. But if it is legislated through the MPRDA, that the 8% that was initially facilitated by the Mining Charter must be included in the MPRDA, then it will not make our job difficult. It will also enhance the programme and the awareness to say we are negotiating from an informed position.”
According to the dtic, there are 125 Esops currently, with 98 having already been established and 27 in the process, benefiting 551 000 workers.
The equity or share value of these Esops is estimated to be R70.3 billion, covering 118 companies.
At least 31% of these Esops are in the mining industry, 21% in food and beverages companies, 14.5% in retail, and 14.3% in finance and banks.
In the last year, the Esops are estimated to have paid out at least R3.1bn in dividends, two-thirds of which came from the mining industry, with beneficiaries receiving an average of R12 800 each.
President Cyril Ramaphosa praised Esops as important to economic transformation.
Ramaphosa said the government had done much to improve the transformation of the economy following devastating apartheid legislation which deliberately excluded black South Africans from “participating meaningfully in the economy of their own country”.
“This is a paradigm shift, which aims to empower workers not only as wage earners but also as partners, as stakeholders with ownership in capital,” he said.
“Workers who feel valued and respected by their employers are more likely to contribute ideas for improving processes, products and services. It is human nature that one is more inclined to contribute one’s best efforts when one has a vested interest in the success of that particular venture.”
A number of companies were awarded for running successful and transformative Esops.
Categories included the highest impact of Esop on company performance (Palabora Copper), Top Champion for Women (Absa), highest shareholder stake and pool of assets in an Esop (Coca-Cola Beverages South Africa), Most Innovative Funding Model (PepsiCo and Anglo Platinum), Outstanding Dividend Distribution (Sibanye Stillwater and Implats), Special Award (Makarenge Electrical and Sandock Austral Shipyards), Largest Number of Beneficiaries (Shoprite), and Best Governance Policies(Shoprite, Coca-Cola Beverages South Africa, PepsiCo, Transport Cooling Africa, Heineken, Spartan Truck Hire, One Logo Group and Sheraton Textiles).
Trade union Solidarity reiterated that Esops should benefit all employees and there are no grounds to exclude white employees from them.
Solidarity General Secretary Gideon du Plessis said they were encouraged by the many calls made at the conference requesting that the funding models for Esops be revisited so that Esops costs were not recovered from employees’ dividends, and that tax relief for participating employers be investigated.
Du Plessis says employers are widely requested to implement Esops, where it is practically possible, at their workplaces in accordance with the Code of Good Practice for Esops that will hopefully be released soon.
“Solidarity welcomes these statements which serve as confirmation that the 2018 dispute between Sasol and Solidarity could indeed have been avoided,” he said.
“This would have been the case had Sasol not excluded white employees from its Sasol Khanyisa Esop at the time – something which now appears to be contrary to the views expressed by Ramaphosa and [the dtic minister Ebrahim] Patel. For this reason, Solidarity praises a company like Coca-Cola that describes its Esop as a ‘colour-blind’ programme.”
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