More than 150 000 South African workers are now owners of the companies they work for and more worker ownership provisions are being put in place by companies.
This was announced by the Minister of Trade, Industry and Competition, Minister Ebrahim Patel, during a press briefing with business leaders and unions on worker ownership structures. The briefing was held on the eve of the Workers’ Day celebrations on 1 May 2021.
Minister Patel provided information on the progress with implementation of worker ownership arrangements at five companies, covering 30 000 workers.
This includes Coca-Cola Beverages South Africa (CCBSA), which has worked with the dtic on the design and implementation of its worker scheme, which will provide its nearly 8 000 workers with a direct ownership stake in the company, equal to 15% of the equity, and representation on the board of the company through two worker appointed trustees.
Representatives of Coca-Cola joined Minister Patel at the press briefing to discuss their transaction, along with the senior leadership of Pepsico South Africa (formerly Pioneer Foods and Simba), Astron Energy (owner of the Caltex refinery and service station brand), and ABInbev South Africa, all of whom have implemented worker ownership structures following agreements with Government.
During the briefing with the media, Tertius Carstens, CEO of Pepsico South Africa, announced that the company would make available an unencumbered R1.66 billion by September this year to a workers’ trust that will over a period fund the acquisition of shares by workers in the company up to 13% of the firm.
Jonathan Molapo, CEO of Astron Energy, announced that the company had earlier this week completed the transfer of shares, to give effect to the agreement with Government, which would result in their 1 100 workers now owning 5% of the company.
Richard Rivett-Carnac, VP Finance for ABInbev South Africa, announced that the company would be launching a new R5.4 billion empowerment fund within the next few months, R2.4 billion of which would be made available to their 5 600 workers in the company.
The Minister was also joined by Ms Busi Mabuza, Chair of the Industrial Development Corporation (IDC). The IDC has also championed the use of worker ownership structures in their portfolio companies and a means of driving transformation across the economy. The IDC has implemented 25 structures across portfolio companies providing ownership stakes to more than 4 600 workers.
The announcement of the progress made was strongly welcomed by leaders of Business Unity SA, Mr Martin Kingston as well as the General Secretary of the Food and Allied Workers Union (FAWU) Mr Mayoyo Mngomezulu and COSATU official Mr Tony Ehrenreich.
Government’s policy framework for the current administration has identified worker empowerment through ownership structures as a key focus. Already substantial work has been done in this regard, with amendments to the Competition Act promulgated in July 2019, explicitly requiring the competition authorities to look at the impact on worker ownership, when considering if a merger should be approved.
“Through all of this work we are laying the grounds for deeper inclusion and strategic alignment between shareholders, management and workers. But ownership is not enough. The new-generation shareholding arrangement provide for worker representatives on to the boards of their companies,” Minister Patel said
He stated that government, business and organised labour are working on a set of amendments to the Companies Act which will open up the opportunity for greater levels of worker representation on the boards of large companies.
“Broad-based transformation of the economy is of critical importance to re-ignite and unlock the potential of South Africa’s economy,” he stated.
“An important element of broad-based transformation includes bringing workers into the ownership and representative structures of companies across the economy. It is about bringing key wealth-creators in, not only as wage earners but also as owners of capital; and in that way developing an inclusive South African model, shifting from an adversarial approach on the shop-floor.”
Minister Patel further announced new guidelines which will be published on the use of worker ownership and other broad-based ownership schemes so that evergreen structures which provide longevity in their benefit for workers may also be recognised.