Workers call for tighter legislation in employee share incentive plans

IOL News reports that 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. 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.

by Siphelele Dludla

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