ANALYSIS: Ramaphosa puts worker ownership of companies on the table
FIN24 / 26 SEPTEMBER 2019 - 20.20 / FERIAL HAFFAJEE
President Cyril Ramaphosa upped the game when he put worker ownership of companies on the table at the congress of the SA Clothing and Textile Workers Union last week.
Ramaphosa told members of Sactwu that securing co-ownership was important to give workers a say in industries, and to prevent the increasing conflict that has sparked a wave of strikes.
Banking union Sasbo was on Thursday interdicted from proceeding with what would have been the biggest banking strike in 99 years, and which would have taken labour action decisively into the services industry. The idea of workers as owners is gaining currency as the model of twenty-first-century capitalism comes under increasing scrutiny.
In his new book Capital and Ideology, economist Thomas Piketty raises worker ownership as a means of redistributing wealth. Ramaphosa has been a long-time supporter of the idea, and raised the policy option for the first time since becoming being elected into office just over 100 days ago.
Piketty recently said worker ownership would allow "new social groups to become owners and shareholders".
While employee share ownership schemes are touted in black empowerment laws as a more legitimate form of black economic empowerment than the crony deals that characterised the first era of BEE, they have not been successful. Journalist Carol Paton, writing in Business Day about mining sector deals, noted that workers had not made significant gains.
But the worker ownership now on the table is different – Ramaphosa suggested a more German model of ownership, where workers co-determine corporate strategy.
It is a method favoured by both the ruling African National Congress and the official opposition the Democratic Alliance.
In its election manifesto ahead of the May 2019 national election, the ANC promised to "introduce legislation for the extension of company ownership to a broad base of workers through an employee ownership scheme and similar arrange arrangements to supplement workers’ incomes and build greater partnerships between workers and owners to build these businesses," according to its manifesto.
"Social partners (government, labour and business) will put together the minimum thresholds and conditionalities to govern the establishment of worker-ownership funds, paving the way to empower millions of workers across the economy."
The ANC said in its manifesto that the government would provide public assistance (which means state funding) to help workers buy shares.
With a depleted fiscus, the assistance is unlikely in the short term, but the idea is now on the table.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER