Common ground to create shared wealth
IOL - BUSINESS REPORT - OPINION / 26 OCTOBER 2020 - 08.01 / DR DENNIS GEORGE
CAPE TOWN - The transaction of the South Africa-based seafood company Premier Fishing SA (PFSA), an affiliate of listed Premier Fishing and Brands Limited, which has issued 30 percent of its total share capital to more than 900 of its employees, and to fishing communities in Saldanha Bay, Cape Town, Hout Bay, Gansbaai and Port Elizabeth, was largest of its kind in the fishing sector in the country.
The Black Economic Empowerment (BEE) transaction would result in 20percent of the allocated shares attributed to an employees share trust, while 10percent has been assigned to a consortium through a special-purpose vehicle for the benefit of employees residing in fishing communities in selected areas where the firm operates.
The BEE is an integration programme launched by the South African government to reconcile South Africans and redress the inequalities of apartheid.
Karl Marx submitted that the social stratification results directly from the relationship individuals have with the means of production. Marx argues that the bourgeoisie are owners of the means of production, and employers have centralised the means of production and concentrated property in a few hands. The PFSA BEE transaction gives employees and fishing communities where the company operate real ownership in the means of production and more importantly a stronger voice within the company through the employees share trust.
Marx argues that workers sell their labour as this is the only way they can survive, the bourgeoisie typically thrives and profit in the industrialised world, whereas the proletariat (lowest economic and social classes in a society) struggle to get by day-by-day.
Marx believed that the situation and working conditions would simply get worse over time and would become more stratified until a revolutionary change occurred to resolve this problem.
The Constitution recognises the injustices of our past that envisage private companies like PFSA to pro-actively fulfil this critical gap to make employees part of inclusive economic development and wealth creation. In the same way, it is critical to redress the job reservation that was initiated by the 1911 Mines and Works Act and the Native Labour Regulation Act that reserved skilled and semi-skilled jobs for whites.
Job reservation was further entrenched and expanded by the infamous "Section 77", contained in the 1956 amendments as well as that certain public sector jobs were reserved for whites. These preferential treatments were extended to private firms to support white workers. What is interesting from the PFSA transaction is that it does not discriminate against its white employees, however, but includes them in their employees share trust to increase productivity and strengthen trust.
The boldness of the transformational plan of PFSA is women leadership, and the shareholder, the Sekunjalo Group, must receive credit for advancing gender balance. Moreover, including employees as shareholders is brilliant.
Dr Iqbal Survé responding to the call of late President Nelson Mandela to strengthen Broad-Based BEE and giving up a successful medical practice should be appreciated.
The PFSA share option scheme is comparatively uncomplicated, and the cost of implementation and maintenance is minimal, mainly because of the trust instrument document containing the terms of the share option scheme and an option agreement between the employer company and the employee.
Generally, in any option scheme, the company grants employees an option to subscribe for shares in the company. Typically, the option may be exercisable by employees after a specific period of service to the company, such as 1, 3, 5 or 10 years, or the granting of the option may be linked to the performance of the employees. The board of directors granted the options to employees selected by the board for that purpose. The board normally determines the employees who qualify for options and the number of shares which are to be the subject of each option, and options are granted employing a resolution of the board.
In the main, it is essential to link the employees share scheme with Worker Education as envisioned by the Human Resource Development Council of South Africa to empower employees in terms of the National Worker Education and Training Framework and Implementation Plan.
President Nelson Mandela said: “Education is the great engine of personal development. It is through education that the daughter of a peasant can become a doctor, that the son of a mineworker can become the head of the mine, that a child of farm workers can become the president of a great nation. It is what we make out of what we have, not what we are given, that separates one person from another.”
Therefore, worker education must be seen in the context of allowing progression in human resource and skills development and vocational education and training in equipping citizens with the requisite human resources and skills to overcome related scourges of poverty, deep inequalities and unemployment
The three pillars of worker education, employee training and joint worker/management education are crucial for an understanding of worker rights, interests and responsibilities as well as the advancement of socio-economic-political wellbeing and wealth creation as the working class. The training and development of employees’ skills within their workplace, sector and in the broader society, which includes vocational training that advances their careers, and which places them on par with workers in developed economies.
The development of joint education and training programmes which address the issues and realities of workers and management, and their companies, to understand the different perspectives and approaches and explore whether there is common ground to create shared wealth and prosperity.
Dr Dennis George is the executive chairperson of African Quartz.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER