At last year’s Mining Charter negotiations trade unions campaigned for employee representation on company boards, and a clause making provision for such representation was included in the draft charter. This clause was scrapped at the eleventh hour at the insistence of the Minerals Council South Africa (MCSA), the robust nature of labour relations being the underlying cause for this move. This was also indicative of the poor cooperation and trust between role players. The Department of Mineral Resources itself was uncomfortable with the clause given the fiduciary obligation it would place on employee representatives.
Earlier this year, at the annual Africa Mining Indaba, Pres Cyril Ramaphosa challenged mining houses to have the courage of their conviction to give employees representation on their boards. In response, Minerals Council president Mxolisi Mgojo acknowledged at the Council’s annual general meeting in May this year that a mature relationship between employers and trade unions must first be established before employee representation could be considered.
Germany is the world leader when it comes to employee representation on boards, and the German embassy in South Africa, in collaboration with the Gordon Institute of Business Science (GIBS), last month invited Reiner Hoffmann, chairperson of the German Trade Union Confederation, and Peter Clever, board member of the Confederation of German Employers’ Associations, to address South African trade union and business leaders on the German system of co-determination.
Hoffman pointed out that after World War II the Germans realised that it was division in trade union ranks and in employer ranks, and between trade unions and employers that created the opportunity for a Nazi regime to develop without resistance. It was division that prevented employers and employees to offer collective resistance. After the war trade unions were thus united in one trade union confederation and employers in one employer organisation.
According to Clever, German employers and trade unions also realised at the time that labour peace and increased productivity were essential elements for economic growth. In practice, this means that agreements between employers and trade unions must take into account the interests of employers and employees alike, and a win-win agreement that is thus reached results in labour peace. This employer/employee maturity paved the way for the democratisation of the workplace and supervisory boards with equal representation between employees and shareholders were established in workplaces, while employees were given a further say in works councils. A key element of the system is that there is less interference from politicians in workplaces.
What the South African economy of today and the post-World War II German economy have in common is that the South African economy is on its knees today, and what is needed for economic revival, apart from sound governance, will be labour peace, unity in the workplace and increased productivity. However, Martin Schäfer, the German ambassador to South Africa, warned that labour relations will be an obstacle to economic growth if characterised by distrust and ideological warfare – which is typically the case in South Africa. If labour relations are characterised by trust, responsibility and clear rules, as is the case in Germany, then it will lead to economic growth.
South Africa is far behind Germany when it comes to the implementation of co-determination, but Sipho Pityana, president of Business Unity South Africa (Busa), who also participated in the GIBS discussions, made the point that after the appointment of James Motlatsi, the founder and first president of the National Union of Mineworkers (NUM) to the AngloGold Ashanti’s board, this mining house saw a decline in mining mortalities. Motlatsi convinced board members of his view that the interests of employees should take precedence over profit. Although Motlatsi was no longer an employee of the company at the time of his appointment, there is still something to be learned from this example.
South Africa still has to overcome many challenges, though, before employees will get representation on company boards. In addition to an amendment to the Companies Act to provide for employee representation, a stronger commitment from employers, employees and trade unions is needed to mitigate the mutual rivalry and to bring maturity to relations. This is not going to happen overnight but a progressive employer who makes provision for employee representation on his board can accelerate workplace maturity by taking such a brave step.
Gideon du Plessis is Solidarity’s General Secretary