Johannesburg - Unions have rejected ArcelorMittal South Africa’s black empowerment scheme.
Trade union Solidarity, which mainly represents white workers, and the National Union of Metalworkers of SA (Numsa), which mainly represents black workers, both aired their grievances with the scheme yesterday.
Solidarity said it would file a grievance against the company on behalf of its members and believed that the scheme discriminated against white employees as shares were allocated according to race.
Numsa spokesman Castro Ngobese said the union was unimpressed by the scheme and was reiterating its call for the government to nationalise the company.
The steelmaker is looking to sell a 4.7 percent stake to a worker’s trust.
Last Friday, ArcelorMittal SA’s shareholders backed a plan to sell 21.1 million shares in the company to the Ikageng worker’s trust for about R1.854 billion, or an average sale price of R87.86, which is nine times more expensive than ArcelorMittal SA’s closing price on the JSE yesterday.
ArcelorMittal SA shares on the JSE yesterday were down 0.2 percent at R9.78, which valued the company at R4.4bn.
The company is also believed to be engaging with potential black investors to take a further stake of up to 21 percent to ensure that it gets its black economic empowerment (BEE) status, currently non-existent, in compliance with government requirements.
According to reports, ArcelorMittal is to source treasury shares on behalf of employees, held in trust for five years from October 1, 2015 to October 30, 2020.
Participation in the scheme is at no cost to workers, who stand to benefit from dividends and capital distributions.
Employees can choose shares or cash value at expiry of the deal.
Marius Croucamp, the head of the metal and engineering industry at Solidarity, said the scheme entailed that black beneficiaries earn returns of 15 percent more than non-designated beneficiaries.
Solidarity said the scheme provided that newly appointed persons qualified for shares simply on the basis of their race and additional shares would be awarded to black employees to ensure that the scheme met the requirements of broad-based BEE.
“Our members feel discouraged by the discriminatory manner in which the shares are allocated to ArcelorMittal employees. Share schemes are supposed to reward loyal workers for their years of service and hard work. That is why it is unfair to award shares to a newly appointed employee merely on the basis of his race. We believe the shares should be awarded solely on merit, irrespective of race,” Croucamp said.
Dirk Groenewald, the head of Solidarity’s centre for fair labour practices, believed that although the BEE Act allowed employers to award shares specifically to black employees, the Employment Equity Act did not allow for such a provision.
“The two pieces of legislation are contradictory,” he said.
He said Solidarity therefore believed that the company was discriminating unfairly against white employees in terms of the mentioned share scheme, in contravention of the principles of the Employment Equity Act.