Presenting his departmental budget speech on 18 May 2021, Minister of Trade and Industry, Ebrahim Patel said that his department is finalising new legislation which aims to narrow the earnings gap between company executives and the lowest-paid workers.
The minister said that the new bill will be finalised within the next two months and that the draft legislation will require disclosure of wage differentials in companies, stronger governance on excessive director pay, and enhanced transparency on ownership and financial records.
More than 230 000 employees currently hold shares in 50 companies, the minister said yesterday. He outlined the department’s vision for the time ahead, which is anchored on integration and forging an inclusive economy.
“What is new in this approach is that worker ownership arrangements should not be in the form of passive dividend-flow arrangements but be accompanied by mechanisms for the voice of labour to be heard in the top decision-making structures in the corporate sector.”
The minister added that more needs to be done to promote black industrialists and small businesses in South Africa. Government will ow look at reviewing and enforcing Black Economic Empowerment (BEE) regulations to improve outcomes. “Though we have made progress with broad-based black economic empowerment, it is clear that we need to bring greater rigour and credibility to BEE statistics and practices and ensure that claims made by firms in their BEE reports are verified,” he said. “This may require adjustments to the reporting requirements. I will appoint an expert panel to review the current BEE framework in order to address these legitimate public concerns.”
Minister Patel added that a practice note under the Broad-Based Black Economic Empowerment Act would be gazetted shortly to provide guidance to regulators and clarity in the market on the treatment of broad-based empowerment vehicles. This will ensure worker ownership schemes, community trusts and union investment vehicles are properly recognised for BEE-purpose.
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