Debbie Collier (co-author of Executive salaries in South Africa: Who should have a say on pay?), has called for unions to push for worker representation on remuneration committees in order to address income inequality within companies. This suggestion was made during her recent presentation at the Federation of Unions’ collective bargaining conference in South Africa. A summary of her remarks can be seen on this SABC news segment.
The recommendation to involve workers on remuneration committees is not unique to South Africa. The UK’s Trades Unions Congress has made a similar proposition. TUC argues that remuneration committees lack diversity because most members have been directors for many years and often serve on the remuneration committee of more than one company. Members of remuneration committees make many multiples of the average worker’s wage every year and thus are out of touch with the average worker’s reality. This lack of diversity on remuneration committees impedes real change because the current members have an incentive to maintain or inflate remuneration. By having employees serve as remuneration committee members, the board would be encouraged to consider other viewpoints as well as rates of pay at all levels of the company.
The question is whether South African labour unions will heed the call to actively and productively engage with companies on wages being paid at all levels of a company. South Africa’s system of collective bargaining is unique, not in terms of the letter of the law, but in terms of the atmosphere in which it is conducted. Due to apartheid’s legacy, worker and company relations are strained at best, and violent and deadly at worst. Deep mistrust runs between those at the top and bottom of the corporate structure. South African labour law already provides workers with the right to create workplace forums to engage companies on various issues, but to date, these rights have been largely ignored in favour of traditional adversarial methods of collective bargaining.
Strikes and worker unrest, however, are crippling the South African economy. The violence exhibited by both workers and the police sway businesses away from investing in the country. More productive methods of engagement must be found if South Africa is to move forward. Worker representation on board remuneration committees could be just the place to start this dialogue. Not only would it provide workers with an opportunity to have a (hopefully) productive voice, but it would help companies meet their obligations to remediate historical income inequalities rooted in apartheid.
What do you think? Would giving workers representation on remuneration committees be productive? Or would it just result in one more forum for workers and companies to clash?