SHARES - A NEW WAY FOR TRADE UNION APPROACH

The country’s leading trade unions should consider adopting a new approach to salary and/or wage negotiations and seek agreements which would allow for the purchase of shares by their members in publicly listed companies where they are employed. The concept would apply to foreign owned companies which although public are however not listed on the Trinidad and Tobago Stock Exchange. The above would be in addition to wage and salary demands and would give the workers a sense of belonging and, with a stake in the companies, would provide them with an even greater incentive to be more productive. The principle of employee stock ownership programmes has already been adopted in Trinidad and Tobago, though, as a general rule, it has come from the employers themselves. One of the benefits which should not be ignored is the tacit profit-sharing that this will mean.

What is being advocated here is the acceptance of a tactic by trade unions which will benefit both employers and employees and if accepted by a large number of employers would see a tacit reaching out to employees and the understanding by workers that increased productivity on their part will be beneficial to them in the short, medium and long term. In addition, companies should be asked to offer workers shares instead of the customary bonuses. There should not be a difficulty in foreign-owned companies, for example those registered in the United States of America, accepting the argument of employee stock ownership, as this thinking has formed part of the American industrial relations landscape for several decades. Indeed, in the case of some companies employee shareholding represents the single largest block of shares.

Trade unions or other worker representative organisations should seek to encourage employers to guarantee bank loans for their workers for the express purpose of acquiring shares in their companies. Perhaps I should point out that the bank loans would not be on an individual basis, but rather for a block purchase of shares. The principle is what in the US is referred to as a “stock-ownership trust.” Employee ownership of stock would give the worker, who now has a financial stake in his company, heightened self-esteem. Pension funds can be established as a result of the employee stock ownership, so that as a result workers, come retirement, will have enhanced pensions and be asured of reasonable standards of living in their more mature years.

Trade unions and individual employers as well as Chambers of Commerce, the Trinidad and Tobago Manufacturers’ Association and other business organisations should view the question of employee stock ownership as a contributory factor in the much discussed 20/20 vision. Peter Drucker, the celebrated management consultant, once argued that these stock ownership funds, together with their family of funds, were positioned to control nearly all of the United States’ “1,000 largest industrial corporations”. Drucker was quoted in “The Revolution No One Noticed”, published in the Chicago Tribune of July 18, 1976. as stating that the equity owned by the funds was approximately 35 per cent. Drucker would also advance a rather interesting concept, interesting that is, particularly for capitalist USA, that of “pension fund socialism.” Howard Chase would also treat with this in “The Issue: Employee Ownership of the Industrial System through Their Own Pension Plans”, published in Corporate Public Issues on September 15, 1976. But I have strayed.

Trinidad and Tobago provides the United States of America, for example, with a substantial portion of its liquefied natural gas needs. Estimates have placed the amount supplied for last year as in excess of 75 per cent. If all permanent workers employed either directly or indirectly in this multi-billion dollar exercise, including even those on the tug boats, were beneficiaries of what Peter Drucker has termed “pension fund socialism” it would contribute to an ease in their retirement years. The same, if applied to all of the energy majors and some, would give the relevant workers, including monthly staff, a needed stake in the corporations, as stated earlier, a corresponding share of the profits, an enhanced feeling of self esteem and that of belonging.