Vernon Daley, Staff Reporter
DESPITE FIERCE opposition from the Jamaica Labour Party (JLP), the Senate yesterday approved amendments to the Employees Share Ownership Plan (ESOP) Act to encourage greater participation in the programme.
Senators Dwight Nelson and David Panton, led the charge from the Opposition benches to have the government put the amendments on hold pending a comprehensive review of the legislation.
"It is complex and has only served as a hindrance to the setting up of ESOP programmes," Senator Nelson said during a four-hour debate on the Bill.
Senator Nelson, a trade unionist, said the government had to take responsibility for the poor record of ESOPs since the programme was introduced. He said that the legislation was unwieldy and argued that it offered very little incentive for companies and workers to buy into the concept.
The ESOP scheme was created in 1994 to encourage greater worker ownership of enterprises. Since the Act was passed in 1994, only 16 applications have been submitted to start ESOPs. Seven of these were approved, but only five are in operation.
The amendments to the Act, which were passed in the House of Representatives just before the Christmas recess, are aimed at making the scheme more attractive to both workers and employers.
It seeks to facilitate the establishment of ESOP schemes in groups of companies, spanning diverse industries with different employment and wage patterns; provide tax relief to employees on repayment of loans made to them to acquire ESOP shares; and set a more favourable minimum threshold of tax relief for lower paid workers.
However, Senator Panton argued that the amendments were inadequate. He recommended to the Senate that a joint select committee be set up to do a thorough review of the law to make it easier for both workers and employers to understand its provisions.
"While I must concede that there are some important and impressive improvements in this legislation, there are also areas that not only fail to simplify the original legislation but, in fact, further complicate the original legislation," he said.
The stance of the JLP Senators was a departure from the support given to the amendments by their party colleagues in the House of Representatives a few weeks ago.
Government Senator Trevor Munroe admitted that ESOP schemes had not taken off in the way that was originally expected when the Act was passed in the 1990s. However, he contended that this was not due primarily to the defects of the legislation, as was suggested by the Opposition.
According to him, the distrust between management and labour was the central reason why many workers shied away from ESOP schemes.
"That level of distrust is one that we have to commit to reduce," Senator Munroe said.
He also pointed to the unwillingness of some businesses to encourage employee ownership, as one of the factors which have impeded the development of ESOP schemes.
Attorney-General and Minister of Justice, A.J. Nicholson, recommended that the JLP support the amendments and, at a later stage, seek a more fulsome review of the legislation by Parliament's Economy and Production Committee.
