30 October 2012

Employee ownership organisation rejects “employee-owner“ plans

"There is no need to dilute the rights of workers in order to grow employee ownership."

The Employee Ownership Organisation, which represents employee-owned businesses “contributing some £30bn to the UK economy each year”, has written an open letter to Jo Swinson, the incoming Minister for Employment Relations, Consumer and Postal Affairs, about the government’s plans to introduce a new “employee-owner” status for workers in some businesses.

Earlier this month, I referred to the plans as “Beecroft through the back-door“, and in the intervening time, the actual proposals haven’t got any better, while the execution of them has been even worse than expected. The first reading of the bill to introduce the new status happened on the very same day that a consultation into its implementation was launched. Today is the second reading of that bill, while the consultation doesn’t even close until 8 November.

No wonder, then, that the EOO is concerned that the measures may tarnish the entire concept of employee ownership. The EOO’s Chief Executive, Iain Hasdell, writes in his letter to Swinson that members of his organisation have three concerns:

Firstly, proposed legislation has appeared in a Bill before the Government consultation on the possibility of deploying this model of employee ownership has finished. Indeed it has only just started. Secondly, our Members are very aware that there is no need to dilute the rights of workers in order to grow employee ownership and no data to suggest that doing so would significantly boost the number of employee owners. Indeed all of the evidence is that employee ownership in the UK is growing and the businesses concerned thriving, because they enhance not dilute the working conditions and entitlements of employee owners. Thirdly, the appearance of this measure in the Growth and Infrastructure Bill appears to our Members to be completely disconnected to the recommendations in the Nuttall Review. That Review, as you know, contained a series of recommendations on how to grow employee ownership and none of those recommendations suggested the dilution of worker rights.

If it wasn’t clear enough that these measures are a proposal aimed at reducing rather than increasing employees’ rights in the workplace, the fact that the very organisations they are named after are rejecting them ought to be a strong indicator.