House of Commons Amendments

Session 2012 - 13
Internet Publications
Other Bills before Parliament

205

House of Commons

Tuesday 17 July 2012

Public Bill Committee

New Amendments handed in are marked thus

Amendments which will comply with the required notice period at their next appearance

Enterprise and Regulatory Reform Bill

Note

The Amendments have been arranged in accordance with the Order of the

Committee [19 June 2012]

Norman Lamb

56

Page  46,  line  34,  leave out Clause 57.

Caroline Lucas

1

Clause  62,  page  49,  line  5,  at end add—

‘(5)
Section [Permission to borrow from the capital markets] comes into force on the

day on which this Act is passed.’.

NEW CLAUSES

Confidentiality of negotiations before termination of employment

Norman Lamb

NC2

To move the following Clause:—

‘After section 111 of the Employment Rights Act 1996 insert—

Public Bill Committee: 17 July 2012
206

Enterprise and Regulatory Reform Bill, continued

“111A
Confidentiality of negotiations before termination of employment

(1)
In determining any matter arising on a complaint under section 111, an

employment tribunal may not take account of any offer made or
5
discussions held, before the termination of the employment in question,

with a view to it being terminated on terms agreed between the employer

and the employee.


This is subject to the following provisions of this section.

(2)
Subsection (1) does not apply where, according to the complainant’s
10
case, the circumstances are such that a provision (whenever made)

contained in, or made under, this or any other Act requires the

complainant to be regarded for the purposes of this Part as unfairly

dismissed.

(3)
In relation to anything said or done which in the tribunal’s opinion was
15
improper, or was connected with improper behaviour, subsection (1)

applies only to the extent that the tribunal considers just.

(4)
The reference in subsection (1) to a matter arising on a complaint under

section 111 includes any question as to costs, except in relation to an

offer made on the basis that the right to refer to it on any such question is
20
reserved.

(5)
Subsection (1) does not prevent the tribunal from taking account of a

determination made in any other proceedings between the employer and

the employee in which account was taken of an offer or discussions of the

kind mentioned in that subsection.”’.

As Amendments to Norman Lamb’s proposed New Clause (Confidentiality of

negotiations before termination of employment) (NC2):—

Mr Iain Wright

Ian Murray

Chi Onwurah

(a)

Line  7,  leave out ‘the employee’ and insert ‘, the employee or either one of the

following chosen employee representatives—

(a)
a trade union official;

(b)
a workplace representative; or

(c)
a legal representative.’.

Mr Iain Wright

Ian Murray

Chi Onwurah

(b)

Line  24,  at end add—

‘(6)
The Secretary of State shall review the operation of Clause 111A [Confidentiality

of negotiations before termination of employment] after 12 months and shall

confirm its continuation through an affirmative resolution of both Houses of

Parliament.’.

Public Bill Committee: 17 July 2012
207

Enterprise and Regulatory Reform Bill, continued

Payments to directors: members’ approval of directors’ remuneration policy

Norman Lamb

NC5

To move the following Clause:—

‘(1)
In section 421 of the Companies Act 2006 (contents of directors’ remuneration

report) after subsection (2) insert—

“(2A)
The regulations must provide that any information required to be

included in the report as to the policy of the company with
5
respect to the making of remuneration payments and payments

for loss of office (within the meaning of Chapter 4A of Part 10)

is to be set out in a separate part of the report.”

(2)
After section 422 of that Act (approval and signing of directors’ remuneration

report) insert—
10
“422A
Revisions to directors’ remuneration policy

(1)
The directors’ remuneration policy contained in a company’s directors’

remuneration report may be revised.

(2)
Any such revision must be approved by the board of directors.

(3)
The policy as so revised must be set out in a document signed on behalf
15
of the board by a director or the secretary of the company.

(4)
Regulations under section 421(1) may make provision as to—

(a)
the information that must be contained in a document setting out

a revised directors’ remuneration policy, and

(b)
how information is to be set out in the document.
20
(5)
Sections 422(2) and (3), 454, 456 and 463 apply in relation to such a

document as they apply in relation to a directors’ remuneration report.

(6)
In this section, “directors’ remuneration policy” means the policy of a

company with respect to the matters mentioned in section 421(2A).”

(3)
In section 439 of that Act (quoted companies: members’ approval of directors’
25
remuneration report), in subsection (1), at the end insert “other than the part

containing the directors’ remuneration policy (as to which see section 439A).”.

(4)
After that section insert—

“439A
Quoted companies: members’ approval of directors’ remuneration

policy
30
(1)
A quoted company must give notice of the intention to move, as an

ordinary resolution, a resolution approving the relevant directors’

remuneration policy—

(a)
at the accounts meeting held in the first financial year which

begins after the coming into force of section (Payments to
35
directors: members’ approval of directors’ remuneration policy)

of the Enterprise and Regulatory Reform Act 2012 or at an

earlier general meeting, and

(b)
at an accounts or other general meeting held no later than the end

of the period of three financial years beginning with the first
40
financial year after the last accounts or other general meeting in

relation to which notice is given under this subsection.

Public Bill Committee: 17 July 2012
208

Enterprise and Regulatory Reform Bill, continued

(2)
A quoted company must give notice of the intention to move at an

accounts meeting, as an ordinary resolution, a resolution approving the

relevant directors’ remuneration policy if—
45
(a)
a resolution required to be put to the vote under section 439 was

not passed at the last accounts meeting of the company, and

(b)
no notice under this section was given in relation to that meeting

or any other general meeting held before the next accounts

meeting.
50
(3)
A notice given under subsection (2) is to be treated as given under

subsection (1) for the purpose of determining the period within which the

next notice under subsection (1) must be given.

(4)
Notice of the intention to move a resolution to which this section applies

must be given, prior to the meeting in question, to the members of the
55
company entitled to be sent notice of the meeting.

(5)
Subsections (2) to (4) of section 439 apply for the purposes of a

resolution to which this section applies as they apply for the purposes of

a resolution to which section 439 applies, with the modification that, for

the purposes of a resolution relating to a general meeting other than an
60
accounts meeting, subsection (3) applies as if for “accounts meeting”

there were substituted “general meeting”.

(6)
For the purposes of this section, the relevant directors’ remuneration

policy is—

(a)
in a case where notice is given in relation to an accounts meeting,
65
the remuneration policy contained in the directors’ remuneration

report in respect of which a resolution under section 439 is

required to be put to the vote at that accounts meeting;

(b)
in a case where notice is given in relation to a general meeting

other than an accounts meeting—
70
(i)
the remuneration policy contained in the directors’

remuneration report in respect of which such a

resolution was required to be put to the vote at the last

accounts meeting to be held before that other general

meeting, or
75
(ii)
where that policy has been revised in accordance with

section 422A, the policy as so revised.

(7)
In this section—

(a)
“accounts meeting” means a general meeting of the company

before which the company’s annual accounts for a financial year
80
are to be laid;

(b)
“directors’ remuneration policy” means the policy of the

company with respect to the matters mentioned in section

421(2A).”.’.

Public Bill Committee: 17 July 2012
209

Enterprise and Regulatory Reform Bill, continued

As Amendments to Norman Lamb’s proposed New Clause (Payments to directors:

members’ approval of directors’ remuneration policy) (NC5):—

Mr Iain Wright

Ian Murray

Chi Onwurah

(a)

Line  7,  at end insert—

‘(2B)
The regulations must include information regarding the 10 highest paid

employees in the company outside of the board and executive committee”.’.

Mr Iain Wright

Ian Murray

Chi Onwurah

(b)

Leave out lines 33 to 41.

Mr Iain Wright

Ian Murray

Chi Onwurah

(c)

Leave out lines 42 to 52.

Mr Iain Wright

Ian Murray

Chi Onwurah

(d)

Leave out lines 56 to 61.

Mr Iain Wright

Ian Murray

Chi Onwurah

(e)

Leave out lines 68 to 76 and insert—

‘(6A)
The resolution under subsection (1) in respect of directors’ remuneration policy

must obtain the approval of 75 per cent. of members on the share register of the

quoted company.’.

Mr Iain Wright

Ian Murray

Chi Onwurah

(g)

Line  83,  at end add—

‘(5)
In section 412 of the Companies Act 2006 (Information about directors’ benefit:

remuneration), after subsection (2)(e) insert—

“(2)

(f)
disclosure of fees paid to recruitment consultants in respect of

recruitment consultancy work and non-recruitment consultancy

work for the company in the last year.”.’.

Public Bill Committee: 17 July 2012
210

Enterprise and Regulatory Reform Bill, continued

Mr Iain Wright

Ian Murray

Chi Onwurah

(i)


Line  83,  at end add—

‘(6)
The Secretary of State shall, within three months of the passing of this Act, make

provision by regulations under section 1277 of the Companies Act 2006 requiring

the provision of information about the exercise of voting rights in respect of

directors’ remuneration policy.’.

Mr Iain Wright

Ian Murray

Chi Onwurah

(j)


Line  83,  at end add—

‘(7)
After section 227 of the Companies Act 2006 (Directors’ service contracts), insert

the following new section—

“227A
Appointment of remuneration consultants of public company

(1)
Remuneration consultants may be appointed for each financial year of

the company.

(2)
For each financial year for which a remuneration consultant or

consultants is or are to be appointed (other than the company’s first

financial year), the appointment must be made before the end of the

accounts meeting of the company at which the company’s annual

accounts and reports for the previous financial year are laid.

(3)
The directors may appoint a remuneration consultant or consultants of

the company—

(a)
at any time before the company’s first accounts meeting;

(b)
to fill a casual vacancy in the office of remuneration consultant.

(4)
The members may appoint a remuneration consultant or consultants by

ordinary resolution—

(a)
at an accounts meeting;

(b)
if the company should have appointed a remuneration consultant

or consultants at an accounts meeting but failed to do so;

(c)
where the directors had power to appoint under subsection (3)

but have failed to make an appointment.

(5)
A remuneration consultant or consultants of a public company may only

be appointed in accordance with this section.

(6)
In this section a “remuneration consultant” means a person who is

appointed to advise on the terms of directors’ service contracts.”.’.

Public Bill Committee: 17 July 2012
211

Enterprise and Regulatory Reform Bill, continued

Payments to directors of quoted companies

Norman Lamb

NC6

To move the following Clause:—

‘After section 226 of the Companies Act 2006 insert—

“Chapter 4A

directors of quoted companies: special provision

Interpretation

226A
Key definitions

(1)
In this Chapter—

“directors’ remuneration policy” means the policy of a quoted company

with respect to the making of remuneration payments and payments for

loss of office;

“remuneration payment” means any form of payment or other benefit made

to or otherwise conferred on a person as consideration for the person

being, or agreeing to become, a director of a company, other than a

payment for loss of office;

“payment for loss of office” has the same meaning as in Chapter 4 of this

Part.

(2)
Subsection (3) applies where, in connection with a relevant transfer, a

director of a quoted company is—

(a)
to cease to hold office as director, or

(b)
to cease to be the holder of—

(i)
any other office or employment in connection with the

management of the affairs of the company, or

(ii)
any office (as director or otherwise) or employment in

connection with the management of the affairs of any

subsidiary undertaking of the company.

(3)
If in connection with the transfer—

(a)
the price to be paid to the director for any shares in the company

held by the director is in excess of the price which could at the

time have been obtained by other holders of like shares, or

(b)
any valuable consideration is given to the director by a person

other than the company,


the excess or, as the case may be, the money value of the consideration is

taken for the purposes of section 226C to have been a payment for loss of

office.

(4)
In subsection (2), “relevant transfer” means—

(a)
a transfer of the whole or any part of the undertaking or property

of the company or a subsidiary of the company;

(b)
a transfer of shares in the company, or in a subsidiary of the

company, resulting from a takeover bid.



© Parliamentary copyright	Revised 17 July 2012