House of Commons Amendments

Session 2012 - 13
Internet Publications
Other Bills before Parliament

Public Bill Committee: 28 June 2012
57

Enterprise and Regulatory Reform Bill, continued

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—

“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

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

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

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

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.”’.

Public Bill Committee: 28 June 2012
58

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

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—

“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

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.

(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’

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

(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

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

financial year after the last accounts or other general meeting in

relation to which notice is given under this subsection.

Public Bill Committee: 28 June 2012
59

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—

(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.

(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

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

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,

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—

(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

(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

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: 28 June 2012
60

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.

Public Bill Committee: 28 June 2012
61

Enterprise and Regulatory Reform Bill, continued

(5)
References in this Chapter to the making of a remuneration payment or

to the making of a payment for loss of office are to be read in accordance

with this section.

(6)
References in this Chapter to a payment by a company include a payment

by another person at the direction of, or on behalf of, the company.

(7)
References in this Chapter to a payment to a person (“B”) who is, has

been or is to be a director of a company include—

(a)
a payment to a person connected with B, or

(b)
a payment to a person at the direction of, or for the benefit of, B

or a person connected with B.

(8)
Section 252 applies for the purposes of determining whether a person is

connected with a person who has been, or is to be, a director of a

company as it applies for the purposes of determining whether a person

is connected with a director.

(9)
References in this Chapter to a director include a shadow director but

references to loss of office as a director do not include loss of a person’s

status as a shadow director.

Restrictions relating to remuneration or loss of office payments

226B
Remuneration payments

(1)
A quoted company may not make a remuneration payment to a person

who is, or is to be, a director of the company unless—

(a)
the payment is consistent with the approved directors’

remuneration policy, or

(b)
the payment is approved by resolution of the members of the

company.

(2)
The approved directors’ remuneration policy is the most recent

remuneration policy to have been approved by a resolution passed by the

members of the company in general meeting.

226C
Loss of office payments

(1)
No payment for loss of office may be made by any person to a person

who is, or has been, a director of a quoted company unless—

(a)
the payment is consistent with the approved directors’

remuneration policy, or

(b)
the payment is approved by resolution of the members of the

company.

(2)
The approved directors’ remuneration policy is the most recent

remuneration policy to have been approved by a resolution passed by the

members of the company in general meeting.

226D
Sections 226B and 226C: supplementary

(1)
A resolution approving a payment for the purposes of section 226B(1)(b)

or 226C(1)(b) must not be passed unless a memorandum setting out

particulars of the proposed payment (including its amount) is made

available for inspection by the members of the company—

Public Bill Committee: 28 June 2012
62

Enterprise and Regulatory Reform Bill, continued

(a)
at the company’s registered office for not less than 15 days

ending with the date of the meeting at which the resolution is to

be considered, and

(b)
at that meeting itself.

(2)
The memorandum must explain the ways in which the payment is

inconsistent with the approved directors’ remuneration policy (within the

meaning of the section in question).

(3)
The company must ensure that the memorandum is made available on the

company’s website from the first day on which the memorandum is made

available for inspection under subsection (1) until its next accounts

meeting.

(4)
Failure to comply with subsection (3) does not affect the validity of the

meeting at which a resolution is passed approving a payment to which the

memorandum relates or the validity of anything done at the meeting.

(5)
Nothing in section 226B or 226C authorises the making of a

remuneration payment or payment for loss of office in contravention of

the articles of the company concerned.

(6)
In this section the “company’s website” is the website on which the

company makes material available under section 430.

226E
Payments made without approval: civil consequences

(1)
An obligation (however arising) to make a payment which would be in

contravention of section 226B or 226C has no effect.

(2)
Subject to subsections (3) and (4), if a payment is made in contravention

of section 226B or 226C—

(a)
it is held by the recipient on trust for the company or other person

making the payment, and

(b)
in the case of a payment by a company, any director who

authorised the payment is jointly and severally liable to

indemnify the company that made the payment for any loss

resulting from it.

(3)
If a payment for loss of office is made in contravention of section 226C

to a director of a quoted company in connection with the transfer of the

whole or any part of the undertaking or property of the company or a

subsidiary of the company, it is held by the recipient on trust for the

company whose undertaking or property is or is proposed to be

transferred.

(4)
If a payment for loss of office is made in contravention of section 226C

to a director of a quoted company in connection with a transfer of shares

in the company, or in a subsidiary of the company, resulting from a

takeover bid—

(a)
it is held by the recipient on trust for persons who have sold their

shares as a result of the offer made, and

(b)
the expenses incurred by the recipient in distributing that sum

amongst those persons shall be borne by the recipient and not

retained out of that sum.



© Parliamentary copyright	Revised 28 June 2012