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Session 2012 - 13
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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

 

Parliamentary Star    

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

 

Parliamentary Star    

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.


 
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Revised 28 June 2012