Growth and Infrastructure

Memorandum submitted by Jacqui Mitchell (GIB 64)

Dear Sir/Madam,

I work as a consultant specialising in employee ownership and over the past few years I have worked with a number of companies who have transitioned to majority employee ownership. In most of these cases the owners have chosen employee ownership as an exit route for reasons such as loyalty to their employees, a recognition that they have contributed to the success of the business and therefore should be given an opportunity to take the business forward and share in the rewards and/or a wish to leave a legacy.

I believe that the concept of an "employee owner" being someone who has to give up some of their employment rights does nothing to further the cause. Indeed I recently ran some employee workshops at a manufacturing business which is currently moving to employee ownership and many of the employees were voicing concerns about this and thinking that if they agreed to take the free shares that will be offered to all qualifying employees once the company makes this move then they would be signing away their rights to redundancy. This company is a family business and the key reason for choosing this as an exit option was to ensure that the company continues to offer employment in the local area. The free shares which will be distributed on completion should have been considered a nice thankyou for the contribution of the workforce to date and not be eyed with any suspicion. If the workforce view the concept of employee ownership with suspicion then the resulting benefits such as increased productivity and higher innovation levels will not occur.

I would therefore request that there is no requirement for "employee owners" to exchange any of their employment rights for shares.

December 2012

Prepared 10th December 2012