Growth and Infrastructure Bill

Memorandum submitted by Scott Bader Ltd (GIB 75)

I refer to the above Bill and in particular to the new legislation which proposes ' a new employment status' employee owner'. I am e-mailing on behalf of Scott Bader to strongly register our objection to this Bill where employee ownership or other similar forms of ownership structure being perceived as a model in which workers rights on redundancy and unfair dismissal are removed return for tax breaks.

Scott Bader was founded in 1921 by Ernest Bader. In 1951 the company was gifted to the workers when the shares of the chemical manufacturing company were transferred to the Scott Bader Commonwealth Limited (‘the Commonwealth’) a Company Limited by guarantee and a Registered Charity.

Scott Bader employees can become "Commonwealth Members" making them trustees-in-common of the company assets. The well being of the organisation is entrusted to those who work in it, with democratic involvement. Each generation is charged with handing on the company to future generations in better condition than they inherited it.

When this unique organisation was created it was the intention of the founder to give the workforce greater rights not less. Long before the development of the rights of employees that exist today in relation to redundancy and dismissal Scott Bader had a representative body known as the Community Council who had the power (and still does) of being the final arbiter in appeals relating to such things as redundancy; dismissal and grievances.

Scott Bader is now an international company with 600 people worldwide and has an international representative body known as the Members' Assembly to represent the interest of members worldwide. One of the Rules of the Assembly is that it has to approve

‘the decisions and the process for the disposal of businesses and assets that employ people who cannot be re-deployed or who would be made redundant, in accordance with group policies and in particular to be satisfied with the intended arrangements for individuals

In the Constitution of Scott Bader it states


i)In the event of a downturn in trade we will consider whether circumstances make it desirable or practical to share all remaining work rather than expect any of our fellow members to be deprived of employment, even if this requires a reduction in earnings.

(ii)However, should a study of our business reveal that it would be in its best interest to reduce or eliminate certain jobs, we will do this in the fairest and most objective way. In particular we will wherever possible offer alternative work.

In practice where the possibility of people losing their jobs is being discussed, the minimum requirement in relation to Clause G is that the following should happen Gi – the consultation should be:

(a) the Members Assembly i.e. what and where followed by

(b) local councils i.e. how and when

Gii –the consultation should be:

(a) senior managers of local businesses i.e. what and where followed by

(b) local councils i.e. how and when

Local representative bodies now exist in the UK, Croatia, France, South Arica and Dubai.

During the lifetime of the organisation we have had to make people redundant and giving them greater rights has not affected the sustainability of the organisation, quite the opposite in fact. When the need has arisen it is the workforce that has understood the reasons why and been involved in how the redundancy programmes would be handled.

We therefore urge you to change the Bill and not to mislead people about what the employee owner/trusteeship sector is all about. Indeed you might do well to learn more about it and take greater notice of what is contained in the Nuttall Review.

December 2012

Prepared 10th December 2012