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Views were sought on the measures recommended in the Nuttall review to raise awareness of employee ownership.
Responses were required by 7 September 2012. Evidence collected during this process will be considered as a part of developing the formal government response to the Nuttall review.
The Nuttall review of employee ownership identified a lack of awareness as the ‘fundamental’ barrier to increasing the uptake of employee ownership in the economy.
Building on several recommendations to build wider awareness and to promote the concept of employee ownership, the review makes three recommendations around the idea of a ‘right to request’ employee ownership:
Recommendation K (page 44)
The Department for Business, Innovation and Skills (BIS), working with ACAS, should encourage employer and employee groups (including trades unions) to develop a voluntary code of practice setting out best practice on requesting and agreeing employee ownership in a company. In parallel BIS should consider what further role government has in providing statutory support, through recommendations L and M.
Recommendation L (page 44)
BIS should issue a call for evidence on the introduction of a statutory right to request consideration of an employee ownership proposal, covering the issues and challenges covered in table 5.
Recommendation M (page 45)
BIS should issue a call for evidence on the best means to encourage owners and employers to make information available to employees, if a change of control of a company or sale of the business in which employees work is envisaged, in order to allow employees to consider an employee buy out.
Improving information exchange between employees and their employers and a statutory right to request employee ownership
The Nuttall review recommends that government considers statutory and non-statutory options for a right to request employee ownership. It sets out a number of key questions aimed at guiding the government’s response to the review. This call for evidence seeks perspectives on those questions, including views on the name ‘right to request’, to inform the development of the government’s response.
A. Is a statutory approach best to encourage discussion between employees and their employers, or are there other mechanisms?
The Nuttall review sets out the importance of encouraging discussion and information exchange between employees and their employers as well as the proposal to consider a right to request.
- what evidence is there of companies ignoring requests from employees to consider employee ownership?
- would a statutory ‘Right’ embolden more employees to make requests they wouldn’t otherwise?
- would improved guidance facilitate more discussion?
- what information and guidance would support employers make decisions on employee ownership for their company?
B. Who can receive a request and what should the request cover?
The Nuttall review recommends that any right to request employee ownership should be focused on private companies alongside the ‘right to provide’ in the public sector, and employees should be left a broad scope as to what they can request.
- how should a right to request be distinguished from the right to provide for public service mutuals?
- how could groups of employees develop an employee ownership proposal to put to their employers and what would be the most effective way of organising this process?
- to what extent do employees already have opportunity to put employee ownership proposals to their employers?
- should the request be limited to those that give all employees an opportunity to participate?
C. What is the employer required to do?
The Nuttall review concludes that a statutory right to request could provide a greater ‘nudge’ to ensure that employee ownership is more often discussed in business contexts. It also recommends that regulatory burdens to employers are minimised, and that any statutory duty on employers should be limited to showing reasonable consideration of the request.
- what might constitute ‘reasonable consideration’ on behalf of an employer?
- should there be a different approach depending on the size of company and should companies below a particular size be exempt?
- what are the most effective means for employers and employees to discuss and share information on employee ownership solutions for the company they work in?
- what are the pitfalls that could make this a confrontational process and how can that be avoided?
D. What would be the grounds for turning down a request?
The Nuttall review states that the grounds for turning down a request should be drawn broadly to avoid unnecessary burdens on business, and that simply stating the reason for turning down a request should be sufficient for compliance.
- would a prescribed list of eligible reasons to turn down a request provide employers more certainty into how they could comply?
- how would government avoid a right to request becoming something that is paid lip service to and no more?
E. Who should be eligible to make a request?
The Nuttall review recommends a minimum requirement for a) the proportion of employees in a company and b) the length of time they serve before a request can be made.
- what minimum requirements would ensure frivolous requests are minimised and that they have broad support amongst the staff?
- are there measures Government or others can take to avoid unproductive and unhelpful discussions, including examples from other contexts?
F. How should a right to request be introduced?
The Nuttall review recommends that government considers how introducing the right to request is phased to ensure effective implementation, for example limiting it by company size, or making it applicable to specific stages of the business lifecycle.
- what resources would companies need to comply with a right to request?
- would making the right to request applicable only at specific points in the business lifecycle (for example, when change of ownership is envisaged):
- make it more meaningful and reduce compliance costs
- provide sufficient opportunities to encourage discussion of employee ownership in a company?
More information on the employee ownership.