Implement an employee right to own
Co-operatise existing businesses to accelerate new models of ownership and increase the volume of the co-operative sector in the UK.
Scaling democratic, inclusive forms of ownership is crucial to achieving a step-change in the size of the co-operative economy. Without this, private capital will remain the privileged actor within the firm and growing returns to capital will increase inequality.
Two steps to democratise capital at scale are:
Promote co-operative or more democratic options at the point of business transition
A core strategy of a new Co-operative Development Agency should be to persuade business owners at the end of their careers to build greater democracy and take steps towards co-operatising the businesses they are seeking to pass on.
Introduce a right to own to support employee buyouts and the co-operatisation of existing business
New legislation should be introduced that would give employees a statutory ‘right to request’ employee ownership during business succession. To support this, an ‘early warning’ resource should be introduced, informing workforces in advance of insolvency or disposal of a viable business. There should be a variety of ways for employees to purchase part or all of a business including:
- Share capital purchases made via savings or redundancy payments.
- Advances of up to three years of their cash transfer-based and employer portions of their unemployment insurance benefits.
- Debt capital financing from either the co-operative fund within the National Investment Bank for large businesses, or co-op development funds for medium to small firms based on the projections of future revenue and/or collateral offered through the assets acquired from the target business.
Tags Democratic ownership
Policy in practice
Projects that demonstrate the benefits or may be helped by polices like this.
Suma, Europe’s largest equal-pay co-op, recently celebrated its 40th birthday.
Riverford switched to employee ownership to protect its values and independence in 2018.
Former owners sold leading signage company to its workforce.
Founder Julian Richer transferred 60% of his shares into a John Lewis-style trust.
This workers' co-operative connects local growers with businesses in the fightback against food poverty.
Equal Care Co-op
Co-op matches those seeking care with care workers and professionally trained volunteers.
Schools’ Energy Co-operative
Schools’ Energy Co-operative has installed solar panels on schools across the country, working with a network of local groups.
Founders of UK’s biggest animation company handed 75% share to employees to ‘safeguard independence’.
Space4 is a co-working space for social enterprises and worker co-operatives in the digital tech sector.
YnNi Teg develops and builds renewable energy generators in Wales, funded by community shares.