Solutions

Implement an employee right to own

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.