My hon. Friend may well be right. He is certainly more expert than I am at understanding parliamentary Bills and the language therein. His definition may well be right. I should certainly be grateful if the Minister and my hon. Friend the Member for Huntingdon expressed their understanding. When the hon. Member for Nottingham, East winds up, perhaps he will clarify the point and say how he understands the position.
The Bill would make the information and consultation obligations that apply to business sales apply to equity transfers, too. Vendor and purchaser of the substantial shareholding would be required to inform and consult employee representatives about any measures that are proposed relating to the acquisition. More onerously than in the context of a business sale, the Bill requires employees to be given information on the five-year period following the acquisition concerning the structure, the economic and financial situation of the vendor, the purchaser, the employing entity, the probable development of the employer's business, the probable development of production and sales, and probable trends in investment, employment, organisational changes, working and production methods, mergers, cuts, closures and redundancies.
Employers may be particularly interested in all those things, but it is difficult to know whether it would be fair to make a business provide all that information. It may not know those things itself. In my experience, the most successful businesses are those that communicate best with their employees anyway. I am not entirely sure that a successful business needs to be told to keep its staff informed of any developments; most of them already do that.
According to the Bill, training and assistance must be provided to employee representatives, so that they can deal with and respond to information provided as part of the consultation exercise. It is important to consider the penalties that may apply to businesses that do not follow the provisions in the Bill. Failure to comply with the consultation regulations would give employees or their representatives, including trade union representatives, the right to apply to court for an order seeking compliance. The court would have the power to prevent the share sale until the consultation obligations had been satisfied. Those obligations are rather too onerous for the market. They could well act as a deterrent to those who want to invest in companies. As I have made clear, the aim in some investments is to shore up a company that is under threat, and not just to take it over. The provision could therefore undermine the rights of workers and give them less confidence; I am sure that that would be an unintended consequence.
I think that I am right in saying—the hon. Member for Nottingham, East, might be able to help me on this point—that the Bill provides that no changes may be made to the terms and conditions of employment of employees in connection with the share acquisition, unless there is an economic, technical or organisational reason to do so.
Private Equity (Transfer of Undertakings and Protection of Employment) Bill
Proceeding contribution from
Philip Davies
(Conservative)
in the House of Commons on Friday, 7 March 2008.
It occurred during Debate on bills on Private Equity (Transfer of Undertakings and Protection of Employment) Bill.
Type
Proceeding contribution
Reference
472 c2055-6;472 c2053-4
Session
2007-08
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House of Commons chamber
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