Public Limited Companies (Employee Involvement) (Hansard, 2 April 1985)

§ 9. Mr. Bruce
asked the Secretary of State for Employment what steps he is taking to monitor the operation of section 1 of the Employment Act 1982 requiring public limited companies to include employee involvement statements in their annual reports.

§ Mr. Peter Bottomley
The Department has been analysing reports from a large number of companies. I shall report the outcome to the House. Some reports seen so far are disappointing, but many bear out recent research evidence that employee involvement arrangements in companies are varied and widespread.

§ Mr. Bruce
In view of the mixed reaction so far to the Government's analysis, will the Minister tell the House what steps the Government propose to take to ensure that companies comply with the terms of the Act, and whether they propose to make a statement on employee involvement?

§ Mr. Bottomley
The hon. Gentleman will have to wait until the first analysis is published by the Government. Other institutions are also carrying out analyses. However, I can help the hon. Gentleman, and the companies, by saying that the aim of section 1 is to make sure that employees systematically get information that is of concern to them, that they or their representatives are consulted on a regular basis, that employee involvement is encouraged by employee share schemes or by other means and to achieve a common awareness on the part of 1054 all employees of the financial and economic factors affecting the performance of the company. Any company that believes it does not need such involvement needs to think again.

§ Mr. Janner
If the Minister accepts the principle that industrial democracy is necessary for this country, and if it is recognised that section 1 of the Act is hopelessly inadequate, do the Government intend to continue to block the draft fifth directive of the European Community?

§ Mr. Bottomley
The hon. and learned Gentleman will know that the Government are opposed in principle to inflexible prescriptive legislation on employee involvement. We are very much in favour of employee involvement and workplace participation, but we believe that it can be better achieved by means of voluntary, varied arrangements.

§ Mr. Penhaligon
May I remind the House that the amendment to this Act was forced upon the Government by an alliance Member of the House of Lords? Our impression is that the Government's heart is not in this matter, in that they are merely making inquiries and are not demanding that companies fulfil the legislation that was passed by this House.

§ Mr. Bottomley
The whole House acknowledges, I believe, the debt that it owes to Lord Rochester for pushing this forward and will also acknowledge that the Government have taken it on board. My role, and my keen interest, is to foster employee involvement so that companies prosper, employees share in that prosperity and more people who at present are out of work come into work.