What is Employee Ownership?
Employee Ownership (EO), in its simplest form, is a structure where the business is owned, either directly or indirectly, by its employees. EO is becoming more popular every year, there are many models of the system in use but all work on the same basic premise.
Perhaps the most well-known Employee Owned company is the John Lewis Partnership. JLP have a Trust which holds the shares on behalf of the employees so no employee actually owns shares in their own right. Union is different, we operate a hybrid system when some shares are held directly by employees but the majority of the shares are held in an Employee Benefit Trust.
In any business the shareholders have a say in the running of the company. Union have an Employee Council which ensures the concerns of the employees are listened to. The council meets monthly and has the ability to call in the Managing Director to discuss anything they wish.
Like all shareholders, Union employees have regular updates on the company’s performance, both financially and operationally. A monthly newsletter, The Grapevine, is delivered to all employees and a financial update meeting is held across the whole company every quarter.
At the end of each financial year the Board review the performance of the company and can, under current legislation, authorise a tax free bonus payment to all employees if they feel it is prudent to do so. In addition to the Bonus the Board can also declare a dividend to the shareholders.
When employees leave, or retire, they can sell their shares back to the company.
Union Industries have a Board of Directors who are charged with running the company, setting strategy and ensuring the continued financial health of the business. Every three years each Director must stand for re-election by the shareholders – the employees – and this ensures that the wellbeing of the employees is at the heart of every decision.
The Employee Ownership Trust, who are the majority shareholder, are also charged with holding the Board to account. The Trust meets three times per year to discuss the health of the company, both in terms of the financial and cultural perspective. There are both employee and independent Trustees on the Trust Board to ensure there is a balance of experience of both Union Industries and the wider business community.
Does it work?
It certainly seems so! Union Industries became Employee Owned on 27th November 2014 when the former owners, Mr & Mrs ‘S’, sold their shares to the Union Industries Employee Ownership Trust. This followed 40 years of hard work building the company from nothing, in the early 1970’s, to the country’s best Industrial Door manufacturer. The transition was followed by a big party to celebrate the occasion, in true Union style. Employee Ownership is about celebrating the past as well as the future and is the best possible foundation to maintain, and improve upon, a successful business.
Since transition to EO our employees tell us there is a greater sense of ownership, purpose, shared value and team working. They also say it’s a great place to work!
Here's what the local newspaper had to say about Union Industries becoming Employee Owned - YEP article
And here's a video of the EO Celebration Day here in Leeds!
More information on Employee Ownership can be found here