Workers who receive a share of the profits from their workplace can solve the UK’s productivity problems, says Co-operative Party chairman Gareth Thomas.
The Labour/Co-operative MP has introduced a bill into the House of Commons which would give workers the right to receive a payout from employees.
Introducing the 10-minute rule bill, Mr Thomas said successful companies such as employee-owned John Lewis were already sharing profits with their employees and involving staff in decision-making. He argued this could help solve Britain’s productivity problem, which sees the country lagging behind the rest of the G7 states.
“Companies such as John Lewis share some of the profits they make with all their staff, giving the most junior as well as the most senior direct incentives to work even harder, think imaginatively and go the extra mile,” said the MP for Harrow West.
Mr Thomas explained how in France, firms with 50 or more employees benefited from up to 5% of profits being shared with all staff except recent arrivals.
“Companies in France can choose to distribute rewards, either as a flat rate to employees, in proportion to wages, in proportion to the hours worked in the previous year, or through a scheme based on a combination of those principles.
“Arguably, the prevalence of profit-sharing makes an important contribution to higher levels of productivity in France. Between 2010 and 2014, France had a level of productivity per hour almost double that of the UK,” he said.
Mr Thomas also gave the example of companies in countries like Denmark, France, Finland, Norway, Sweden and Germany where at least one director is elected by the employees. Similarly, in France private companies with 1,000 or more employees, or 5,000 or more if they are worldwide, must have at least one or two staff on the board, while a third of all board members for state-owned companies are elected by the staff.
“In short, if German, French and Swedish workers are good enough to sit on a company board, is not it time that British and English workers were given their chance, too?” he asked.
The Bill, which is supported by 11 other Labour/Co-op MPs, will be read for the second time in Parliament on 11 March. Most bills submitted under the ten-minute rule do not progress beyond a second reading.
Join the Conversation