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Community momentum gathering for private equity to be honest with employees-UK bill read tomorrow

The second reading of a bill requiring private equity owned companies to be more transparent with their employees will be heard in the UK House of Commons 7 March 2008. Private equity firms are being asked to follow the same rules that public companies are subject to, which is to declare their operational intentions for the company to employees. UNITE the UNION in alliance with GMB and the TUC are strongly supporting the bill named the Private Equity (Transfer of Undertakings and Protection of Employment) bill and referred to as the Private Equity TUPE. UNI Global Union welcomes and supports the initiative of its affiliates UNITE and the GMB which working with the TUC are making this important legal change.



Lack of transparency in private equity dealings is one of the concerns that Philip Jennings, General Secretary of UNI Global Union has been bringing to public attention. UNI has been advocating to private equity companies across the world to adopt eleven Global Principles which include embracing genuine transparency with employees. The UNI principal’s state:



“Where a private equity firm is buying a company, existing union recognition must continue. Such union or unions must be consulted and be able to negotiate the terms of the workers’ participation in the deal and its effects.

Such consultations and negotiations should take place, whenever possible, prior to the deal being announced, but in every case prior to the deal being closed. The private equity firm will provide the union with details of the business plan for the company, including equity and debt levels, investment plans, earnings expectations, risks, and other information necessary for the union to be an informed negotiating partner with the company and its new owners.”



http://www.uniglobalunion.org/Unisite/In_Depth/PrivateEquity/pdf/PrivateEquitPrinciples-en.pdf



In the UK there are regulations that protect the rights of employees when the company changes hands- the so called TUPE rules. However when private equity buys up the shares, workers are not protected. The private equity business model skilfully exploits loopholes in tax corporate governance regulations. This bill aims to plug that gap.



‘Shine a Light on Private Equity’ campaign document