Re: HOMESTEAD: Do trusts make workers second class owners?

[Shann Turnbull <sturnbull@mba1963.hbs.edu>]

I would also be concerned if direct ownership allowed workers to obtain 
rights without sharing collective obligations to the business and not sell 
out without due process in either private or publicly held firms.

Arrangements for introducing due process should be possible in either 
private or publicly traded firms.
In Australia, shares can be placed in a "sub register" for publicly traded 
firms which can put a lock on transfers.  This is required by the stock 
exchange rules when promoters take up new share issues and the exchange 
prohibits them selling without first informing the public after a given 
period.  I am advised that this arrangement can also be used for employee 
share plans and if countries did not have such an arrangement I see no 
reason why it could not be designed in the share plan arrangement.

Can anybody proved the exact form of words that the US legislation uses to 
require votes to be passed through trusts?  There is often many devils in 
the detail.  As pointed out in my article posted earlier it is not feasible 
in Australia for all ownership rights to pass through and the integrity of 
the pass through can be problematic.

Regards

Shann


At 07:24 AM 2/8/2001, you wrote:
>I have just a few comments on this subject which relate to my understanding
>of our, that is the United Steelworkers' experience with trustees and our
>ESOPs.  There are others who could articulate the issues involved in this
>more clearly and more accurately, but it is an interesting issue an I would
>like to say a little about it.
>
>Our intention from the beginning, leaving aside West Bend Lathe, was that
>worker ownership should be real, employees should have membership on the
>board and should have voting rights, should be fully reported to by the
>management in terms of the business, should have access through collective
>bargaining as well, in terms of maintaining the rights of worker-owners.
>
>This emphasis on worker owner rights or empowerment picked up momentum and
>intensity during the years when we were most active in employee ownership.
>The package of employee rights became the sine qua non of the Steelworkers'
>initiatives in this field.
>
>My understanding is that the law has improved in the U.S., so that much that
>we required in terms of pass through voting rights is now contained in the
>law.
>
>I am not arguing against Shaun's concerns so much as commenting.  One of the
>downsides it seems to me of a more traditional, individual type of stock
>ownership is that it paves the way to employees simply selling their stock
>and bringing worker-ownership to an abrupt halt, as happened so frequently,
>as I understand it, in eastern Europe to the brave new schemes undertaken in
>the glow of the falling wall.
>
>All of our systems are of course the result of applicable laws.  Of course
>it's not impossible to change them, but change doesn't come easily, in
>America partcularly, so that there is a great deal of effort, activity and
>imagination devoted to ensuring that existing laws ae administered as fairly
>as possible.

Shann Turnbull  Ph.D.
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