Employment Act 1982

Employee involvement

1 Employee involvement

(1) Section 16 of the Companies Act 1967 (additional matters of general nature to be dealt with in directors' report) is amended as follows.

(2) In subsection (1), the following paragraph is added at the end—

“(h) in the case of relevant companies, contain a statement describing the action that has been taken during the financial year to introduce, maintain or develop arrangements aimed at—

(i) providing employees systematically with information on matters of concern to them as employees,

(ii) consulting employees or their representatives on a regular basis so that the views of employees can be taken into account in making decisions which are likely to affect their interests,

(iii) encouraging the involvement of employees in the company's performance through an employees' share scheme or by some other means,

(iv) achieving a common awareness on the part of all employees of the financial and economic factors affecting the performance of the company.”

(3) After subsection (1) there is inserted the following subsection—

“(1A) For the purposes of subsection (1)(h) above, a company is a " relevant company " if the average number of persons employed by it in each week during the financial year exceeds 250; and for the purposes of this subsection the number of persons employed shall be the quotient derived by dividing by the number of weeks in the financial year the number derived by ascertaining, in relation to each of those weeks, the number of persons who, under contracts of service, were employed in the week (whether throughout it or not) by the company and adding up the numbers ascertained.”

(4) After subsection (7) there is inserted the following subsection—

“(8) In subsection (1)(h) above " employee " does not include a person employed to work wholly or mainly outside the United Kingdom ; and for the purposes of subsection (1A) above no regard shall be had to such a person.”