Employee Ownership and Social Inclusion

This article by the Australian Employee Ownership Association talks about the role that employee ownership will play in the newly elected Federal Government's developing social inclusion agenda.

Employee Ownership and Social Inclusion, January, 2008

With the recent election of an ALP Federal Government, the Hon Julia Gillard MP has been appointed both Minister for Employment and Workplace Relations and Minister for Social Inclusion.

The social inclusion agenda is a new one for Australia . In other nations, it is much more advanced. Social inclusion initiatives provide major opportunities for employee ownership. The UK “Social Enterprise of the Year, 2006” was the wholly employee owned “Sunderland Home Care Associates” (a private company owned by an ESOP trust) 

The employee ownership opportunity within the social inclusion agenda is highlighted within the “Foreword” by the Rt Hon. Hilary Armstrong, MP, UK Minister for Social Inclusion to the recently released report on Sunderland Home Care Associates: “Caring and Sharing: The Co-owned Route to Better Care”, by David Wheatcroft. This report was published by the Employee Ownership Association UK in October, 2007. 

The following statements by the new Australian Minister for Social Inclusion, Julia Gillard - from a speech entitled "The Economics of Social Inclusion" - provide further evidence that employee ownership will have a major role to play in the Government's developing social inclusion agenda.

"The concept of social inclusion in essence means replacing a welfarist approach to helping the underprivileged with one of investing in them and their communities to bring them into the mainstream market economy. It’s a modern and fresh approach that views everyone as a potential wealth creator and invests in their human capital.

Including everyone in the economic, wealth-creating life of the nation is today the best way for Labor to meet its twin goals of raising national prosperity and creating a fair and decent society. This is a recognized policy ambition of social democratic parties around the world today.

Fairer workplace laws that encourage enterprise bargaining and cooperation will help create a fairer and wealthier society, but on their own they are not enough. We need a new approach to social and economic policy too. And social inclusion is it ".

To further reinforce this point, the following is an extract from the Sunderland Home Care Associates report (page 5) mentioned above which clearly indicates that Australian policy makers need to be taking seriously the role that employee ownership can play in one of the major election commitments of the new Government:

The policy implications

One week in October 2006 provided a snapshot of why Sunderland Home Care’s (SHC) success should matter to policy makers. On 18 October 2006 , the media reported disturbing findings on elderly home care by the Commission for Social Care Inspection. Its ‘Time to Care’ report heavily criticised the standards of home care experienced by hundreds of thousands of older people. “There are problems of recruiting, retaining and training good quality staff” said the CCSI’s chief inspector, Paul Snell.

Exactly one week later, SHC founder Margaret Elliott was picking up the top prize and overall award – as the UK’s outstanding social enterprise - in the Social Enterprise Coalition’s Enterprising Solutions Awards, sponsored by the DTI, NatWest and Royal Bank of Scotland.

One aim of this paper is to explain why and how SHC manages to provide a standard of care that seems to elude so much of the elder care sector. A lot of that explanation is to do with SHC’s co-owned status – staff own the company, they take decisions together and they feel more part of and proud of the enterprise than counterparts in companies where there’s no staff stake or say."

See more on "Private Company ESOPs".

Source:  Australian Employee Ownership Association

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Contact	:	AEOA
Phone	:	+61 2 4341 5170
Email	:	secretary@aeoa.org.au

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