When you are negotiating a pay round it is useful to have some information about your employer’s ability to pay. Unite’s Pay Claim Generator (PCG) will now get key figures from company accounts for you and incorporate them into a pay claim. If you work for a company in the UK the Employer Profile Generator (EPG) can also tell you who the parent company is and lots of other useful information.
However, if you are part of a group of companies you may want to dig further. By looking at the accounts in detail you can get a better idea of what is going on in your subsidiary, the parent and everything between. However, this can mean combing through a complex web of different entities. It is also important to remember that the accounts can’t answer all the questions that will come up. That’s where disclosure of information for collective bargaining comes in (see Acas Code of Practice on Disclosure of Information to Trade Unions for Collective Bargaining Purposes: http://www.acas.org.uk/media/pdf/2/q/CP02_1.pdf)
For example, you may find not only Limited Companies (ending Ltd) but Limited Liability Partnerships (LLPs) in the group structure. These LLPs were really designed for firms made up of individuals, like GPs or legal practices. However, they can also be owned partly or entirely by companies. LLPs can have tax advantages for corporations or individuals. This is especially the case if the partners are registered in tax havens, as it makes it easier to shift profits out of the country. You may remember a scheme like this called Eclipse Film Partners (No 35) LLP with investors including Sir Alex Ferguson, the retired Manchester United manager, and Sven-Goran Eriksson, the former England football manager. However, just because you find an LLP in your corporate structure doesn’t mean your employer is avoiding tax – it just means that it is a question worth asking.
Here is a list of key questions that you might want to ask if you are taking a more advanced look at your group’s ability to pay:
- Does the ownership structure of my employer include a limited liability partnership – and if so why?
- What dividends have been paid out of my subsidiary and where do they go?
- Does my subsidiary lend to or borrow money from other parts of the group?
- Does the ‘cost of sales’ include charges from other parts of the group?
- Does the way that money moves around in the group affect the amount of money that my employer claims is available to pay wages (e.g. declared profits)?
If you have found anything out of the ordinary when analysing your own company’s accounts, please let me know.
Sharon Graham Mobile: 07976 844228 Email: email@example.com