Expenses, Benefits and Pay
All staff providing labour will be paid reasonable expenses. A schedule of acceptable expenses can be agreed by all members in General Meeting.
Remmuneration (Pay) is made up by: a) wages; b) labour share dividends; c) investor share dividends. The rules support arrangements based on employment contracts or contracts for services. Members can agree to receive their income solely through dividends on Labour and Investor Shares. Following the Mondragon Cooperative Model, staff receive a monthly advance of their share of profits. Under this arrangement, monthly advances on dividends are paid each month to provide members with a regular income, and are adjusted (up or down) in light of changing business performance.
All shareholders (including employees) receive dividend payments if the company creates a Surplus at the end of each financial year. Dividends are propotional to shareholdings and are paid in the manner set out in the rules. In a worker co-operative or employee-owned social enterprise Labour Shareholders and Investor Shareholders receive an equal proportion of any surplus (by default).
Following the outstandingly successful model used in the Mondragon Cooperative Corporation, a ratio for the maximum acceptable difference between the highest and lowest paid member of staff is set in the rules (by default this is 3:1). The hourly rate for the highest paid member of staff cannot be more than 3 times the hourly rate for the lowest paid member without a Class Resolution of Labour Shareholders approving the change. At Mondragon, larger cooperatives (those with several hundred / over 1,000 members) have sometimes adjusted the ratio to 6:1 to attracted highly skilled / professional staff. None, however, have extended the ratio beyond 6:1 since the largest cooperative (in a vote supported by over 80% of its 4,500 members) affirmed its commited to the 6:1 ratio. The current average ratio is 5:1.
Return me to the FairShares Articles of Association.
