Labour Shares

A Labour share is a share owned by a member who invests labour in the Company or Co-operative, entitling her or him to participate in governance and receive a share of the surplus. For the purposes of clarity, any person recognised in UK Employment law as a ‘worker’ will qualify for Labour Shares.

Labour Shares are defined in Clause 10(ii) as follows:

• Labour Shares: issued at par value to natural or legal persons who invest remunerated labour in proportion to their labour contribution; non-transferable; one vote per shareholder at General Meetings (except as defined in Clauses 23 and 24); 1p fixed preference dividend each; forfeited on holder's death, bankruptcy or insolvency; cancelled upon cessation of contracts to provide labour; cancelled without payment on winding up.

Like User Shares, the model rules suggest that a person should only be issued a Labour share if they have contracted to work continuously for more than 1 year. This prevents having to issue shares for short term contracts, and also permits the issue of shares to self-employed contractors and suppliers who enter into long-term supply relationships.

The number of Labour shares becomes important when surpluses are generated, as it determines both the share of surplus distributed as a cash dividend, and the number of Investor Shares (Member Shares) that are distributed to represent Labour Shareholders' ownership of the company's assets.