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• Unite: Supersizing councils could see service users lose out
• Unite: reform City laws or there will be more takeovers like Cadbury’s
• Staff at South London and Maudsley NHS trust balloted for industrial action
• Wave of demonstrations across UK and Europe as Coca-Cola Enterprises prepares to cut jobs and pay
• Audit Commission report on social care budgets points way to ‘toxic cocktail’, says Unite
• Con-Dems raze public services to the ground

Unite: reform City laws or there will be more takeovers like Cadbury’s

25 October 2010

The reform of UK boardroom behaviour is long overdue, Unite the union said today (Monday), as business secretary Vince Cable announced plans to investigate City operations.

Cadbury could today still be a British company if City short-termism and the failures of UK takeover policy had been tackled earlier, said Jennie Formby, Unite's national officer for food and drink: "The rules around how companies conduct themselves during takeovers must be tightened.  We cannot have companies mounting a takeover bid on a false prospectus as Kraft did with Cadbury when it promised to save a plant and jobs when it knew it had not the slightest intention of doing so.

"Shareholders found it too easy to ditch their responsibility to the workforce and the company - and it will happen again unless the government builds in conditions to prevent short-termism.

"If we had laws in place which put the stability of UK business before the fast buck mentality of the City then we could still claim Cadbury as a great British success story.  Given that we have lost Cadbury, then at the very least there must be a Cadbury's Law to stop the continued destabilisation of British business.

"Unite will contribute to this review.  It is vital that the millions of workers who are forced to be voiceless during takeovers are heard now by the minister."

Unite fought to prevent Kraft, a debt-laden multi-national, from successfully pursuing its hostile takeover of Cadbury earlier this year but failed when shareholders accepted the bidder's offer.  The union is also pressing for workers to be given full information on a bidders' business plan and guarantees over their futures as among the basic conditions to ensure security during takeovers.

Last week, Unite criticised the Takeover Panel for failing to make more robust recommendations on reforming boardroom behaviour including:

• Establishment of a Takeover and Mergers Commission to police all takeovers
• Workers to have the right to be informed about plans and be properly consulted about those plans, with rights to then negotiate guarantees around their futures
• Requiring the bidding company to be totally transparent about its intentions and finances
• Requiring shareholders to have a long-term investment before they can contemplate selling shares in a company
• Government taking back the power to be able to intervene in takeovers of companies that impact on the national interest. 

Unite has also been campaigning for action on executive pay, particularly with workers being told to accept below inflation pay deals during a time of austerity yet board earnings continue to rise.

ENDS

For further information, please contact Pauline Doyle on 07976 832 861