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Employee Ownership Matters

Employee Ownership Australia and New Zealand is committed to broad based employee-ownership, engagement and participation - making it your business.


    Angela Perry, LLB, MAICD

Welcome to our rebadged newsletter – Employee Ownership Matters. It has taken a little longer to get this one out as we have been doing some thinking about how we communicate and engage with members, supporters – and importantly potential supporters and prospective members!

In our last newsletter we reported on a new wave of young entrepreneurs who are beginning to embrace the employee-ownership advantage (CultureAmp in BRW). Herbert Smith Freehills partner Peter Dunne has done some great work here and we hope to bring you more information about this initiative and similar groundbreaking activity from across Australia and New Zealand.

If you follow us on Twitter (@EOwnership) you will note a steady increase of interest in employee-ownership globally. Sometimes we take a bit longer to catch on in this part of the world, but the UK (and US) is providing plenty of inspiration with thought-leaders such as Graeme Nuttall OBE leading the charge to build on the success of enterprises such as John Lewis Partnership where all 88,700 permanent staff are Partners in the business - owning 46 John Lewis shops across the UK (32 department stores, 12 John Lewis at home and shops at St Pancras International and Heathrow Terminal 2). Can you imagine what this could be like in Australia? Indeed, there has been talk of this coming to Australia – this could lead to some truly disruptive and beneficial innovation in our economy?

Why is employee-ownership beneficial? We know that it results in more cohesive, engaged and productive workplaces and contributes to economic development and national wellbeing. It is only a matter of time before our employee-ownership movement in Australia and New Zealand catches on.

As we begin to develop and grow please don’t hesitate to contact me about your ideas to build employee share ownership and participation in the Australian and New Zealand context.

Angela Perry is the Chair of Employee Ownership Australia and New Zealand – you can contact Angela via email angela.perry@employeeownership.com.au. For your everyday member support needs contact EOA Communication Officer and Member Secretary Antony McMullen, antony.mcmullen@employeeownership.com.au


Cessation of employment

When it comes to employee share schemes, there are a growing number of employees, who, when made redundant, face a tax liability on their equity due to the rules relating to tax at cessation of employment.  These rules mean employees face large tax liabilities when they are made redundant, when they can least afford to pay. In addition, individuals who face these tax liabilities rarely receive the full equity grants when they are tested up to three years later, with approximately 90 per cent of plans do not vest.

There has been continued discussion on issues relating to cessation of employment - with growing recognition from both sides of Parliament that this is an issue that needs to be urgently addressed.

To positively impact this debate, EOA will address Government and the Opposition concerns by arguing the relative costs and benefits of change. We are waiting to see what the costing for changes looks like and how we can positively influence the debate in this crucial area.

Trusting in change

When it comes to employee-ownership appropriate tax law in the area of trusts is an important issue for EOA. Currently the Government is reviewing law and practice in this area. Government has made a draft Ruling in this area (draft Tax Ruling on Trusts TR 2014/D1) and is engaging with stakeholders, including of course EOA.

The draft Ruling has taxation consequences for employers, trustees and employees who participate in an employee remuneration trust arrangement (ERT). In particular, the Ruling explains how the taxation laws apply when a contribution is made by an employer to the trustee of an ERT and benefits are paid or provided by the trustee of the ERT to employees.

The Ruling may limit the deductibility of employer contributions to a trust as part of an employee share scheme.

EOA Expert’s Panel has made two key requests, that Division 83A arrangements be dealt with in a separate ruling to non-Division 83A plans to avoid the possibility that conditions that are intended to only apply to non-Division 83A arrangements applying to more common arrangements.  The second request was to avoid double taxation of dividends where the dividends are not distributed in a financial year. Essentially, the Trust pays income tax in the financial year on the dividends and later the employee pays tax when the dividends are distributed to them. EOA will keep you up to date as about our progress in this area.

Employee member-owned firms

In March last year, the Australian Senate referred the role, importance, and overall performance of cooperative, mutual and member-owned firms for the Australian economy to its Economics Reference Committee. This process has now concluded and draft legislation is currently being developed.

The Committee investigated current barriers to innovation, growth, and free competition, and the impact of current Government regulation.

Of course Employee Ownership Australia and New Zealand made a submission (see it here). In the submission EOA argued that it’s clear that Australia needs to improve the way its businesses are owned in order to create higher long-term economic growth. Governments should be acting to ensure that all types of business, from large public companies to family, co-operative, mutual and employee owned firms, are able to play their part in creating wealth in a strong economy. Employee ownership needs to be promoted, and government can play a part in providing the right policy environment across the employee-ownership spectrum i.e. from employee share ownership schemes through to fully-fledged employee-owned companies.

So what’s next? On the 17th of March a report of the Committee will be presented. Once the report is out, the Commonwealth Government will have three months to respond. Will we see changes to the Corporations Act and positive change of provision of business support to assist all kinds of business forms in Australia – including employee-owned firms?

The Economics Reference Committee secretariat can be contacted on (02) 6277 3269 if you have any questions about this inquiry; EOA will keep you up to date.

EOA 2016 Awards and Conference: Sharing the Employee Ownership Future – 27 May – Book Now

What could the future look like with greater employee-ownership? Could this be a key part of the innovation agenda that is currently being pursued?

Our 2016 Awards and Conference is on again, and this time we will be focusing on the future. As the Senate inquiry illustrates there is so much more interest now in our sector of the economy. It is the time to grow employee share ownership and participation in Australia and New Zealand.

Our conference is the largest of its kind in Australia and attracts professionals from across the business world, including share plan advisers, administrators, HR professionals, employment and contract lawyers, finance directors, company secretaries and communications experts.

Our conference is followed by our awards lunch where Employee Ownership Australia and New Zealand awards companies that have displayed excellence in employee engagement and ownership.

The excitement of the Award program culminates after the conference. The Awards Celebration offers networking opportunities, lunch and drinks followed by the formal awards ceremony.

You can download a nomination form online for this year’s awards, which have now opened.

For our Early Bird rate book now which will only be open for a short period until the end of March. To avoid disappointment please book now.


We have some great training sessions coming up. Check out our Eventbrite page to find:

More information will be forthcoming next week in our Special Education Edition of Employee Ownership Matters.


EOA: Perth Gathering – Thursday 7 April

The Perth Gathering will provide our members and supporters in the west an opportunity to come along and learn all about EOA. Those in attendance will get to know about our Inner Circle reference group, and our Experts Panel. Attendees will hear inspiring company stories to find out how employee-ownership works in action.

More information about this event coming up in our Special Education Edition next week.


Have you got an inspiring employee-ownership story? If so, we’d like to hear from you. Contact our Communication Officer and Member Secretary, Antony McMullen, antony.mcmullen@employeeownership.com.au with your ideas and suggestions.

EOA page

Employee Ownership Discussion