LABOUR IN BUSINESS

Waikato Times, Volume 104, Issue 17492, 28 August 1928, Page 8

LABOUR IN BUSINESS

MR VALUER'S SCHEME. ADDRESS AT TE AWAMUTU. ALMS OF EMPLOYEE PARTNERSHIP. ■'The Status of Labour in Business**' was the title of a very interesting address given at the Te Awarnutu Chamber of Commerce monthly luncheon. The President, Mr C. G. Downes, introduced Mr H. Valder to the members', and welcomed Mr F. A. de la Mare. Mr Valder explained the objects of; employee partnership. At present the workers were relegated to an inferior position as wage-earners, and undue importance was attached to the property factor. The scheme he advocated would give a fixed return for capital invested, the balance going to the labour which earned it. Mr Valder went on to describe an experiment he had instituted. He had had control of a business, employing ten or twelve men, with' a capital of about £2OOO. He told the employees that interest on the capital would have to be paid, and after also paying regular wages the balance would be divided pro rata. They all. agreed to "give it a go" on that 'basis. He assessed the relative importance of the various workers, ranging frc-m ten shares to the manager to one share for the ' boy who swept the premises. Quarterly balances were taken out. The capital invested was paid 9 per cent, as interest (it had to be more than ordinary bank rate becauseof the greater riskj. The employees were in control, without having risked any capital. They all worked in harmony, more harmoniously than in other businesses, .because it was to their interest to make profits over and above 9 per cent. Actually they were being paid by results. The Plan Works. After trying,, out the scheme for some time he found it working so satisfactorily that he decided to register the concern as a company, giving the workers what he called "labour shares" as a matter of right, not merely as a matter of grace. In hav- i ing the articles of association prepared he found that labour shares could not be issued, as the Companies Act never contemplated rewarding a man for services just as if he had paid in capital. After three years' continual trying he had, been able to get legislation enacted enabling labour | shares to be issued. New Zealand' was the only country in the Empire with this legislation. The issue of these shares gave holders similar rights of control to the holders of capital shares. The proportion of shares was entirely a matter for mutual arrangement in each business. The scheme,' said Mr Valder, was nothing more nor less than a partnership 'between those who invested capital and those who invested labour. Mr Valder said there was a universal franchise for politics. Why not the same franchise for business? There would he far greater efficiency. He hoped that his address would start a. fresh train of thought among employers. He was confident that they could apply the principles he had enunciated to their respective businesses ■ ■ Questions Answered. To a questioner Mr Valder said if a business such as he proposed showed I profits insufUciem to pay 9 per cent th" capital shareholders could claim a cumulative reward. If the -business went into liquidation, the capital investors would stand the loss. He contended that labour would lose more through losing employement. The executive head, he said would have power to increase staffs, and decrease them. The only reason for increasing an individual employees shareholding would be because that individual earned more. Rises in salary or wages were now given because the recipient earned more. ' There must, said Mr Valder, be freedom of action on both sides. His scheme would not remove the right to strike, but it would greatly lessen the nossibilifv. Labour shareholders would have a right to elect directors. In ceueral, the labour shares would be allocated on the basis of wages earned That need not be rigidly adhered to,' of course. In instituting such a scheme as he had outlined, the basis of capital value would have to be mutually agreed upon. In the case of a profit in any one year it would probably not all be cSvided at once. A reserve fund would be created, but if a labour shareholder left the job he would be entitled to th- cash value of his interest in that reserve fund. Mr Valder resumed his seat amitf applause, and was heartily thanked fo/ h's very'interesting address.