PR Newswire Europe, June 12, 2006, Monday

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PR Newswire Europe

June 12, 2006 Monday 10:00 AM GMT


HEADLINE: Co-operative Insurance Supports First Group Bus Workers Shareholders Action

DATELINE: MANCHESTER, England June 12

BODY:
MANCHESTER, England, June 12 /PRNewswire/ -- Co-operative Insurance (CIS) is supporting a unique shareholder action where by bus workers who own shares in First Group are a calling for the company to adopt a workplace human rights policy.
The resolution, put forward by employee shareholders, would require First Group to introduce a policy based on International Labour Organisation conventions and to report to shareholders on material risks that could arise as a result of the company's problematic labour practices.
This is believed to be the first time that employees in the UK have used their personal shareholdings to collect the hundred signatures needed to get a special resolution debated at an annual meeting. The workers' resolution, which has the backing of other investors including CIS and the TUC Superannuation Society, will be debated at the First Group meeting in Aberdeen next month.
The resolution calls for a policy to be designed to "minimise the risks to shareholder value that could arise from unsatisfactory labour relations outcomes such as work stoppages, reputational harm, poor employee morale, high employee turnover, or high levels of internal or external conflict."
The Transport and General Workers Union National Liaison Committee, which represents employee interests at First Group, said that because employees were bound by employment contracts preventing them from commenting publicly on company performance, "the shareholder resolution is a way for employees who are also shareholders to express concern about the long-term financial health of the company."
The supporting statement to the Resolution cites allegations of poor labour and employment practices at First Group in the US and in the UK.
The statement reports a US government agency allegation of retaliation for union support, and a finding by Cornell University's Lance Compa, a specialist in international labour and human rights, that First Group's practices at its US school bus subsidiary have demonstrated "a coordinated strategy to block workers' freedom of association by a pattern of interference at company locations around the United States," which in Compa's judgement would be "a violation of international human rights standards."
It also cites research by the Transport and General Workers Union showing that First Group had the worst industrial relations record last year of any bus operator in the UK, based on the number and length of industrial actions at the company.
Ian Jones, head of Responsible Investment with the Cooperative Insurance Society said: "As a long-term shareowner, we are concerned to see that companies adopt best practice human resource policies which respect employee rights, and encourage constructive resolution of conflicts. As a company that provides services to the public in the UK and the US, First Group's human resource practices and corporate reputation could be decisive factors in the long-term performance of the company."
The supporting statement to the resolution points to two examples where reputational issues have negatively influenced the company:
Earlier this year, education authorities in Riverside, California decided that First Group's American school bus subsidiary's reputation and employment standards were so deficient that they chose a more expensive bidder to run their school buses.
South Yorkshire Passenger Transport Authority passed a vote of "no Confidence" in First Group in November 2005 following fare rises and cuts in services
Tom Powdrill, senior policy officer at the TUC, said, "Our pension fund has been very concerned about companies pursuing goals that are perceived to be in the short-term interests of management at the expense of long-term shareholders. Both employees and institutional shareholders care about the long-term performance and this resolution is an expression of this term at First Group."
Notes to Editors:
1. Under UK company law, 100 shareholders holding shares in a company with an average sum, per shareholder, of not less than GBP100 par value, can requisition a motion at the company's annual general meeting.
2. The International Labour Organisation's Declaration on Fundamental Principles and Rights at Work ("ILO Declaration") includes the right of employees to establish and join independent trade unions and to bargain collectively (ILO Convention 87 and 98), protections against discrimination or interference by employers in the exercise of those rights (ILO Convention 98), and protections against discrimination in employment (ILO Conventions 100 and 111).For further information contact: Dave Smith, Co-operative Financial Services Press Office, Tel: +44(0)161-829-5397, Fax: +44(0)161-829-4590, e-mail :