Expert Committee on Economic Democracy (SOED) fully supports the introduction of the Workers' Ownership Cooperative Act (WCOA), which brings the proven practices of employee co-ownership to Slovenia. Models such as ESOPs in the US and EOTs in the UK and Canada have proven that employee ownership leads to greater stability and competitiveness of companies, improved working conditions and greater social justice.

We now have the opportunity to create the conditions for the emergence and survival of sustainable businesses in Slovenia, where workers are co-owners and co-creators of success. It is high time to pass the long-overdue law to enable the development of employee ownership in Slovenia.

You can read more about the law and why it is important in the SOED letter of support:

LETTER OF SUPPORT FOR THE WORKERS' OWNERS' COOPERATIVE LAW

The Expert Committee on Economic Democracy (SOED) expresses its full support for the efforts of the Government of the Republic of Slovenia in adopting the Workers' Owners' Cooperative Society Bill (ZLZD), which introduces the ESOP model of employee co-ownership into the Slovenian legal order.

ESOPs (Employee Stock Ownership Plans) have flourished in recent decades in many economically developed countries, including the United States, the United Kingdom and Canada, and are currently being introduced in some other EU Member States, such as Slovenia and Denmark. In the US, the ESOP law was passed with bipartisan support in 1974, but only flourished in the 1990s, when the model gained tax advantages, notably for owners who sold their businesses to employees and for companies that used the surpluses to finance ESOP buy-outs. Today, as many as 14.7 million workers in the US, or 10 % private sector employees, work in ESOP companies, representing a remarkable success in the field of worker ownership. Thousands of companies are majority employee-owned, ensuring long-term stability, greater employee participation and improved working conditions. The UK legislated and made the ESOP model tax-efficient in 2014, which has today led to the establishment of employee ownership in almost 2,000 companies. In 2023, ESOPs were the second most popular way to transfer ownership, after takeovers of companies by financial funds. The Canadian government has followed the trend - in 2024, it enacted the Canadian ESOP model and adopted tax incentives similar to those of the US and the UK, which are designed to encourage this form of ownership in the economy.

In July 2024, the Government of the Republic of Slovenia adopted the starting points for the proposal for a ZLZD, which address key challenges for the Slovenian economy, including transfers of ownership in small and medium-sized enterprises. This law will play a very important development role in the coming years - according to a recent survey by the University of Ljubljana, 40 % owners of SMEs will transfer their ownership in the next 10 years, while 66 % owners do not have a succession plan in place. The succession crisis is also an extraordinary opportunity to promote ownership models that are both business efficient and lead to sustainable development, local responsibility and employee well-being.

The introduction of the Workers' Co-operative Ownership Act would put Slovenia on the international map of employee co-ownership, joining the world's most advanced economies that are successfully addressing economic, social and societal challenges through the ESOP model. Similarly, we believe that the law would contribute to the long-term stability of the Slovenian economy, the competitiveness of companies and the social well-being of workers.

Yours sincerely,

Prof. Dr. Aleksandra Kanjuo-Mrčela, Chair of the Expert Committee on Economic Democracy
Saša Muhič Pureber, Vice-Chair of the Expert Committee on Economic Democracy