LRD Booklets December 2011

Using financial information - a practical guide for trade unionists


Strong trade union organisation can be a major factor in winning improvements in the workplace over many issues, including pay and other benefits. It follows that trade unionists need to be well informed about the finances and structures of the company or organisation they work for in order to strengthen their negotiating position.

Negotiating from an informed position means that trade unionists can operate on a more level playing field, combat arguments from employers about their ability to meet pay claims and fight back against redundancies or closures.

It has been the case for some years that it is not just workers in the private sector who need to know about the finances of the organisations they work for. It also a necessity for civil servants and local authority workers who may be faced with a transfer of their work to a company in the private sector, and for public sector workers in NHS trusts; and also teachers who find the government have transferred their school to academy school status or who find themselves working in a so-called free school.

The most publicly available source of financial information is collected in a company’s or organisation’s annual report and accounts. More timely information can be produced in the way of half-yearly and, in the case of some large multinational firms, quarterly accounts. The employer will most likely also have monthly management accounts, although they will be more difficult to get hold of.

With pages and pages and various columns of figures, an organisation’s financial accounts can at first sight be intimidating, but trade unionists do not have to be financial wizards to understand the accounts. Let’s face it, every day trade unionists are dealing with their own personal finances, balancing the books on how much is coming in from pay and how much is going out to settle bills.

By getting a basic knowledge of accounts and knowing where to look for particular figures trade union reps can pass on good news to their members or can combat any bad news a company or organisation is providing to them about their finances.

This guide takes readers through:

• the different types of companies and organisations;

• the different ways of presenting figures in an annual report and accounts and the important sections that trade unionists should look at most carefully; and

• how to use information to bargain more effectively, for example in preparing a pay claim.


Before starting out on any analysis of an organisation’s accounts, it is important for trade unionists to recognise that the accounts have their limitations.

Firstly, they are historical — they only cover what has happened, for example, over the past year or two. And as any piece of investment literature will point out — “past performance is no guarantee of future results”. Secondly, accounts are not written or produced with trade unionists in mind, but are geared towards investors, and for larger companies at least, will be full of ratios or statistics to impress the City and the large institutional shareholders.

This means that information that would be of value to trade unionists, for example on levels of employment and pay, is only given in very limited detail or not at all. Employers’ bodies, such as the CBI, which pay lip service to the idea of equal pay, recently successfully lobbied the Conservative-led coalition government over compulsory equal pay audits that were included in the 2010 Equality Act, which would have required organisations with more than 250 staff to report their gender pay gap from 2013. The government is instead encouraging employers to publish the differences in pay between male and female employees on a voluntary basis.

Thirdly, accounts are limited in that they will not provide details of any illegal or underhand actions by either an organisation or management.

Finally, it is important that trade union negotiators do not ignore a vital source of information — their members. They have knowledge of what is happening on an everyday level in an organisation and their observations are important. It makes sense to use this valuable and often overlooked resource.