The Chancellor has today, at the Conservative Party Conference, announced radical plans for a new kind of employment contract, known as an ‘employee-owner’ contract. It is intended that this new contract would be introduced from April 2013.
Under the proposals, an ‘employee-owner’ could be given between £2,000 and £50,000 of shares in the business in which he or she works with any capital gains on those shares being exempt from tax. In exchange, employees would give up some of their key employment rights, including the right to claim unfair dismissal and the right to a redundancy payment. These employees would also give up the right to request flexible working and the right to request time off for training. Female employees would also be required to give 16 weeks’ notice of a return from maternity leave, rather than the usual eight.
The government will be consulting on the detail of this proposed new scheme later this month. EEF will be responding - watch this space for more details once the government’s consultation is available.
In the meantime, EEF’s Head of Employment Policy, Tim Thomas, said:
"A quid pro quo approach linking employee share ownership to increased flexibility on employment rights could boost take-up of the former and be of benefit to some employers. But it is unlikely to be a game-changer for manufacturers and the government should not lose focus on the need for wider employment law reform in areas such as employment tribunals and protected conversations.”
The government’s press release is available here