Employee Shareholders: A concept that will pay no dividends!
The Growth and Infrastructure Bill 2012-2013 (the Bill) by Clause 27, proposes to introduce the concept of ‘employee shareholders’.
My colleague Tom Moyes first commented on this concept on 10 October 2012 .
Essentially, an employee shareholder would be given shares in the employer company in exchange for waiving certain employment rights such as:
- unfair dismissal rights (except automatically unfair and discriminatory dismissals);
- certain rights to request flexible working for training/studying;
- rights over statutory redundancy pay; and
- they would have been required to give 16 week’s notice to return from maternity or adoption leave (instead of 8).
Yesterday The House of Lords voted (by 232 to 178) to strike out clause 27 of the Bill. Unfortunately yesterday’s budget announced that employee shareholder contracts will come into force on 1 September 2013 – this just proves how fast the law can change.
The House of Commons will now reconsider the Bill and decide whether or not to scrap the concept of employee shareholders altogether. The perceived view is that if employee shareholders are introduced, there would be a slow take-up by employers.
It is rumoured that the Liberal Democrats are against the concept and so the future is quite uncertain. Clearly the Conservatives are in favour.
Partner and Head of Employment
Employment Law
PKelly@LawBlacks.com
0113 227 9249
@PaulLawBlacks
View profile
Paul Kelly
