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Would you appoint Employee-Owners?
Last month, Chancellor George Osborne announced plans to allow employees to forfeit some employment rights in exchange for a stake in their firm.

He said the proposal is be aimed at small, fast-growing companies and believed thousands of workers would be taken on as "employee owners". He said the contract would be voluntary on both sides and would see employees given between £2,000 and £50,000 of shares that would be exempt from capital gains tax. In exchange, they would give up their UK employment rights on unfair dismissal, redundancy, and the right to request flexible working and time off for training, and would be required to provide 16 weeks' notice of a firm date of return from maternity leave, instead of the usual eight.

Although the idea has been welcomed by some people, to many it appears to be completely unworkable. How many employees do you know that would give up their right to redundancy payments or right to claim unfair dismissal in exchange for being given nominal shares that they would have to return if they left? Would you want to give away equity in your company and how would the shares be valued? It certainly doesn’t seem to be the way forward in terms of developing a highly motivated or engaged workforce, and is more likely to result in stressed workers worried about their future with the company.

The scheme will be optional for existing employees, but companies could choose to offer this scheme to new recruits. The Government expects to bring it in from April 2013.
Posted on 19 Nov 2016


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