Chancellor Proposes New Legislation for Employee Shareholders
(but not with Employee Rights)
In his speech to the Conservative Party Conference today, Chancellor George Osborne announced a new type of employment contract: for thirty bags of silver (or shares of £2,000 – £50,000 that will be exempt from Capital Gains Tax) employees will be able to sell their rights to:
- make a claim for unfair dismissal;
- request flexible working and time-off for training; and
- increase the notice necessary, from eight weeks to sixteen (more notice than currently has to be given to commence maternity leave – that is only fifteen weeks, so an employee intending only to take limited maternity leave, or perhaps only compulsory maternity leave (two weeks), could have to give notice of their return before their employer has acknowledged their maternity leave at all) of a firm date of return from maternity leave.
From their introduction – expected next April – these new “owner-employee” contracts will be available for clients of Employment Law Clinic alongside our current offerings, but in practice (at least until we see the draft legislation, and can consider matters further), these new contracts are expected to involve a lot of complications in their own right & are not expected to be particularly attractive to your prospective employees, potentially being turned-off by employers willing to sell the employees’ rights so freely.
Once these proposals are considered alongside the options currently available – employers able to dismiss new employees within two years of employment without a reason; discrimination claims still appearing to be available to shareholder-employees; new contracts that could sit alongside existing contracts for current staff; costing at least £2,000 in shares of the business that employers have built up; the opportunity already available to dismiss any employee for capability at any time (usually for a lot less than £2,000, even with professional assistance) – the proposals sound like a cheer-leading headline for a party conference, but not something that will really help the typical small employers that use our services.
Once more details are known, we will certainly provide advice on these pages of the site for employers that might be interested in them though, but whether the new contracts prove popular (or make an employer that insists on using them popular) is yet to be seen, and any warm welcomes for these proposals are probably best left to the conference audience.