Government Majority of 38 Reinstates “Employee Shareholders”

With very little coverage in today’s media[1] (only the BBC appearing to include a mention of the vote, and then only in its Democracy Live pages), MPs yesterday voted to reinstate clause 27 of the Growth and Infrastructure Bill – “rights for shares”, or a new status of employee known as an “employee shareholder” – by 277 votes to 239, the government’s majority reduced to 38.

The TUC have questioned whether the proposals have any support, describing them as a “tax dodge” and indicating that they’ll lobby peers in the next stage of the bill.

When the Lords previously voted to reject this new employee status, there were critics of the proposals from both coalition benches and other members of the House, and the reduced majority in the Commons makes parliamentary ping-pong a likely next step… although with the government opting to reinstate the clause rather than quietly drop it, the final draft of the bill can be expected to include the provision.

In what is a concession to jobseekers, guidance will be clear that claimants of JSA will not be required to apply for employee shareholder positions, Minister of State Michael Fallon saying:

“I want to make it absolutely clear that this new employment status is voluntary. That is why the Government have looked at all this again in the light of comments and speeches by the noble Lords in that debate. We have decided now to remove any remaining ambiguity, which I hope will reassure both this House and the other place. I can tell the House that as a result of considering the policy further we have decided that job centre advisers will not be able to mandate job seekers to apply for employee shareholder positions. The Government will amend the guidance for DWP jobcentre advisers to state explicitly that a jobseeker cannot be mandated to apply for an employee shareholder job. Draft guidance will shortly be placed in the Library.”

If (or when?) passed into law, the legislation will provide individual employees with shares in the company of no less than £2,000 and no more than £50,000, in return for the rights:

• to apply for study or training,
• to apply for flexible working,
• not to be unfair dismissed, and
• a redundancy payment.

Filed under: Contracts of Employment, Flexible Working, General News, Laws & Regulations by Employment Law Clinic           Post created on: April 17th, 2013