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George Osborne proposes employee share schemes in return for rights

Simon Ward
by Lovemoney Staff Simon Ward on 09 October 2012  |  Comments 8 comments

The Chancellor has outlined a scheme to offer tax-free shares in companies in return for employees waiving some of their working rights.

George Osborne proposes employee share schemes in return for rights

Chancellor George Osborne has unveiled plans to offer workers shares in their employer's company in return for giving up some of their employment rights.

At the Conservative Party Conference, the Chancellor outlined an “enterprise strategy”.

Part of it involves employees waiving their rights to statutory redundancy pay, protection from unfair dismissal, time off for training and flexible working. It would also require mothers to give 16 weeks’ notice of when they are to return to work following maternity leave. The current deadline is eight weeks.

In return, employees would be offered between £2,000 and £50,000-worth of shares. The shares would be exempt from Capital Gains Tax if sold.

The proposals could be in place by April next year if they are approved.

The new contracts would be optional for existing staff but could be the sole employment contract offered to new starters.

The Chancellor said: “This idea is particularly suited to new businesses starting up and small- and medium-sized firms.

"Get shares and become owners of the company you work for. Owners, workers and the taxman, all in it together."

What do you think of the idea? Would it offer suitable compensation for the rights lost? Vote in our poll below and let us know your thoughts in the Comments section.

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Comments (8)

  • Arblaster
    Love rating 41
    Arblaster said

    Why do I get the impression that Gideon Osborne has not thought this through? Let's trample over workers' rights. You make it easier to fire a worker by turning him into a shareholder. How are you going to fire someone who owns the company? In fact, if you have a beef with your boss, you can keep buying the company stock, until you have enough to outvote him. Sounds great.

    In fact, the only new thing about this latest drivel is that the worker gives up his rights. There have been workers; co-ops in the past. There are also workers' share schemes. Not that the latter did the workers any good. Often the people who work in the place are the last people to know that the place is going titts up. I know for a fact that RBS has/had an employee's share scheme, how many employees back in 2008 knew that the company was being driven into the ground? The shareholder scheme didn't spare them the redundancies either.

    If you work for a PLC, you can buy the shares on the market anyway, and hang on to your workers rights. You never know when you'll need your rights.

    Report on 10 October 2012  |  Love thisLove  0 loves
  • ChrisMK
    Love rating 0
    ChrisMK said

    This idea is just so ridiculous it is not true! Yet another example that politicians don't live in the real world. I run a small business and - yes - I would like to simplify and scale back the burden of employment legislation. If it was easier to hire and fire people then I would in the past have created additional jobs. But this idea of employee shares cannot work ... most small businesses don't have freely traded shares to give out. How can I create £2,000 or more worth of shares out of nothing to give to each staff member? I had 12 staff at one stage - so I would have had to create £24K worth of shares to hand out. How would I do that? And what use would a share certificate in my business be to anyone? Small businesses are not traded on the Stock Market or AIM, their shares have no external value. I assume the idea is that the employer gives out a piece of paper saying "if I sack you then you can still get a payment of £X"? And what about people who leave voluntarily? Can they still cash in their shares? How?

    Absurd and unworkable.

    Report on 11 October 2012  |  Love thisLove  0 loves

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