8 October 2012: New Employee-Ownership Contract
Date: 8th October 2012 | By: Claire Malley | Categories: Wirehouse
The Chancellor of the Exchequer, George Osborne, has announced proposals for a new type of employment contract – an employee-ownership arrangement.
Under the proposals, employees will give up some of their UK employment rights in exchange for shares worth between £2,000 and £50,000 in the company they work for. Any growth in value of the shares will be exempt from capital gains tax and the employer will be able to buy them
back at a “reasonable price” upon an employee’s dismissal.
Employee-owners will forsake rights relating to unfair dismissal, redundancy, the right to request flexible working and time off for training, and will be required provide 16 weeks (rather than the usual 8 weeks) notice of a firm date of return from maternity leave.
The contract is principally intended to benefit fast growing small and medium sized companies wanting to create a flexible workforce. Companies can choose to offer only this new type of contract to new employees, but employee-owner status will be optional for existing employees.
The government proposes to consult on the proposals later this month and publish legislation later this year. It is intended that companies will be able to use the new type of contract from April 2013.