Lords finally accept employee shareholder status

The House of Lords has finally accepted the Government’s proposal to introduce

The House of Lords has finally accepted the Government's proposal to introduce employee-shareholder contracts via the Growth and Infrastructure Bill, after two earlier rejections and then gaining concessions from the Government. This measure will introduce a new employment status, whereby in exchange for at least £2,000 in shares, the employee gives up a number of employment rights, including 'ordinary' unfair dismissal. The concessions are:

  • an employee shareholder agreement will only be valid if, prior to entering into the contract, the individual has received advice from a relevant independent advisor (a lawyer, CAB, law centre, union, etc.) and the employer has to pay the reasonable costs of that advice;
  • there will be a 7 day 'cooling off' period, during which any acceptance of employee shareholder status will not be binding;
  • employers must provide a written statement with full details about the shares and the status of the rights those shares attract;
  • any jobseeker who refuses an offer with employee shareholder status will not forfeit their social security benefits;
  •   the first £2,000 of shares will not attract income tax; and,
  •   existing employees will be protected from detriment if they refuse to switch to an employee-shareholder contract.

September 2013 looks to be the likely implementation date.

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