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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