Employee owner plans to boost growth set out
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18 October 2012 - Department
for Business, Innovation and Skills
consultation setting out plans for a new employment status called an
‘employee owner’ was published today, by Business Minister Jo Swinson.
The move follows the Chancellor’s announcement on 8 October and will
provide companies with a new option to increase the flexibility of how
they hire people and help their companies grow.
the new employment status, employee owners will have a different set of
employment rights and they will be given shares in the company of
between £2,000 and £50,000. Any increase in value of these shares will
not be subject to capital gains tax.
Employees taken on this way will have all of the rights associated with
other employees except for:
• unfair dismissal rights (apart from automatically unfair reasons and
where dismissal is based on discriminatory grounds),
• rights to redundancy pay,
• certain statutory rights
to request training
• the statutory right to
request flexible working
• employee owners will have
to give more notice to their employer of their intention to return from
maternity or adoption leave early.
Business Minister, Jo Swinson, said:
”We know that engaged employees are more productive and motivated. This
scheme increases the options for business and brings greater
flexibility to companies and employees in determining their employment
“By responding to the flexible needs of fast growing companies, it will
help them take people on, providing a real incentive for employers and
It will be entirely voluntary for the employer to offer the new status
– and for an individual to choose to accept it.
An employer will be able to choose the new status and still choose to
offer more rights to their staff (e.g. the right to request flexible
working or higher levels of contractual redundancy pay).
Companies of any size will be able to use this new kind of contract,
but it is principally intended for fast growing small and medium sized
companies that would benefit most from a flexible workforce.
The consultation sets out the proposal in detail and asks for views on
how the government can implement it. This consultation is focused on
both employment law and company law issues. The Treasury will be
consulting on the tax matters separately.
The consultation will close on 8 November 2012.
Legislation to bring in the new employee owner contract
will be introduced today via the Growth and Infrastructure Bill, with
the aim of companies being able to offer the new type of contract from
1. Anyone wanting to find out more about the proposals and
submit their views should visit http://www.bis.gov.uk/Consultations/consultation-on-implementing-employee-owner-status?cat=open
2. The Growth and Infrastructure Bill sets out a comprehensive series
of reforms aimed at supporting businesses, developers, and first time
buyers by slashing red tape that delays or discourages business
investment, development or job creation.
3. The Government's economic policy objective is to achieve 'strong,
sustainable and balanced growth that is more evenly shared across the
country and between industries'. It set four ambitions in the ‘Plan
for Growth’ (PDF
1.7MB), published at Budget 2011:
• To create the most competitive tax system in the G20
To make the UK the best place in Europe to start, finance and grow a
To encourage investment and exports as a route to a more balanced
• To create a more educated workforce that is the most flexible in
Work is underway across Government to achieve these ambitions,
including progress on more than 250 measures as part of the Growth
Review. Developing an Industrial Strategy gives new impetus to this
work by providing businesses, investors and the public with more
clarity about the long-term direction in which the Government wants the
economy to travel.
About the Author
© Crown Copyright. Material taken from the BIS Department for Business, Innovation and Skills. Reproduced under the terms and conditions of the Click-Use Licence.
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Article Published/Sorted/Amended on Scopulus 2012-10-22 10:27:29 in Employee Articles