After two previous refusals, the House of Lords has finally
accepted the Government’s proposal to introduce employee-shareholder
contracts having secured a number of concessions.
The Government proposes to introduce the contracts from
September this year. Under the contracts employees will receive shares
in their employer’s business of between £2,000 and £50,000, exempt from
capital gains tax, in return for giving up a number of employment
rights. In order to get the Bill through the House of Lords,
the Government has now agreed that:
benefits such as jobseeker’s allowance will not be affected
if an individual does not wish to take up an employee-shareholder
there will be unfair dismissal rights from day one and
protection against detrimental treatment for refusing to agree to an
employers will be required to provide full details of both
the employment rights being given up and the rights and restrictions
attached to an employee’s shares
there will be a seven day “cooling off” period, during
which acceptance of an offer to become an employee shareholder will
have no effect.
The provisions were only passed by the House of Lords at the
third time of asking after the Government made a final concession,
namely that an employee-shareholder contract will be valid only if the
employee receives independent legal advice prior to entering into
it. Furthermore, the employer will be liable to pay the
reasonable costs of that advice.
About the Author
Lawson-West specialise in commercial, business and employment law. Our team
of dedicated commercial solicitors can help with buying or selling a business,
business law and disputes, landlord and tenant issues and commercial property.
Our expert employment team can offer practical advice and guidance on all
aspects of employment law including redundancy, compromise agreements and
dismissal procedures. Visit
www.lawson-west.co.uk for more information.
For information on employee contracts please contact
employment law specialist Vaishali Thakerar at Lawson-West on 0116 212