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After much debate in the Commons and the House of Lords a new form of employment status, to be known as employee shareholders, will be introduced and become law in Autumn 2013.
An employee shareholder will agree to give up their statutory rights of unfair dismissal and redundancy pay in exchange for shares in the business in which they work. The shares given to the employee must have a value of no less than £2,000 and no more than £50,000 with the first £2,000 of shares not attracting income tax. There will be a number of conditions that will safeguard the employee shareholders including a seven day ‘cooling off’ period, during which any acceptance will not be binding and a requirement for them to receive independent legal advice before agreeing to it. The employer will be under an obligation to pay the reasonable costs of this advice. Furthermore, existing employees will be protected from detriment if they refuse to become an employee shareholder.