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Lords bat back shares-for-rights

Lords bat back shares-for-rights

Government plans to allow employers to offer workers shares in exchange for reduced employment rights have been rejected by the House of Lords for the second time.

Peers refused to support the so-called shares-for-rights scheme, which would enable employers swap some employments rights, such as the right to redundancy pay and to claim unfair dismissal, in return for shares. Lords voted by 260 to 191, a majority of 69, to reject the clause when presented with the bill for a second time.

The scheme has received much criticism from employee organisations and MPs across parties, but Michael Fallon, the Business Minister, has said the scheme would be voluntary.

During the debate, QC and independent crossbencher Lord Pannick described the scheme as “unrealistic” and warned it would be “damaging to industrial harmony to allow employers to buy off basic employment rights“.

But Business Minister Viscount Younger said the new employment status was “wholly voluntary” and people could not be coerced into accepting revised contracts. The bill will now be debated further in the House of Commons before going back to the House of Lords.

IBB’s Employment Team provides advice on the employment aspects of all major business decisions. To contact a member of the team for advice, call us on 01895 207892 or email employment@ibblaw.co.uk