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Osborne offers shares for rights

Osborne offers shares for rights

Workers will be given the opportunity to give up their employment rights in exchange for shares in their company under new plans outlined by the Chancellor George Osborne. Shares worth between £2,000 and £50,000 would be given to the "employee-owners" which would be free of capital gains tax whenever they choose to sell them. However, in return the worker would have no right to claim unfair dismissal or redundancy and would not be able to request flexible working arrangements or time off for training.

Mr Osborne announced the policy at the Conservative Party conference in Birmingham – reportedly with the backing of senior Liberal Democrats – and it is expected to be fast-tracked through Parliament to be introduced in April next year. The Government expects hundreds of thousands of workers to sign up to the scheme over the next few years leaving the Treasury with a bill of around £100 million in lost capital gains tax by 2017/18. TUC general secretary Brendan Barber said trade unions "deplore any attack on maternity provision or protection against unfair dismissal" but he believes the initiative will have only a limited impact as firms will be put off by the "red tape" associated with it.

Justin Govier, Employment Partner at IBB comments:

“Whilst the concept of employee-ownership may well be desirable as it gives the employees a genuine sense of stake holding in the business for which they work, it seems somewhat disingenuous to suggest that the levels of ownership will be such to justify forcing employees to give up basic employment rights in the vast majority of cases. It is a shame that the Chancellor has put in place this caveat – an announcement that he is to encourage employee-ownership by giving a capital gains tax break (without strings attached) might have been rather a good idea.”

Our Employment team provides advice on the employment aspects of all major business decisions. For advice, contact a member of the team; call us on 08456 381381 or email employment@ibblaw.co.uk.