Employment rights for sale?9 October 2012
On 8 October 2012, the Chancellor, George Osborne, announced plans for a new kind of employment contract called an “owner-employee”.
Under the new type of contract, employees will be given between £2,000 and £50,000 of shares in the business they work for and those shares would be exempt from capital gains tax. In exchange, they will give up their UK rights on unfair dismissal, redundancy and the right to request flexible working and time off for training, and will be required provide 16 weeks’ notice of a firm date of return from maternity leave, instead of the usual 8 weeks.
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 want to create a flexible workforce.
Owner-employee status will be optional for existing employees, but both established companies and new start-ups can choose to offer only this new type of contract for new hires. Companies recruiting owner-employees will continue to have the option of inserting more generous employment conditions into the employment contract if they want to.
Legislation to bring in the new owner-employee contract will follow later this year so that companies can use the new type of contract from April 2013. The Government will consult on details of the contract later this month.
If you would like to read the Department of Business press release please click here.
Our team are able to assist with atypical remuneration packages for employees. If you would like to contact them please click here.