It is now confirmed that on 1 September 2013 the Employee Shareholders scheme becomes law. This is the scheme whereby employers will be able to offer to swap some employment rights, including those relating to redundancy, for at least £2,000 of shares.
There was a large amount of opposition to this scheme and, in order to get it through Parliament, the Government made a number of concessions. These were that:
- the first £2,000 of shares will not attract income tax;
- existing workers will be protected from detriment if they refuse to switch to an employee-shareholder contract;
- an individual cannot accept an employer’s offer before the expiry of a seven day ‘cooling off’ period;
- employers making an offer of a job under one of the new contracts will have to provide written statements setting out (i) the rights that the employee is giving up in exchange for shares and (ii) full details of the shares being offered including any dividend or voting rights attached to them;
- anyone on Jobseeker’s Allowance will not be sanctioned for refusing to accept a job offer contingent on participation in the shares-for-rights scheme; and
- prior to becoming an employee shareholder, an individual must receive advice from a relevant independent advisor (i.e. a lawyer, CAB, law centre). The employer has to pay the reasonable costs of that advice, whether or not the individual then accepts the role.
