We have previously written about the Government’s proposal to allow employers to offer employees shares in exchange for the employee giving up some of their employment rights. The Government’s proposals were twice rejected by the House of Lords, and as a result certain concessions to the legislation have been made in order for it to get approved. The main changes are as follows:
- An offer of employee shareholder status must include a statement explaining the employment rights which would be sacrificed and the rights attaching to the shares.
- The individual must receive advice about the offer from an independent solicitor, barrister, legal executive, union official or advice centre. The employer must meet the reasonable costs incurred in receiving this advice, regardless of whether the offer is accepted. The Government plans to rule out an income tax charge on the benefit of this advice.
- Individuals agreeing to the offer will be entitled to a seven-day “cooling off” period from the day legal advice is received.
The government intends to implement the new employment status on 1 September 2013 as part of the Growth and Infrastructure Act 2013.
We are of course happy to advise any employers who are thinking of using employee shareholder status – alternatively we can provide the necessary independent legal advice to employees in order for them to claim the new status. Please get in touch if we can help.
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).