Under the new type of contract, employees will be given between £2,000 and £50,000 of shares that are 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.
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.
Is there some problem workers have that this is trying to solve? I see no reason why I would ever want to work for (or own shares in) a company that does this.
Mark Serwotka, leader of the Public and Commercial Services Union, challenged claims that the move would result in a form of “employee ownership”.
“There are so many holes in this it deserves to sink without a trace,” he said.
“The idea that owning a few shares amounts to ‘employee ownership’ is laughable, but also even a modest amount wouldn’t qualify for capital gains tax anyway, and would be worth nothing to someone who had been sacked after giving up their right to claim unfair dismissal or qualify for redundancy.”