News In Focus
Osborne unveils new species of worker
8 October 2012
A new species of worker, the "owner-employee", is set to make an appearance following an announcement by the Chancellor, George Osborne, at the Conservative Party conference today.
Owner-employees would give up various employment rights in return for shares in their employer, worth between £2,000 and £50,000, with any gains on the shares being exempt from capital gains tax.
In return they would give up their UK rights on unfair dismissal, redundancy, and requesting flexible working and time off for training. They would also have to provide 16 weeks’ notice, in place of the usual eight, of a firm date of return from maternity leave.
Legislation to enable the new rights will be presented to Parliament later this year, in time for the owner-employee option to be available from next April. Some aspects of the scheme will be put to consultation shortly. There will be rules on buying back the shares at a reasonable price if an owner-employee leaves the company or is dismissed.
The rights will be optional as respects those already in employment, but it will be possible in future to offer only this kind of contract to new employees. All sizes of company will be able to offer such conrcts, but thay are principally intended for fast growing smaller companies that want to create a flexible workforce.
Mr Osborne said the capital gains tax exemption on disposal of the shares would mean "owners, workers and the taxman all in it together".
John Cridland, CBI Director General, commented: "In some of Britain's cutting-edge entrepreneurial companies, the option of share ownership may be attractive to workers, rather than some of their employment rights. But I think this is a niche idea and not relevant to all businesses."
TUC General Secretary Brendan Barber said however: "We deplore any attack on maternity provision or protection against unfair dismissal.
"But these complex proposals do not look as if they will have very much impact, as few small businesses will want to tie themselves up in the tangle of red tape necessary to trigger these exemptions."