‘Don’t rush in’ call over new employment status

By Harrison Drury

09 Sep 2013

Businesses are being warned not to rush into new ‘owner-employee’ contracts that allow staff to give up some of their employment rights for shares in the business.

The new owner-employee status came into effect on September 2 and gives employees the right to be an ‘employee shareholder’, though no-one can be forced to change employment status.

Employees must receive at least £2,000 worth of shares in their employing business to give up their rights, such as the right to claim for unfair dismissal.

However, Roger Spence, an employment lawyer at Harrison Drury solicitors in Preston says businesses need to tread with caution.

He said: “The early indications are that take up of this scheme, from both employers and employees, is going to be very low. However, any businesses thinking of giving up shares to ease the burden of employment law need to consider the bigger picture.

“Even where employees have given up some basic rights, the employment law landscape is still fraught with danger and businesses can still fall foul of discrimination laws and rules surrounding health and safety and pay.

“As well as causing confusion, business groups have also voiced fears the legislation could lead to businesses inadvertently creating a ‘two-tier’ workforce, with those unwilling to give up employment rights harbouring resentment for those who have done so and are sharing in the financial success of the business.”

Chancellor George Osborne first proposed the new status last year, suggesting owner-employee contracts would be ideal for staff at fast-growing firms.

In return for a stake in the company, an employee will give up unfair dismissal rights apart from automatically unfair dismissals, and dismissals on the grounds of discrimination and health and safety, any rights to statutory redundancy pay, the statutory right to request flexible working and rights to request training time-off. Both the individual employee and the company must both agree that the individual will be an employee shareholder. The employee must also obtain advice from a relevant independent adviser and the company has to pay for that advice, whether the individual accepts the job or not.

Latest news

1

Breck to deliver £150m of affordable homes over four years Breck Development In Progress

Breck to deliver £150m of affordable homes over four years

18 Jul 2024

2

Business board launches to support county's economic growth Lancashire Business Board

Business board launches to support county's economic growth

18 Jul 2024

3

New business support community launches in Tarleton YAB Tarlton Press Release Image.png.png

New business support community launches in Tarleton

18 Jul 2024

4

Great Harwood Rovers aims for more inclusion with 3G pitch bid GREAT HARWOOD ROVERS 3G PITCH.png.png

Great Harwood Rovers aims for more inclusion with 3G pitch bid

18 Jul 2024

5

Preston College launches new VR-led mental health course Preston College Mental Health Vr

Preston College launches new VR-led mental health course

18 Jul 2024

Bec Web Strip 980x120
Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
Lancashire Built Environment Conference
BEC 315 X 315 Px
Networking
25 Sep 2024

Lancashire Built Environment Conference

Conference and Exhibition Centre, Winter Gardens Blackpool, FY1 1HL

08:30 - 13:00

RISE - The Academy for Female Leaders and Managers
WENDY BOWERS RISE Illustrstion copy.jpg.jpg
LBV Hub Seminars
11 Jun 2024 - 04 Dec 2024

RISE - The Academy for Female Leaders and Managers

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:00 - 16:30

The Business Network Central & East Lancashire
LBV Header (10).png.png
LBV Hub Networking
18 Jul 2024 - 18 Jul 2024

The Business Network Central & East Lancashire

Mytton Fold, Langho, BB6 8AB

11:30 - 14:15

Conversations in Creativity - Creative Networking Event
Untitled design-4.png.png
LBV Hub Networking
18 Jul 2024

Conversations in Creativity - Creative Networking Event

Society1 Coworking Space, Preston, PR1 3LT

17:30 - 19:30

Lancashire Economic Breakfast
LBV Hub Seminars
18 Jul 2024

Lancashire Economic Breakfast

The Mill, St Catherine's Park, Preston, Lancashire

07:15 - 09:00

What are Menopause Action Plans & How to Write One
Menopause Action Plan 2024.png.png
LBV Hub Webinar
19 Jul 2024

What are Menopause Action Plans & How to Write One

~ Online ~, ~ Online ~, ~ Online ~

12:30 - 13:00

Business Networking in Fylde, Blackpool
Blackpool Fylde Image.jpg.jpg
LBV Hub Networking
19 Jul 2024

Business Networking in Fylde, Blackpool

Village Hotel Blackpool, Blackpool, FY3 8LL

07:30 - 09:30

Preston Freelancer MeetUp and Coworking Day
Screenshot 2024-06-13 at 13.55.10.png.png
LBV Hub Networking
30 Jul 2024

Preston Freelancer MeetUp and Coworking Day

Society1 Coworking Space, Preston, PR1 3LT

10:00 - 12:00

Scaling your revenue: From zero to £1m in 60 months
CBP-logo LBV.png.png
LBV Hub Webinar
31 Jul 2024

Scaling your revenue: From zero to £1m in 60 months

Online, Online, Online

08:00 - 09:30

Chamber Breakfast Networking
Chamber Logo1.png.png
LBV Hub Networking
31 Jul 2024

Chamber Breakfast Networking

Pye Motors, Morecambe, LA3 3PF

08:00 - 10:00

Online Women's Health Clinic
clinic.png.png
LBV Hub Webinar
06 Aug 2024

Online Women's Health Clinic

x, Online, x

12:00 - 12:00

International Coworking Day Open Day
1.png.png
LBV Hub Social
09 Aug 2024 - 09 Aug 2024

International Coworking Day Open Day

Society1 Coworking Space, Prestin, PR1 3 LT

10:00 - 13:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV116 Online Graphic
Subscribe now

Weekly news bulletin