George Osborne, the Chancellor of the Exchequer, recently announced the introduction of a new form of employee – the “employee-owner”.

Much like mythological creature the minotaur – who was part-man, part-bull – this new entity will be neither one thing nor the other.  Instead, familiar and recognisable parts of the employee will be sacrificed to create a new hybrid.

It is proposed that the employee will give up statutory rights on unfair dismissal, redundancy, the right to request flexible working, and the right to request training.

However, in return the employer will grant the employee shares in its company, worth from £2,000 to £50,000.  These shares will be exempt from capital gains tax.  Sounds great. But is it?

Osborne’s proposals are primarily aimed at smaller, fast-growing companies that want to utilise a flexible employment arrangement.  But such firms might be put off by the complicated shareholding agreements and tax breaks the arrangement will require.

Employees should think carefully before discarding statutory rights developed over decades in return for shares whose value may be uncertain.  In a worst-case scenario if the company were to fail they might be left with worthless shares and no redundancy pay.

The proposed changes span a raft of contractual and employment law, which the Government must consider and amend in order to give life to the employee-owner arrangement.  The scope of these changes might prove too extensive to implement.

The minotaur met an untimely end after having languished in a dungeon for the majority of its brief life.  It seems likely that the Government’s hybrid creation might suffer a similar fate if its implementation is not properly thought through.

Details of how the employee-owner arrangement will work in practice are yet to be fleshed out, but the Government is rushing to introduce the entity by April 2013.

Photo: Dagrappler, Minotaur at Athens Archaeological Museum