Employee-shareholder status becomes law

Law and Labour — Fri, 26 Apr 2013 09:03:29 +0000

The legislation required to introduce employee-shareholders has finally become law. This means the Government can proceed with its plans to introduce employee-shareholder contracts from 1 September 2013.

The provisions to introduce employee-shareholder status were contained in the Growth and Infrastructure Bill. The House of Lords had twice voted to reject these provisions, therefore the Government had to make a number of concessions in order to get the Bill passed.

The concessions include the following:

Employers must provide a written statement giving details of the employee-shareholder status. The statement should also specify which employment rights are being given up. Employers must provide a written statement containing full details of the shares and the rights they carry. The individual must receive independent legal advice, paid for by the employer, prior to entering into the employee-shareholder contract. There will be a seven-day “cooling off” period during which the acceptance of an offer of employee-shareholder status will not be binding. Benefits will not be affected if a jobseeker chooses not to become an employee-shareholder. Existing workers will be protected from a detriment if they refuse to switch to an employee-shareholder contract.

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Employee-shareholder status becomes law