Shares for rights – it is going to happen!
If you have not been following the passage of the Growth and Infrastructure Bill through parliament you may not know that Clause 27 of that Bill contains a proposal to introduce the “employee shareholder” status whereby employee shareholders will relinquish certain statutory rights in return for shares in their employer with various tax breaks.
Additionally you may not know that on 22 April 2013 the House of Lords defeated Clause 27 outright on various grounds including that it was wrong for employment rights to be capable of being bought and sold.
Yesterday, in the House of Commons, the vote to reintroduce the employee shareholder proposal was passed which means that this controversial legislation now goes back to the House of Lords where the fate of Clause 27 will once again be debated by peers.
Since the House of Lords rejected the proposal first time around, the Government has made one concession intended to emphasise the voluntary nature of the new employment status, by dropping proposals to penalise job seekers allowance claimants who rejected employee shareholder jobs.
It is worth quoting what the Minister of State at the Department of BIS (Michael Fallon) said yesterday:
“British companies are competing in a global race to increase their competitiveness and create wealth. What is at stake here is choice and a new status that companies can use to give themselves a competitive advantage…That is why the Government want to create a new employment status – to promote enterprise and aspiration…Much has been said about the new employee shareholder status…The Government have always been clear that this measure is voluntary for both individuals and companies to use if it suits their circumstances or business needs.”
The language deployed here is defiant and it would be astonishing if the House of Lords continued to reject this measure. Together with the political capital that George Osborne has invested in this measure being passed, employee shareholder status is almost certainly going to happen with effect from 1 September 2013.