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New plans announced for employee share ownership

The Government has announced a plan to introduce a new employment contract that will encourage the idea of the employee-owner. It would give employees the option of owning shares in the company they work for in return for some of their employment rights. This stake in the company would be exempt from capital gains but would require the employee to give up certain maternity rights, and the right to claim unfair dismissal.

While this would be optional for current employees, it could be made compulsory for new workers and come into force as soon as April 2013. The Deputy Prime Minister, Nick Clegg, who called the concept, “responsible capitalism”, first touted the idea of ‘shares for rights’ earlier this year. He believes the idea is much under-used since it would give employees a real stake in the success, or failure, of their companies and could in his words, “unlock growth”.

The plans, however, could be in breach of European directives to protect workers in this country and this would have to be explored. Nonetheless, there has been support from UK business that sees the idea as a way to deregulate the employment market and make it easier for small businesses to hire and let go of their employees. For those concerned about the new rules, a good contractor accountancy service can help the small business owner take best advantage of them. According to a number of SME CEOs, the idea could be a win-win for both business owner and employee.

Posted by Louise
October 15, 2012
Small Business

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