Waiving rights for shares – are you affected?
A new employment status has come into force that allows employees to give up some of their rights in exchange for company shares.
Anyone can apply to be an ‘employee shareholder,’ under the new rules, although no-one can be forced to change their employment status.
If you are currently an employee, to qualify, you must receive at least £2,000 worth of shares. In exchange, you will give up certain rights, such as the ability to claim unfair dismissal (apart from on grounds of discrimination or health and safety), statutory redundancy pay and requests for flexible working.
The Chancellor set the ball rolling for the new status last year, believing that owner-employee contracts would be the way forward for fast-growing firms. But, so far, there’s been little interest from businesses and employees.
It seems that the legal sector, as one example, fears it could create a two-tier workforce, distancing staff who hold a stake in the company from employees who retain their traditional employment rights.
It’s been suggested that introducing this legislation is taking Britain back to pre-1963, before statutory employment rights were introduced. So, if you are an employee facing this decision, you should consider the risks before joining the scheme.
Tax implications exist for both you and your employer, so make sure you receive advice from an independent adviser. (The company has to pay for that advice, whether or not you accept the job.)
As recruitment specialists in the financial field, we have a strong professional network, and we’ll be happy to introduce you to an adviser if you don’t already know someone. Or, if you’re seeking a new job and you want to find out more about this employee shareholder status, feel free to give us a call and we’ll chat through your options.