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Shares for Rights - Will the New Owner-Employee Contract be of Interest to You?

At the Conservative Party Conference, George Osborne announced that the Government will be introducing a new type of employment contract; know as an “owner-employee” contract.

The basic idea is that employees will give up some of the employment rights in return for a stake in the business they work for.  In particular, employees will be entitled to receive between £2,000 and £50,000 worth of shares in the business (and these will be exempt from Capital Gains Tax on any gains made) in exchange for forfeiting their right to claim unfair dismissal and a redundancy payment, as well as the right to request flexible working and time off for training.  Moreover, women will be required to give 16 weeks’ notice of their intention to return early from maternity leave, instead of the normal 8.

At the moment, Mr Osborne has been very coy on detail, to the point where it is impossible for us at the moment to assess whether these proposed new “owner-employee” contracts will actually become law.  The Government will be consulting later this month, with the aim of introducing the new contracts in April 2013.