The House of Lords has voted (by 232 to 178) to strike down clause 27 of the Growth and Infrastructure Bill, which is the clause introducing the concept of employee shareholders, a new type of ‘employee owner’ contract that we discussed in our November 2012 newsletter.
Kate Fretten, Employment Partner, says "This comes hot on the heels of the announcement in last week's Budget that employee shareholder contracts will come into force on 1 September 2013 - an announcement which may have proven premature."
The Bill will now return to the House of Commons, where the government will decide whether to accept the defeat (in which case employee shareholder contracts will not happen), or try to re-introduce the clause. It is rumoured that the Liberal Democrats are against employee shareholder contracts, and the result of a vote in the Commons is uncertain.
Get in touch if you need more information on this topic. You should find the other articles in April's employment newsletter of interest.
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