The Chancellor of the Exchequer, George Osborne, announced earlier this month the introduction of a new type of employment contract, known as an ‘owner-employee’ contract.
Under this new type of contract, employees will give up their UK rights on unfair dismissal, redundancy, and the right to request flexible working and time off for training, and will be required to provide 16 weeks’ notice of a firm date of return from maternity leave, instead of the usual 8 weeks. In exchange, they will be given between £2,000 and £50,000 of shares that are exempt from capital gains tax.
Kate Fretten, Employment Partner, says “Legislation to bring in the new owner-employee contract will come later this year so that companies can use the new type of contract from April 2013. The Government will consult on some details of the contract later this month.”
Initial reaction to the announcement has been mixed to say the least. We share the opinion of many others that it is doubtful whether this proposal will get off the ground. It may be unpopular with employees because the chances of benefiting are so slim, and unpopular with employers, especially privately controlled companies, because of the risks imposed to their share structure.
For a free initial meeting please call 01202 499255 and Kate or Paul will be happy to discuss any questions you may have.
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