Yesterday (24 April), the government introduced yet a further concession into the Growth and Infrastructure Bill and, last night, the House of Lords voted to accept the clause (having rejected it twice). Employee Shareholders will now become law - Royal Assent is expected today and BIS intends to implement this new, third, type of employment status in autumn 2013.
The further concession is that an agreement that someone shall become an employee shareholder is invalid unless, prior to entering into the contract, the individual has received advice from a relevant independent advisor (ie a lawyer, CAB, law centre, union etc). Further, the employer has to pay the reasonable costs of that advice - whether or not the employee then accepts the role - if they would otherwise have been payable by the employee. Doubtless unions will now start charging fees for advising on employee shareholder status, and look for those fees to the employer.
If the employee does not receive independent advice before agreeing to become an employee shareholder, then s/he will be an ordinary employee.
This concession is in addition to earlier concessions, namely:-
- there will be a seven day 'cooling off' period, during which any acceptance of employee shareholder status will not be binding
- employers must provide a written statement with full details about the shares and the rights they carry
- any jobseeker who refuses an offer with employee shareholder status will not forfeit their social security benefits
- the first £2,000 of shares will not attract income tax
- existing workers will be protected from detriment if they refuse to switch to an employee-shareholder contract
Laurie Anstis of Boyes Turner has put together an excellent timeline of employee shareholders, from proposal through to enactment.
And best comment of the day goes to barrister Sean Jones QC, for his comment on Twitter