Employees lose UK employment law rights under ‘owner-employees’ scheme

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Employees will be requested to give up some of their employment rights in exchange for shares of the company they are working for. This comes under a new ‘owner-employee’ contract scheme which was announced by Chancellor George Osborne at a Conservative Party conference this week. He hopes that the scheme will benefit ‘fast growing’ small to medium-sized businesses.

In exchange for employees losing such UK employment law rights as unfair dismissal, they will receive shares in the company ranging from £2,000 to £50,000. This scheme would be completely optional for current employees, but businesses would have the option of making it mandatory for new employees hired from April 2013.

Under the ‘owner-employee’ contract scheme, employees would not be able to raise issues of unfair dismissal, redundancy, or request flexible working time. Additionally, female employees would be required to provide 16 weeks’ notice of their return date to work following maternity leave; this is double the current notice required.

‘Get shares and become owners of the company you work for,’ said Chancellor Osborne. ‘Owners, workers and the taxman, all in together. Workers of the world unite.’

The proposal was greeted with enthusiasm by Simon Walker, the Director General of the Institute of Directors. He said that the scheme would ‘reduce the employment law burden on companies and make employees better off at the same time.’

However, Brendan Barber, General Secretary of the Trades Union Congress (TUC) – a federation of trade unions in the UK – was against the proposal:

‘We deplore any attack on maternity provision or protection against unfair dismissal,’ he said, ‘but these complex proposals do not look as if they will have very much impact as few small businesses will want to tie themselves up in the tangle of red tape necessary to trigger these exemptions.’

Further consultation is expected from the Government through October with the scheme set to be introduced early next year.

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