Employee shareholders

In a letter to members of the House of Lords, where the Growth and Infrastructure Bill (which includes the employee shareholder proposals) is currently at the Committee stage, Law Society president Lucy Scott-Moncrieff said that proposals to offer employee ownership to workers in return for the forfeiture of employment rights should be deleted from the Bill.

The government said the aim of the new status is to boost employee engagement and productivity and to remove the perceived barriers around the fear of being taken to employment tribunal, which the government says is deterring businesses from recruiting.

However the Law Society is concerned that small businesses, who are the prime target audience for this proposal, will be put off by the complex tax, company law requirements and extra costs.

Ms Scott-Moncrieff said:

“There is potential for costly litigation on a range of complex issues which are likely to arise when an employee shareholder leaves, which runs counter to the government’s stated aim of supporting small and medium sized enterprises through simpler regulation.”

There has been wide-spread criticism that the government only allowed a three week period in which to respond to its consultation on the complex employee shareholder proposals.