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Eversheds comment: UK MPs vote in favour of employee ownership scheme

  • United Kingdom


    Today it fell to the House of Commons to decide whether to resuscitate the concept of employee ownership, following the House of Lord’s recent vote to exclude the clause seeking to introduce the new employment status from the Growth and Infrastructure Bill. Since the Lords last voted on this, the Government has said that they will make it clear in guidance that someone won’t lose job seekers allowance if they turn down a job offered only on an employee shareholder basis. Originally the Government said unemployment benefits wouldn’t be withdrawn provided there was a good reason for turning down such a job. This change of position addresses some of the concerns raised in House of Lords debates and could well be enough to swing the vote in the Government’s favour.

    Simon Rice-Birchall, partner at global law firm Eversheds comments:

    “Today, the House of Commons has voted to reinstate the employee ownership clause. The Bill will therefore return to the Lords. If their Lordships agree to the inclusion of the clause, employee owners will become reality.

    “The government proposes that all sizes of businesses will be able to offer new starters and current employees the option to become an employee owner instead of an employee. Those individuals will similarly be able to elect whether or not to take up that offer. Employee owners, who will own between £2000 and £50,000 of shares, will effectively waive their right to claim unfair dismissal, to be paid a statutory redundancy payment, to request training or flexible working under the statutory scheme. Employee owners will also have to give their employers longer notice of return from maternity or adoption leave.

    “Employee owners will still be able to bring an unfair dismissal claim from day one of their employment if the reason for the dismissal is one of the automatically unfair reasons, which include whistleblowing or taking maternity leave. They will also have a right to bring a claim if they allege that their dismissal was discriminatory. In addition, some of the potentially most costly and damaging claims, such as discrimination claims other than those arising out of a dismissal and working time, cannot be avoided as these are rights guaranteed by EU law. These may well create difficulties for the unwary employer.”


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