On 1 September, a new form of employment status is introduced. From that date, employers will be able to offer employees (existing ones as well as new ones), employee shareholder status.
An employee will be an employee shareholder if:
they agree with their employer that they will be an employee shareholder
they receive between £2,000 and £50,000 worth of shares in the company (the first £2,000 will be free of income tax and national insurance contributions)
the company gives the employee a written statement of the particulars of employee shareholder status and of the rights attached to the shares
the employee gives no consideration other than entering into the agreement.
In exchange, the employee shareholder will have to:
give up their right to claim unfair dismissal (except when the dismissal is automatically unfair or discriminatory)
give up their right to claim statutory redundancy payments
give up the right to request flexible working or time off for study or training
give 16 weeks’ notice if they want to return early from maternity, paternity or adoption leave (instead of 8 weeks’ notice for other employees).
For the agreement to be effective, the employee must receive independent legal advice after receiving the written statement and be allowed a seven-day cooling off period before the agreement is finalised. The reasonable cost of that advice is to be met by the employer.
Existing employees will be protected from detriment if they refuse to move to employee shareholder status. It will also be automatically unfair to dismiss an employee who refuses to move to that status.
People claiming jobseeker’s allowance (JSA) will not be mandated to apply for employee shareholder status jobs, so their JSA will not be reduced or stopped if they refuse to apply for such a job.
It is unclear how many employers will offer this new status as there appears to have been little enthusiasm for it except by government.