Employees to swap employee rights for company shares
The government’s Employee Shareholder Scheme came into force on the 1st September; the ‘Share Right’ scheme allows workers to waive certain rights – such as the ability to claim for unfair dismissal – in exchange for company shares worth between £2,000 and £50,000.
Employee shareholders still have the right to claim sick pay, maternity leave, time off for emergencies and paid annual leave but would be giving up rights including:
- Most unfair dismissal rights
- Statutory redundancy pay
- Flexible working rights – except for in the two week period after a return from parental leave
- Certain statutory rights to request time off to train.
If you have “key employees” who you want to retain, who would never need to call upon the employees lost rights this new company share scheme is a great way to incentivise your employees.
There are tax reliefs available to employees which the government hope will encourage the take-up of the scheme. Anyone can apply for an employee shareholder position although workers cannot be forced to accept the status if they do not want to.
If you are unsure how this affects you or have any questions, get in touch with our Tax team or call 0161 249 5040 to find out more.