Yesterday, George Osborne announced that the Government will be introducing a new type of employment contract, known as an “owner-employee” contract.
The basic idea is that employees will give up some of their employment rights in return for a stake in the business they work for. In particular, employees will be entitled to receive between £2,000 and £50,000 worth of shares in the business (and these will be exempt from capital gains tax on any gains made) in exchange for forfeiting their right to claim unfair dismissal and a redundancy payment, as well as the right to request flexible working and time off for training. Moreover, women will be required to give 16 weeks’ notice of their intention to return early from maternity leave, instead of the normal 8.
At the moment we are very light on detail, to the point where it is impossible to tell whether these new contracts are a runner or not. The Government will be consulting later this month, with the aim of introducing the new contracts in April 2013.