As recently reported the government has given their response to the consultation on implementing the new employee ownership status. The response contains an analysis of the employee ownership scheme, and addresses the numerous concerns raised by the respondents when the announcement was made by the Chancellor back in October 2012.
Despite a large majority of the responses received being negative, the government will be implementing the policy on a voluntary, “take-it-or-leave it”, basis. However, no date has been proposed as to when exactly this will be.
The employee ownership scheme will be rolled out with the following amendments:
- The status given to employees who take up this incentive will now be “employee shareholder”.
- All shares transferred to the employee shareholder will be fully paid up and be issued free of charge.
- The current minimum value of shares (£2,000) will be increased at the discretion of the Secretary of State but not decreased.
- Employees will be issued with shares worth between £2,000 and £50,000. However this is not intended to exclude employees with more than £50,000 worth of shares from their new employment status. The current £50,000 cap however will still relate to the capital gains tax exemption.
- Non-UK registered companies will also be able to benefit from the new employee shareholder status.
- The change to paternity leave notice period will be mended to fall in line with maternity and adoption leave (16 weeks).
Shares will be able to be issued from both the employing company and its parent company to the employee shareholder. Subsidiary companies however will be unable to issue qualifying shares for an employee shareholder in order to restrict scope for abuse.
In its response the Government has also revealed that individuals who currently receive Jobseekers Allowance would have to accept reasonable offers of work on an employee shareholder basis unless they have a good reason for refusing. Failing to provide a good reason to refuse such a job would result in benefits being lost for up to three years. Such cases will be reviewed and analysed on a case by case basis.
Concern has been raised that the new employee employment shareholder status would impact negatively on the number of discrimination and other types of tribunal claim. The government has proposed that they will monitor the impact of the new status on an ongoing basis.