The Government has made significant concessions on its ‘shares for employment rights’ scheme in order to get it through the House of Lords.
The scheme, in which employees give up some employment rights in return for shares in the company they work for, has met with strong opposition from both Labour and the Liberal Democrats. It has twice been rejected by the House of Lords.
However, the Lords have now accepted it after ministers added some extra safeguards.
Employees will have to be given free legal advice before they can sign away their employment rights. This advice cannot come from a lawyer connected with the company introducing the scheme. The advice must cover the terms of the new employment status and a full explanation of what rights will be lost.
The independent legal advice must also cover issues relating to the nature of the shareholding such as whether they cover voting rights, include dividends and whether the shares can be sold.
The company must cover the cost of the advice even if the employee decides not to take up the offer. The employee will be given seven days to make a decision.
The vote by the Lords to accept the scheme means it will now become law and is likely to be implemented by the end of this year.
Please contact Charles Goodbody in our Warminster office on 01985 214444 or Chris Jolly in Westbury on 01373 865577 or email email@example.com or firstname.lastname@example.org if you would like more information about the issues raised in this article.