Nuttall Review: Government-commissioned report suggests "right to request" employee ownership

The Government has said that it will act on the recommendations of the Nuttall Review on measures to encourage employee ownership in the private sector, including calling for evidence on how a "right to request" employee ownership could work. The Nuttall Review suggests that the right could be modelled on the existing rights to request flexible working and make requests in relation to study or training. 

The review makes a series of recommendations on encouraging employee ownership, including that a procedure giving employees the right to request employee ownership could be used to provide a "nudge" to ensure it is a more routine consideration in business. The review highlights the example of the Department for Health's "right to provide" scheme, which allows NHS and public sector social care workers to make a request to take ownership of a public sector service and run it in the private sector. 

The review suggests that a procedure for the right to request employee ownership would involve a group of employees developing a proposal for employee ownership and discussing it with their employer. The employees would have an expectation that the employer will reasonably consider the proposal and respond to it. However, there would be no "right to have" employee ownership and there would have to be an equivalent expectation that the employer can turn down the proposal. 

The principles underpinning the right to request employee ownership would be that it should:

• focus on the private sector, and cover all forms of employee share ownership;
• be aimed at encouraging discussion and information exchange, not creating confrontation between employees and their employers;
• require a sufficient group of employees to make the request;
• be "light touch" and minimise regulatory burdens;
• allow employers broad grounds to turn down requests; and
• ensure that employees who make a request are not subjected to a detriment. 

The Government will respond fully to the Nuttall Review in the autumn, setting out an action plan for the implementation of its recommendations. 

• Sharing success: the Nuttall review of employee ownership (PDF format, 1.07MB) (on the BIS website) Read the recommendations put forward in the Nuttall Review of measures that could promote the benefits of employee ownership in the private sector. 
• The employee ownership advantage: benefits and consequences (PDF format, 2.87MB) (on the BIS website) This survey of 41 employee-owned businesses and 22 non-employee owned businesses, which also draws on the published financial data of 49 employee-owned businesses and 204 non-employee-owned businesses, adds to the evidence base on the effects of employee ownership on business performance. 

Also

How should an employer go about setting up an employee share scheme? The XpertHR FAQs section answers this frequently asked question. 

Employee share schemes and employee share ownership plans The XpertHR employment law manual explains employee share schemes and employee share ownership plans.