Osborne's surprise announcement of 'owner-employee' contract proposals
Chancellor George Osborne said in June 2012 that creating "more pro-business employment law" represents a key plank of the Coalition Government's strategy to boost recovery.
In his Conservative party conference speech earlier this month, Osborne made a surprise announcement of a new and radical proposed change to employment law.
Osborne announced proposals for a new type of "owner-employee" contract of employment.
XpertHR reports that "under the proposals, the Employment Rights Act 1996 would be amended to create a third tier of employment status: employee owners, who would receive shares of between £2,000 and £50,000, exempt from capital gains tax, in return for giving up specified employment rights."
- Click here for full details of the employment rights that "owner-employees" would give up.
XpertHR reports that the Coaliition Government has stated that "legislation will be brought into force to allow employers to use this type of contract from April 2013."
It remains to be seen if we can expect Osborne to make any further employment law-related announcements in his Autumn Statement on Wednesday 5 December 2012.
Reactions to the 'owner-employee' contract proposals
Reaction to the "owner-employee" contract proposals has been mixed, but generally negative:
- XpertHR's Tribunal Watch blog provides an excellent overview of Twitter reactions from the UK employment law community.
- Two-thirds of respondents to a YouGov poll say it would be a "bad idea" to allow the "owner-employee" contract proposals to come into effect. Only one in five thought it would be a "good idea."
- Employment law expert and XpertHR author Karen Teago presents a great round-up of official and unofficial reactions to the proposals (both positive and negative), and also includes her own views on this topic.
- The proposals were welcomed by a number of entrepreneurs in a letter to the Telegraph: "The scheme will mean that more highly mobile entrepreneurs setting up exciting innovative businesses will choose to locate them in Britain rather than in countries such as America, which until now have had more flexible labour markets."
- The IoD welcomed Osborne's announcement as an "innovative proposal on employee ownership."
What do you make of the 'owner-employee' contract proposals?
I'm interested to find out XperHR readers' views on this topic.
You can leave a comment via the box below, or contact me directly via Twitter, LinkedIn or Google+.
'Owner-employee' contract proposals: Have your say in the BIS consultation (closing 8 November 2012)
You can take part in the official consultation on the "owner-employee" contract proposals - but you'll have to act quickly.
BIS has published a Consultation on implementing employee owner status.
The consultation closes next week (Thursday 8 November 2012).
Nick Clegg to announce separate 'right to request' share plan concept this week
The Independent reports that Deputy Prime Minister will tomorrow (Tuesday 30 October 2012) unveil his concept for a "right to request" share scheme, intended to help "create a "John Lewis" economy by fleshing out a scheme that could let staff buy shares in the company they work for."
The Independent says:
The Deputy Prime Minister's "right to request" plan is a central plank in creating more employee or trust-owned businesses such as the revered department store group or the engineer Arup, where staff take a share of profits every year.Clegg is "also expected to announce the creation of an Institute of Employee Ownership to advise firms on how to spread more equity among the workforce."
The Independent report stresses that Clegg's "plans are separate to those of George Osborne," to introduce "owner-employee contracts."
- Is the Coalition Government waging a 'war on how we work'?
The Coalition Government's approach to employment law reform could also be viewed as a "war on how we work", argues Sunday Telegraph Business Editor Kamal Ahmed. Ahmed says that these reforms are ultimately intended to enshrine a view that - at its simplest - "employers should be allowed to get on with managing their companies."Here we take a look at recent employment law reform proposals and consider how they relate to Ahmed's theory and assess the potential impact of some of these proposals on economic growth.
- Government announces new type of "owner-employee" contract of employment and Government launches consultation on "employee-owner" status
XpertHR provides full details of the proposals.
- Consultation on implementing employee owner status
Take part in the official consultation on the proposals, via the BIS website.
- No capital gains tax on employee share ownership for new employee-owners
The official announcement on the BIS website.
- Beecroft report was inspired by 'hopeless' HR director, says Telegraph and Replace right to claim unfair dismissal with Compensated No Fault Dismissals, says leaked report commissioned by David Cameron
XpertHR reports on venture capitalist Adrian Beecroft's proposals for radical employment law reform to boost economic growth.
- Could opposition to radical employment law reform move up the union agenda? XpertHR reports.
- Changing patterns of employment & employment law reform: A double whammy for UK workers?
Changing patterns of employment and the impact of the Coalition Government's ongoing programme of employment law reform mean that many UK workers find themselves in an increasingly less secure position.