Over simplistic to think employees will sign rights away

Collyer Bristow employment partner Tania Goodman questions the political motivation behind the Conservative’s ‘rights for shares’ proposals

Staff recruited from 6 April 2012 do not have the right to bring an unfair dismissal claim until they have been employed for two continuous years, which allows the employer a long time to assess their suitability and could diminish enthusiasm for the proposals.

It will be tricky to change primary legislation disentitling some employees from basic employment rights.

There is no detail yet about how the share mechanism will work when an individual leaves employment or any indication of how employees will be protected from unscrupulous employers unfairly dismissing staff without any comeback.

Is it over-simplistic to think that people will be happy to sign their rights away in an uncertain job market for shares that may not ultimately have any real value?

Will flourishing companies have an appetite to issue shares diluting existing equity?

For smaller and less well established companies there is inevitably going to be an administrative cost involved at a very early stage in the employment relationship before an employee’s suitability for the job has been determined.

This all begs the question about the political motivation behind the proposed changes.

Without a detailed analysis, are the headlines a perceived vote winner from graduates unable to find work and businesses feeling shackled by the perils of employment law?