Employee shareholders: the basics

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A new employment status intended to encourage small and medium-sized businesses to take on staff was proposed by the government last year. Following a short consultation the legislation incorporating the changes is now making its way through parliament.

Clause 27 of the Growth and Infrastructure Bill 2012-13 (the Bill) currently contains the provisions introducing employee shareholders (originally dubbed “employee owners”). The controversial proposals provide for employees to give up certain employment rights in exchange for shares in their employer. The proposals have been rather unenthusiastically received so far with commentators critical and various questions outstanding about how this will work in practice, for example, what will the position of employee shareholders be on a TUPE transfer?…

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