The reinstatement of a scheme that will enable businesses to offer employees shares in return for reduced employee rights has received the backing of MPs.

The employee shareholder proposal was originally outlined by chancellor George Osborne as part of the Growth and Infrastructure Bill, but was defeated following a House of Lords vote.

However, the proposals, which would see companies remove some employment rights, including those concerning redundancy, for at least £2,000 in shares, have now been passed by MPs by a margin of 277 to 239.

According to business minister Michael Fallon, the scheme will be "wholly voluntary", while people on Jobseeker's Allowance will not be penalised for refusing to opt in to the initiative.

The scheme has been met with criticism in many circles, however, with Frances O'Grady, general secretary of the TUC, claiming employee benefits and employment rights "should not be for sale".

"Employers do not want to buy them, and employees will not want to sell them. What is worse is that its only real practical use is as a tax dodge," she added.

How could people on JSA possibly opt in to such a scheme if they have no job to begin with?

Dazed and c0nfuz0r3d.

thanks WUB. I had heard about this farce.

But I looked into the source:Thomsons Online Benefits
en.wikipedia.org/wiki/Thomsons_Online_Benefits
Their CEO wrote this article about the budget.
bdaily.co.uk/technology/21-03-2013/budge...tfield-ceo-thomsons/

You might find it interesting

But I can't find any MSM coverage of this at all, despite the fact that numerous newspapers reported on the original vote being defeated.

George Osborne has invited employees to give up their workplace rights in exchange for owning tax-free shares in their companies.

In a speech which was greeted with luke-warm applause at the Conservative Party Conference in Birmingham, the Chancellor jokingly borrowed the Marxist slogan "workers of the world unite" to launch his new scheme.

The plan effectively involves workers gambling on their career prospects, by sacrificing their protection against unfair dismissal and other rights in return for profits on company shares which will be free from capital gains tax.

David Poole, UK director at the Employee Share Ownership (Esop) Centre, criticised Chancellor George Osborne’s stance on employee share schemes.

Speaking at Employee Benefits Connect, Poole said he was worried that all the government departments involved in the employee share ownership agenda would head in different directions.

“If the communication between those departments isn’t up to scratch, you risk everyone tripping over each other and nothing being achieved,” he said.

Poole (pictured) also criticised Osborne’s 2012 announcement that staff could trade employment rights for shares in their organisation, saying it has distorted employees’ views of share schemes.

“I don’t think it’s been helpful, particularly with the press coverage and the idea of employee ownership being associated with an idea that perhaps isn’t what most people thought employee share ownership was,” he said.

“We have been working with trade unions and, having come through a very long journey towards ‘OK, we’re warming to the idea’, now [share ownership] is seen as a negative again.

“Share ownership is apolitical, but is now attached to quite a political idea.”

After the April issue of Employee Benefits went to press the employee ownership scheme was blocked by the House of Lords.

The government has also confirmed that it will support the creation of a UK Employee Ownership Day on 4 July.

Nick Clegg, deputy prime minister, said: “I want to see employee-owned firms hardwired into the British economy and I welcome the Employee Ownership Association’s ambitious plans for growth, outlined in the new guide to employee ownership published today.

“Up and down the country, across public and private sectors, people-centered workplaces are contributing more and more to the economy and, through tough economic times, these firms can outperform others.

“I want to go further, which is why, from April next year we’ll inject £50 million into the sector, making it easier for staff to take over the running of [organisations] and for new firms to set up under employee-owned models.”

Jo Swinson, minister of employment relations and consumer affairs, added: “The EOA has set a bold and challenging target for businesses.

“The evidence shows that employee ownership can make an important difference in building a stronger economy and a fairer society.”

Ian Hasdell, chief executive officer at the EOA, said: “It is very positive that [Clegg] is endorsing the economic business case for more employee ownership set out in the new report.

“Employee ownership in the UK is growing and the businesses concerned thriving, because they enhance the working conditions and entitlements of employee owners. Clearly, what our members wish to see is the translation of these helpful words of support into bold practical action from government, particularly on taxation, that will help to deliver on our mission to increase the contribution of employee ownership to 10% of UK GDP by 2020.”

Michael Thompson, chief executive of employee-owned Childbase Partnership, added: “The evidence is undeniable: organisations that put employee wellbeing and collaboration at the centre of their operation reap the benefits of increased productivity and quality.

“That these results have been achieved by employee-owned organisations in the midst of recession, and in spite of current restrictions, makes a compelling case for government action now to support the process.

“The reality is that without incentivised support for entrepreneurs and their employees to pursue co-ownership, few will be willing to take the financial risk of drastically changing their company structures and practices.”

wake_up_bomb wrote:
I think I remember learning about it on RT.

But the whole story has been squashed in the MSM: back door legislation forced through.

It just means that employees will lose what little legal rights they have left.

So if I can exchange rights for more shares, can I exchange shares for more rights?

No?

Thought not.

Obviousl con coming: company directors know that the company is going bust alla HMV and start offering emloyees to this. When they go into administration, the shares will be worth FA- and there will be no redundancy payments?

played

I would imagine the banks would deffo want to take advantage of converting redundancy pay into shares because their shares are obviously worth jack shit and they are obviously going to fire shitloads more staff yet.

It's quite interesting doesn't Mondragon operate in a similar way as an employee owned company?

Mondragon also has something to teach other cooperatives in its approach to capital, always an issue for businesses not using equity-based capital markets. Employee members are required to make a financial investment in their business, typically of €14,000, which is automatically deducted from salary over the first three or five years of their membership. Profits paid across to members are also retained in the cooperative, being distributed only at retirement or if a member of staff leaves. Interest on members' capital is paid, however, when businesses are profitable.

Mike wrote:
Nice try.

Mondragon does not trade pensions/redundancies off for shares.