A new employee shareholder scheme is currently being debated by parliament. The idea is an employee is given shares worth between £2000 and £50,000 in their employer which is exempt from Capital Gains Tax. In exchange an employee will give up certain employment law rights including, redundancy pay, the right to claim Unfair Dismissal, right to request flexible working and notice periods to be given in terms of maternity leave.
Proposals have been criticised by the House of Lords and many questions remain unanswered, including what happens if the Employer goes into administration or how the shares for a private limited company will be valued. It is unclear the effect TUPE may have on an Employer Shareholder as presumably they cannot there shares into a new employer but it would be unfair to change the terms and conditions of the employee if TUPE does apply.
Whether the proposals will become law has yet to be seen but it is clear number of practical, commercial and legal issues will need to be overcome before employers are able to start offering the scheme.
Andrew is a Commercial & Employment Law solicitor in Leicester. Our Solicitors in Leicester are experts in their fields and dedicated to quality client care. If you would like to find out more about our solicitors in Leicester please contact us.
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