Employee Ownership “possibly illegal”

21 November 2012

The Committee Stage of the Growth and Infrastructure Bill continued in the House of Commons yesterday (20 November), with further questions about the government’s plans to introduce a new status of worker – an employee owner.

Appearing in Clause 23 of the Bill, the Employee Ownership scheme would see workers offered shares in the company they work for in exchange for fundamental employment rights like the right to claim unfair dismissal and redundancy rights.

During the fourth evidence session, member of the Institute of Employment Rights and Head of Equality and Employment Rights at the Trades Union Congress (TUC) Sarah Veale told parliament it is “possibly illegal to expect people to contract out of their statutory rights”. She added that the TUC consider the proposals as simply being a way of getting Adrian Beecroft’s recommendations for “no-fault dismissal” passed into law – an argument Roger Jeary made in a recent blog for the IER. Both Sarah Veale and the Chief Executive of Working Families Sarah Jackson called on the government to drop Clause 23 entirely.

Sarah Jackson also expressed concern that employees may feel pressured into swapping their employment rights for shares, and negatively affected if they refuse to take up the offer. Additionally, with flexible working rights being one of the rights workers would be forced to give up under the scheme, she argued women will be disproportionately affected by the plans. Sarah Jackson also highlighted that the legislation seems to be have been put together very quickly, with the very short three-week consultation period not even having reached completion before the Clause was discussed as part of the Growth and Infrastructure Bill in the House of Commons.

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