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Law for Business

Knowhow - guidance - precedents

07 MAY 2013

Employee Owner Status - where are we now?

Pam Loch

Managing Partner


The House of Lords have finally approved, after concessions, the employee owner proposals contained in the draft Growth and Infrastructure Bill, introduce in Autumn 2012.

The proposal involves creating a third type of employee status (in addition to employee and worker) - an ‘employee shareholder'. It has been subjected to comprehensive debate in both Houses of Parliament. Having been rejected by the House of Lords twice it has now been approved, and planned implementation is intended to be September 2013.

Under the proposals, employee shareholders would give up some of their basic employment rights in exchange for shares in their employer.  The first £2,000 of the shares would be NI and income tax free, and any growth in the value of the shares up to £50,000 exempt from capital gains tax.

The rights to be relinquished would include the right to request flexible working, the right not to be unfairly dismissed and the right to request a redundancy payment.

Other rights such as the right to claim unlawful discrimination would not be given up. In a final concession to gain approval the Government has agreed that employees should be entitled to receive free employer funded independent legal advice prior to entering into an employee shareholder contract.


Pam Loch, Managing Partner of niche employment law practice, Loch Associates Employment Lawyers and Managing Director of HR Advise Me Limited.  

For more information on Loch Associates Employment Lawyers please go to www.lochassociates.co.uk and for HR Advise Me go to www.hradvise.me


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