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George Osborne Announces Proposals for Employees to Swap Employment Rights for Shares

At the Conservative Party Conference this week, the Chancellor, George Osborne, announced proposals under which employees would give up some of their employment rights in exchange for shares in their employer worth between £2000 and £50,000, with any growth in the value of these shares being exempt from capital gains tax.

The government plans to consult on the proposals this month and aims to publish legislation later this year that would see the arrangement coming into force in April 2013.

Amidst all of the other hype surrounding the Tory Party conference and higher profile news stories, this announcement appears to have gone unnotices in the main, with only a few minor comments being made in the press so far.

It comes close on the heels of the government's recent climb down from the 'no fault dismissal' proposals outlined in venture capitalist Adrian Beecroft's report on employment reform which were only backed by a third of firms according to the BIS.

It is unclear whether these latest proposals are part of the government's ongoing efforts on employment law reform and an attempt to re-introduce their failed no fault dismissal proposals using a different approach, or are instead connected with the government's review of employee ownership that was carried out earlier this year.

Whatever the reasons behind these latest proposals, does the government really believe that business owners would genuinely be interested in relinquishing shares in their business in order to reduce the employment rights of their employees?

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