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Employment

Employee Ownership

Notwithstanding an overwhelmingly negative response to its consultation, the Government has announced that it intends to press ahead with plans to introduce “employee shareholders”.

The basic premise of the scheme is that employers issue fully paid up shares to employees with a real, minimum value of at least £2000. In return, the employee forfeits the right to certain employment rights, in particular the right to claim unfair dismissal.

The Government has said that they do not intend to issue further regulations pertaining to the scheme, as they are concerned that this would negatively impact on existing share schemes and the flexibility of employers
and potential employee owners to negotiate arrangements. They have, however, promised further clear guidance regarding the status for both companies and individuals.

Whilst the scheme is expressed to be voluntary, the Government has made it clear that jobseekers refusing to accept a job offered on this basis will lose their entitlement to benefits, so the scheme may only be voluntary on a take it or leave it basis.

How helpful this scheme will be to employers remains doubtful. Employees will retain the right to bring certain claims such as discrimination, and it is widely assumed that such claims will rise if the right to claim unfair dismissal is removed.

Further, the Government has stipulated that any dispute over the value of the shares will be dealt with by the employment tribunals, a body which has no experience in the valuation of shares.

Quite what the value of the scheme to employers will be is unclear. Whilst share ownership may engender a stronger sense of loyalty, there are already such share schemes in existence. It is unlikely the overall number of
claims may fall and the unlucky employer may find themselves embroiled in a lengthy and complex share valuation dispute.

If you have any questions which relate to any aspect of employment law, please just e mail us at info@lifeandlegal.com or call us on 0845 6434282.

We would be delighted to answer your questions or put you in touch with our own Employment law specialists.

By |January 15th, 2013|Employment|Comments Off on Employee Ownership

Be Careful What You Say

In Publicis Consultants v O’Farrell, an employee entitled to three months’ notice was dismissed with 4 days payment.

The dismissal letter did not state that she would receive her notice but stated that she would receive an ex gratia payment equivalent to three months’ salary.

She brought a breach of contract claim for her 3 months’ notice period.

The employer argued that the ex gratia payment was actually made in respect of the notice period. The Tribunal and EAT disagreed. They found that the payment was an ex gratia payment and that the employer was in breach of contract. Even if there had been any ambiguity, as it had been the employer who had drafted the letter, the interpretation of the letter would still have been in the employee’s favour.

When dismissing employees therefore with notice pay, be careful to make it clear what the payment refers to!

If you have any questions which relate to any aspect of employment law, please just e mail us at info@lifeandlegal.com or call us on 0845 6434282.

We would be delighted to answer your questions or put you in touch with our own Employment law specialists.

By |August 11th, 2011|Employment|Comments Off on Be Careful What You Say

The Bribery Act 2010

The Bribery Act 2010 comes into force today. The Act creates several new offences carrying a maximum penalty of ten years’ imprisonment or an unlimited fine for which employees, directors and commercial organisations can be liable.
The Government stated that is does not intent that genuine hospitality or similar business expenditure that is reasonable and proportionate be caught by the Act.

By |July 11th, 2011|Employment|Comments Off on The Bribery Act 2010
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