Britain's Chancellor of the Exchequer, George Osborne, has announced that workers will be offered shares in their companies in return for giving up their legal rights at work.

From April next year, companies will be able to offer existing staff between £2000 ($3902) and £50,000 ($97,550) in tax-free shares if they surrender their rights to claim unfair dismissal, to redundancy pay, to request flexible working and time off for training. Women on maternity leave would have to give 16 weeks' notice of returning to work, rather than eight weeks as at present. In return, these workers would not pay capital gains tax on any rise in the value of the shares when they sold them.

New firms could make such contracts compulsory. People working for existing firms could not be forced to sign them - but new recruits could be made to, under legislation to be rushed through Parliament. Workers who gave up their employment rights would not be able to change their minds and exercise them in future unless their employer agreed.

The chancellor hopes that hundreds of thousands of workers will become "employee-owners", mainly in fast-growing small- and medium-sized businesses which want a motivated and flexible workforce.


The plan is a variation of a proposal advocated by Adrian Beecroft, a venture capitalist and Tory donor, whose idea of allowing firms to "fire at will" without fear of an unfair dismissal claim was blocked by the Liberal Democrats. They now support the revised plan because it is voluntary and advocates employee share ownership.

Brendan Barber, general secretary of the Trades Union Congress, said: "We deplore any attack on maternity provision or protection against unfair dismissal." Paul Kenny, of the GMB union, said: "George Osborne, the man who is giving a £40,000 windfall to each of the millionaire elite, has announced more attacks on the least well-off in our society and on workers' rights."

Some business leaders warned that take-up of the scheme could be limited. Treasury sources admitted that big companies were unlikely to offer shares but estimated that the tax relief could cost £100 million by 2017-18.

John Wright, an employment law expert, said: "You can't agree to forgo your discrimination rights. If employees volunteer for this scheme, they could still take a case for race, age or sex discrimination."

Changing the rights stuff: How it would work

*Under the terms of the voluntary agreement, companies would be able to give employees shares in their business if, in return, they gave up a raft of employment rights. To encourage the scheme, no capital gains tax would be charged on any profit from the shares.

*Employees would be given between £2000 ($3901) and £50,000 of shares, but would have to give up their rights to claiming unfair dismissal, redundancy, flexible working and time off for training.

*Women would also be required to provide 16 weeks' notice of a date of return from maternity leave, instead of the current eight weeks.

*Legislation to bring in the new-type contracts will come in this year, with companies able to use them from April.

- Independent