Osborne told delegates at his party’s annual gathering in Birmingham that he would make it possible for employees to waive some employment rights in exchange for shares in the company they work for.
As well as a worker waiving their rights to claim for unfair dismissal, they would also give up redundancy rights, the right to request flexible working hours and time off for training in return for shares. They would also be required to provide 16 weeks' notice of a firm date of return from maternity leave, rather than the usual eight weeks.
£2,000 and £50,000 in share
Employees who sign up to the new contract would receive between £2,000 and £50,000 in shares, and profits would be exempt from capital gains tax.
The government hopes to legislate by the end of 2012, with a view to bringing in the new contracts from April 2013.
“Owner-employee status will be optional for existing employees. But both established companies and new start-ups can choose to offer only this new type of contract for new hires,” the Treasury said after Osborne's speech.
Owner-employees
“Companies recruiting owner-employees will continue to have the option of inserting more generous employment conditions into the employment contract if they want to.”
But John Cridland, director general of the Confederation of British Industry said it was not likely to appeal to large manufacturers.
“In some of Britain's cutting-edge entrepreneurial companies, the option of share ownership may be attractive to workers, rather than some of their employment rights. But I think this is a niche idea and not relevant to all businesses,” he added.
Meanwhile, King said: “Trading employment rights for shares is not what we should be doing.”
King said it betrayed trust. Imstead, he recommended the government made employment easier and reduced the cost of national insurance.
Many small businesses were “fearful of the cost of employing people”, he added.
