Overview

This bill amends the Growth and Infrastructure Bill to create a new employment status: "employee shareholder." This status allows companies to offer employees shares in exchange for reduced employment rights, but with increased safeguards to protect the employee.

Description

The core disagreement centers around the creation of "employee shareholder" status. The Lords initially rejected this, citing concerns about the loss of statutory employment rights. The Commons disagreed, proposing amendments to mitigate these risks. These amendments mandate a written statement detailing the rights and limitations associated with employee shareholder status. This statement must clearly outline aspects such as notice periods, voting rights, dividend entitlement, rights upon company liquidation, and any restrictions on share transfer. It also clarifies the definitions of "drag-along rights" and "tag-along rights". A crucial change is the requirement for a seven-day waiting period after the offer is made before an individual can accept becoming an employee shareholder. Further amendments require the company to pay for independent advice for the prospective employee shareholder, and require a seven-day period after the employee receives this advice before the agreement can be made.

Government Spending

The bill does not directly specify government spending. The primary impact is likely to be indirect, resulting from changes to employment law and potential shifts in business practices. There is no direct financial impact outlined in the provided text.

Groups Affected

• Employees: Potentially affected by the opportunity to become employee shareholders, which could result in reduced employment rights but also potential financial gains through share ownership. They are better protected in the final version of the bill.
• Employers: Could benefit from reduced employment costs associated with offering employee share schemes, but also face stricter legal requirements related to transparency and advice for employees.
• Investors: Might see altered company structures and possibly changes in shareholder dynamics as a result of widespread adoption of the employee shareholder model.
• Employment Lawyers and Advisors: Increased demand for advice on employee shareholder agreements.

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