The government’s employee ownership proposal has passed in the House of Lords.
The Growth and Infrastructure Bill, commonly known as ‘rights for shares’, passed by 275 to 168, a majority of 107, after Chancellor George Osborne made a key concession.
The legislation means that employers will be able to allow employees to swap employment rights, including unfair dismissal and redundancy rights, for shares in their company worth at least £2,000.
The government has now added the clause that employees will only able to swap rights after receiving free independent advice and that they will have seven days to decide whether to take up the share offer.
The scheme is intended to help encourage organisational growth during hard economic times, but the proposal has been caught up in legislative ‘ping-pong’ between the House of Commons and House of Lords.
The peers previously voted the scheme down on 22 April 2013 and on 20 March 2013 after it was passed in the House of Commons.
Len McCluskey, general secretary at Unite, said: “Government concessions to save face are meaningless.
“They will do nothing to protect vulnerable workers and will only saddle businesses with costly legal bills.
“Those desperate for work will still face the invidious choice of signing their rights away to get work and put food on the table.”
Iain Hasdell, chief executive of the Employee Ownership Association, added: “The decision to allow Clause 27 of the bill, in which worker rights on such matters as redundancy and unfair dismissal have to be sacrificed by employees in order for them to be allowed an ownership stake in the business in which they work, is hugely disappointing.
“There is absolutely no need to dilute the rights of workers in order to grow employee ownership and no data to suggest that doing so would significantly boost employee ownership.”
The news follows the 2013 Budget, on 20 March, in which the government announced that it will invest £50 million annually from 2014-2015 to incentivise the employee ownership sector, as well as announcements that the first £2,000 of share value that any employee receives under the new status will be free from income tax and national insurance (NI) contributions. The government will also fund capital gains tax (CGT) relief on the shares.