Following much debate, on 24 April 2013 the House of Lords
finally gave its approval to employee shareholder status which will
now take effect from Autumn 2013. This means that in return for a
grant of a minimum of £2,000 worth of shares an 'employee
shareholder' gives up certain key rights including unfair
dismissal, a statutory redundancy payment and flexible
working.
The approval did however come at the cost of an added safeguard
for employee shareholders including a last minute concession
regarding the provision of legal advice for the prospective
employee shareholder. An agreement that someone will become an
'employee shareholder' will be invalid unless, prior to
entering into the contract, the individual has received advice from
a relevant independent advisor (i.e. a lawyer, CAB, law centre,
union etc.), in a similar manner as with a Compromise Agreement.
And just as with a Compromise Agreement, the employer must pay the
reasonable costs of seeking that advice
