The New "Employee Owners"

As part of the Government's long-term plan to stimulate the growth of small and medium-sized enterprises (SMEs) and to generally boost the UK economy, it is proposing to create a new class of employees, "Employee Owners," who in exchange for forgoing certain employment rights will receive shares in their employer companies. To make this concept more viable, the Nuttall Review recommended that the regulatory regime for share buy-backs under the Companies Act 2006 be relaxed.

On 30 October 2012, the Department for Business Innovation & Skills (BIS) published a consultation paper which invited opinions on the relaxation of the current share buy-back regime. Draft amendments to Part 18 have been laid before Parliament with the intention of bringing the revised regime into force on 6 April 2013. However, with this date looming and with no formal response to BIS's consultation published, the details of how Employee Ownership will work in practice remain unclear.