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Chancellor plans new kind of ‘owner-employee’ employment contract

10 October 2012

Earlier this week George Osborne announced plans for a new kind of ‘owner-employee’ employment contract.

The proposals see employees being given between £2,000 and £50,000 worth of shares that are exempt from capital gains tax in exchange for them giving up certain statutory employment rights (including unfair dismissal, redundancy and the right to request flexible working or time off for training).

Owner-employee status will be optional for existing employees, but both established companies and new startups can choose to offer only this new type of contract for new recruits.

The Government plans to consult this month on the detail of this proposed new contract. It will be interesting to see which statutory employment rights will remain intact for ‘owner-employees’ (e.g. claims for discrimination, whistleblowing or a protective award where there has been collective redundancies or a TUPE transfer) and whether this new form of employment contract will prove to be an attractive option for employers.

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