Employee shareholders rejected

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The House of Lords has again voted to reject the proposed Employee Shareholder status set out in the Growth and Infrastructure Bill.

The government is determined to press ahead with this scheme and has published some concessions in the hope that the House of Lords will agree; these are:

  • a provision that the employee cannot accept the offer within seven days of it being made;
  • a written statement setting out the rights that the employee is giving up; and
  • a written statement setting out the details of the shares being offered (including whether they are voting or non-voting shares, whether they carry a dividend, and whether they carry a right to a share in the company’s assets if it is wound-up and whether pre-emption rights are excluded).

The government had made some earlier concessions to the original proposals:-

  • a jobseeker who refuses a job on an employee shareholder basis will not automatically forfeit their unemployment benefits; and
  • the first £2,000 of shares given to the employee will not attract income tax.