George Osborne has come up with a corker.
A new breed of company in which workers will be forced to lose some maternity rights and all access to unfair dismissal tribunals has been unveiled by George Osborne as he tried to introduce a big deregulation of the labour market through the back door.
Osborne revealed that workers could be given shares by their employer worth between £2,000 and £50,000, and any gains in those shares would be exempt from capital gains tax.
That’s nice, you will own shares in the company that just sacked you…
While the plethora of employment law makes matters harder for small to medium businesses – in particular maternity leave is costly for a small outfit, and getting rid of an incompetent employee takes time and effort – it is worth bearing in mind that the contract of employment is a lopsided affair. In the power relationship, the employer tends to have the upper hand. Okay, so it is theoretically possible to tell them to stuff their contract and take one’s skills elsewhere, but in the current labour market, that’s likely to be a non-starter.
The outcome of Osborne’s little wheeze is likely to be contracts that people feel obliged to sign even though they don’t agree with the terms. And, no, I wouldn’t sign one. I don’t want shares particularly anyway, let alone shares in my employer. Talk about putting all your eggs in one basket. The idea that this is some sort of employee ownership arrangement is risible, frankly. It is nothing of the sort.
XX for small to medium businesses – XX
?!? I would have thought that this sort of company would not be a “share holders company” any way??? I Know they CAN be, but if they have problems paying maternity leave, is it LIKELY?
That too.
This is Osborne trying to leap on to the John Lewis bandwagon. He forgets, deliberately or otherwise, that JL is almost unique and was not originally founded as a near-cooperative but was left to the staff by John Spedan Lewis in the 20s (I think).
Of course, JL has become very successful but no-one appears to acknowledge that although its “owned” by the staff, it’s run like a normal company – redundancies and all. BTW the “partners” do not in reality run the company like a normal joint-stock company. An influential and permanent oligarchy actually appoints the MD etc.
Anyway, if this is Osborne’s sole “brilliant” conference idea, it’s hardly world-shattering.
It’s good that at least one person in the “libertarian blogosphere” recognises that the contractual relationship between employee and employer is, in most cases, a very unequal one. Total deregulation would encourage employer power, not individual freedom.
And to my mind large organisations tend to have some of the characteristics of a totalitarian state. They demand commitment and allegiance, it’s not simply a matter of I do some work and you give me some money.
Which is why I prefer self-employment and why I turned down an opportunity recently. We are still in negotiation and on this occasion, I seem to have the whip hand. I’m making the most of it while it lasts. 😈
Also it breaks a fundamental rule.
ONE Law, for ALL the people.
So “special exemptions” like this are equally fundamentally wrong.
So you’ve just been made redundant (potentially even more easily) because the company you work for is going through a bad patch and you’ve got “£2000” worth of likely horribly devalued shares to tide you over…
“…and any gains in those shares would be exempt from capital gains tax.” – until the treasury decide they need a little more from you anyway.
This doesn’t benefit anyone but employers. And the government, doubtless.
Quite. The balance of power will become even more skewed.
Why bother to slog long, hard hours sinking all your own money into building up your business to where you can even afford to have an employee if you’re only going to have give some of it away to them….for any reason.
Very free with other people’s stuff, aren’t they. 😐
They are. And if you have not gone public with your company and it doesn’t have shares, then what?
I think I’ll stay as I am; a sole trader.