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Employment law changes in 2013 will include employee-owner contracts

08th January 2013

In April the introduction of employee-owner contracts will see firms able to give workers a financial stake in the business’s growth through tax-free shares of between £2,000 and £50,000. However, employees taking up this option will have to forego some of their employment law rights.

The voluntary scheme was launched in October 2012 by Chancellor George Osborne to encourage worker engagement with the success of the business they work for, but critics of the employee-owner contracts say there are dangers inherent in such moves.

Dr Brian Sloan, chief economist at Greater Manchester Chamber of Commerce, said, “It could blur the relationship between business ownership, employment status and ultimately the tax position of many people and businesses, leading to further complex regulation being introduced.”

Companies of any size will be able to introduce the new contracts, but the Government has stated that it would best suit fast-growing small and medium sized companies who would benefit from a flexible workforce.

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