A local firm of solicitors is urging the Government to review its Shares for Rights scheme after initial feedback indicates business participation has been minimal.
The Shares for Rights scheme was introduced last September as part of the Growth and Infrastructure Bill to enable individuals to opt-out of certain employment rights in return for shares in the company, however a report from the Financial Times suggest that there were just 19 enquiries from across the whole country in the six months leading up to December.
The initiative was introduced to offer employees between £2,000 and £50,000 worth of shares in return for the loss of certain rights such as unfair dismissal, statutory redundancy payments, training, and the rights to flexible working. However, the scheme has been heavily criticised, with the vast majority of UK businesses either not aware of it or not keen to use it, and recent reports suggest that employers are worried about ruining employee relations, with 20% believing the scheme would affect these.
Jemma Jones, Employment Solicitor at PCB Solicitors, explained: “The aim of the Shares for Rights scheme was essentially a good idea, however its focus does mean many businesses struggle to see the benefit of the scheme. The initiative is essentially aimed at new start-ups and small businesses who want to grow and increase employee engagement whilst also removing red tape.
“In the current climate, employees may be looking at current trends in relation to share prices and seeing little benefit for them, and many more employees appear keen to keep their rights, some of whom would prefer a pay rise in exchange for giving up certain rights rather than introduction to the scheme. Other parties are urging the government to scrap the Shares for Rights Scheme and instead increase the tax allowance for basic rate taxpayers to £10,800, which certainly appears to be more appealing to many workers but would not aid small to medium start -up businesses, which was the aim of the scheme.
“Essentially, the Government needs to evaluate what it wanted to achieve through the scheme and make it more appealing for the majority. Early feedback suggests employees are not willing to waive their rights so in order for future initiatives to work they need to be more attractive to both the employee and employer,” Jemma concluded.
PCB Solicitors LLP is a modern partnership, with offices in Shrewsbury, Broseley, Church Stretton, Craven Arms, Knighton, Ludlow, Telford, and Worcester. While they have origins back to 1860, the firm is forward-looking and offers a full range of legal advice for both individuals and businesses, including property, family advice and childcare matters, wills, trusts, probate and estate planning, accident and personal injury, litigation, criminal law and corporate and business law.
For further information about PCB Solicitors’ complete range of legal services, please contact the Shrewsbury Head Office on 01743 248148 or visit the website via the link.
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