First Practice Management
- Posted Wednesday October 10, 2012
New Employment Contract Status
The government has announced plans for the introduction of a new type of employment contract for the staff of businesses of all sizes from April 2013 (the owner-employee contract).
New owner-employees will exchange some of their UK employment rights for rights of ownership in the form of shares in the business they work for.
Companies of any size will be able to use this new kind of contract, intended for fast growing small and medium sized companies that want to create a flexible workforce. Employees will be given between £2,000 and £50,000 of shares that are exempt from capital gains tax. In exchange, they give up rights on unfair dismissal, redundancy, and the right to request flexible working and time off for training, and will be required provide 16 weeks’ notice of a firm date of return from maternity leave, instead of the usual 8.
Owner-employee status will be optional for existing employees, but both established companies and new start-ups can choose to offer only this new type of contract for new hires. Legislation to bring in the new owner-employee contract will come later this year so that companies can use the new type of contract from April 2013. The Government will consult on some details of the contract later this month.