05 December 2012

The Coalition's shares-for-rights scheme may have received support from as little as 1% of respondents to its consultation, but it plans to go ahead with its proposals anyway.

At the Conservative Party Conference this autumn, Chancellor George Osborne proposed the introduction of a shares-for-rights scheme in a well-publicised speech. The plans were inserted into the Growth and Infrastructure Bill and have received confident praise from Tory Ministers.

But when the Government's official response to the public consultation on the proposals was published this week, the Coalition's press officers were notably quiet on the matter, after the scheme received a torrent of criticism from workers and employers alike.

Will this be the end of the plans to implement the scheme? Apparently the government are unfazed by this widespread lack of support and hope to push the legislation through anyway.

The IER has been reporting on the shares-for-rights scheme since it was announced, with our official response to the consultation and our expert bloggers pointing out its many flaws. The proposals are for workers to be offered between £2,000 and £50,000-worth of shares in the organisation they work for in exchange for giving up their right to claim unfair dismissal, their redundancy rights and having their maternity and adoption leave, flexible working and training rights curtailed.

Apart from being an astonishing attack on workers' rights, and quite clearly a way of sneaking Adrian Beecroft's widely admonished proposals for no-fault dismissal through the back door, we noted that the introduction of a new category of worker - that of Employee Owner - would create a more complex system and an increase in disagreements between workers and HR departments.

It seems that not only did other workers' organisations agree with us, but employers were also against the proposals.

Of the 209 responses to the Consultation on Implementing Employee Owner Status, over two-thirds stated the scheme would be of no benefit to employers, or would only be of advantage to unscrupulous ones. Meanwhile, over 80% said the proposals would not lead to any significant increase in recruitment levels.

Yet the most stark data published in relation to the consultation was the number of respondents who thought the proposals were a good idea. According to the Guardian, this number is understood to be as little as two to five.

"A very small number of responses welcomed the scheme and suggested they would be interested in taking it up," the official response said. It noted there were a wide range of concerns about the proposals, particularly around the protection of employment rights, the creation of tax avoidance loopholes for employers and the cost and complexity of the scheme.

However, despite such a clear mandate to scrap the legislation, the Coalition instead reminded interested parties that taking on the scheme would be voluntary for both workers and businesses and introduced a new raft of amendments to their proposals in a weak effort to improve its reception.

These include raising the minimum amount of shares an employee can be offered and removing the maximum threshold, a modest improvement in paternity rights, extending the range of companies that could offer the scheme and even changing the name of the new worker category to "Employee Shareholder".

With the recent reduction in the length of consultation periods, we have previously questioned how carefully the Coalition is listening to the voice of the public and to what extent it is simply being led by its own ideology. The fact Ministers still consider these plans to be good ones is stark evidence of its determination to ignore dissenting voices, no matter how many there are.

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