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Employee Shareholder Contracts

As of 1st September 2013, there is an intriguing new employment status, that of the employee shareholder.

Simplified down to its basics, the employer gives the employee £2000 worth of shares and the employee signs a contract that gives up rights to unfair dismissal and statutory redundancy pay.

There are 2 clear points of attraction here for employers:

1) A tax-efficient way of motivating employees by making them part of the company.

2) A route to employing people without having the pain of getting rid of them if they last more than 2 years.

There are some complications beyond the above basics and these require some initial outlay in legal fees, but any such costs will be mild in comparison to the potential tribunal and redundancy costs that are inherent in any ‘standard’ employee contract.

Definitely worth looking at.

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