However, a Shropshire solicitor has advised employers to steer clear of the new plans. John Mehtam, the employment law specialist at Martin Kaye LLP in Telford, has warned employers that they could be giving away shares in their company needlessly.
“The new type of contract says that in return for shares in your company, the employee would give up their rights on unfair dismissal, redundancy, the right to request flexible working and time off for training.
“But in fact, when it comes to new staff, they are not actually entitled to unfair dismissal or redundancy rights until they’ve worked for you for two years. So they’re only really giving up the right to request flexible working and time off for training, and in reality they don’t have any automatic right to either – more importantly, these rights don’t even begin from the first day they join you.”
More worryingly for Shropshire employers, John also noted that if someone on the new type of contract left the company or had to be sacked, the employer would not automatically get their shares back.
“Anyone who left under a cloud, or who wanted to be awkward, could hold you to ransom because you’ll have to pay to get the shares back,” warned John. “Clearly even though these contracts may seem like a good idea, as an employer you would be giving away far too much with very little in return. Employers should make sure they are fully informed of the tiniest details before taking this approach – or you may risk your company’s future without any need to do so.”
If a company chooses to implement the new contracts then they will be open to all new staff, but they will be optional for existing employees. For more information about employment law, visit the Martin Kaye website - http://www.martinkaye.co.uk/