In 2013, a new employment status was created, called Employee Shareholder status. This was intended to encourage employee share ownership by providing tax incentives for those becoming employee shareholders.
However, in return, employee shareholders have to give up some of their employment rights.
There is a fairly complex process that has to be followed to create employee shareholder status. In particular, employee shareholders have to be given detailed information about their share award and the rights that they are giving up. They then have to receive independent legal advice on the proposed arrangement and must also be given the benefit of a seven day “cooling off” period before the arrangement can be finalised.
Employee shareholders must receive at least £2,000 worth of shares in their employer (or a parent company), at no cost to them. Assuming various conditions are met, there will not be a liability for income tax or national insurance contributions in relation to the grant of shares, and capital gains tax will not be payable when the shares are sold.
In return, employee shareholders give up various employment rights, most significantly the right to claim unfair dismissal (apart from in relation to certain dismissals) and the right to a statutory redundancy payment.
We are experienced at advising on employee shareholder status. In particular, we can help ensure the implementation of employee shareholder status is effected correctly so as not to undermine the tax efficiency of the arrangement. Further, we can advise employees’ on the rights they are giving up and whether, as a result, they are sufficiently protected by their contractual notice periods which become much more important in the absence of unfair dismissal rights.
Recent examples of work in this area include:
- Acting for the directors of a national company in relation to their planned employee shareholder status, including advising on the rights they were giving up in accordance with the rules of employee shareholder status legislation.
- Providing the necessary independent legal advice to a group of senior managers in relation to their employee shareholder status, funded by the employer and managed quickly and efficiently to hit commercially imposed deadlines.
Why use Myerson’s Employment Team?
Our specialist team of employment solicitors is described in the independent Legal 500 directory as “excellent”. In addition, both Partners in our team are recommended by the Legal 500. Therefore, you can be reassured that you will deal with some of the best employment solicitors in the country.
We are determined and robust on your behalf, but also easy to deal with and clear in our advice. We will fight your corner but understand that a common sense approach is often required in order to find solutions that work for you in the context of your professional and personal circumstances.
Collectively, we have over fifty years’ experience of providing strategic employment law advice to senior individuals and others facing difficult work-place issues and who need support and guidance in:
- understanding their legal rights and their practical options; and
- achieving the best possible outcome, whether at the start, during or at the end of their working relationship.
Our ethos is to provide our clients with an alternative to the major regional and national firms by offering high quality legal advice from highly experienced, specialist lawyers, but on a much more cost-effective basis.
In particular, we offer:
- Clear and straightforward advice.
- Cost-effective support and certainty on costs where you need it.
- Extensive experience of advising senior executives, directors, partners and others with complex employment concerns, including discrimination issues and group claims.
- A credible team that is used to dealing with and acting against large employers and law firms on behalf of our clients.
Our approach to costs
We know that clarity on costs is vitally important to our clients. As standard practice, we give our clients an estimate of the costs involved in undertaking any piece of work at the outset. We then provide costs updates on a regular basis.
We work closely with our clients to ensure that we meet their expectations both in terms of their objectives for a particular piece of work and in relation to costs. In addition, we are happy to discuss fixed fees and retainer arrangements if that is helpful to you.
How We Can Help
A member of our specialist team will be happy to help.
To discuss Employee Shareholders issues, please either use the contact form on the right, email us at email@example.com or call us today on +44(0)161 941 4000 to speak to a member of our team.