The government has just begun its consultation on employee ownership. This is essentially where an employee will be able to have shares in a company, so that they become "employee owners" and have a stake in the business. This on the face of it, is a good idea and is a sure indicator that the government wants to spread employee ownership in the economy, so that many more workers feel empowered and part of a business, which in turn (it is hoped) will lead to greater productivity and loyalty from workers. The Liberal Deputy Prime Minister, Nick Clegg is keen to promote this as a way of creating more John Lewis style business models in the economy. As a Liberal Democrat, I completely support greater share ownership by employees, as all the evidence suggests that employees have a greater sense of well-being if they feel part of a company and are empowered - a very Liberal idea. However, given what the Conservative Chancellor announced at the Tory party conference, this comes at a price (what a surprise when Tories are involved).
Under plans drawn up by the Conservatives, employers will be able to require employees (i.e. new starters, rather than existing employees, where in theory it will be voluntary) to become employee owners, but they will lose key employment rights, such as the right to claim unfair dismissal and redundancy pay. This is typical of a Tory party who thinks that restricting employment rights is the way back to economic prosperity and my concern is that this is the Beecroft report by the back door, undermining hard won rights. This would not help with creating greater well-being in the work place The employer would be able to include a clause in employment contracts requiring the employee to surrender their shares when the employee resigned, was dismissed or made redundant. When shares are surrendered, there are unanswered questions about how the shares would be bought back. Of course there is a balance to be drawn between employee rights and labour flexibility but my concern is that individuals will sign up to employee owner contracts without fully understanding the implications, leaving many workers vulnerable and without protection. Also, there is a risk that employees are signing up for shares that are essentially worthless when it came down to it, but lose all their employment rights.
I hope Liberal Democrats in the coalition resist what the Tory party is trying to do here. We do not want an American style fire at will culture, where workers are left with very little redress if their employer proceeds to treat them unfairly. That will do little to increase well-being in our fragile economy and is likely to undermine productivity.
