Employee Share Ownership - open letter to Vince Cable and Nick Clegg
By Tracy Connell and others in Liberal Democrat Voice
Originally published by East Midlands Liberal Democrats
We, the undersigned, are extremely concerned by the employee share ownership policy. We call for this bill to be amended to remove the part where workers have to give up their rights for share-ownership and, rather, for the proposal to mirror that agreed by the Liberal Democrat conference in this document.
The proposal appears to allow for workers to give up their rights in return for company shares, as detailed on the HM Treasury website:
Under the new type of contract, employees will be given between £2,000 and £50,000 of shares that are exempt from capital gains tax. In exchange, they will give up their UK rights on unfair dismissal, redundancy, and the right to request flexible working and time off for training, and will be required provide 16 weeks' notice of a firm date of return from maternity leave, instead of the usual eight.
From this we understand that as few as £2,000-worth of shares will potentially give employers the ability to fire workers at will, where the worker has absolutely no rights and has to sell the shares back to the company when they leave, and where the company can determine the value of those shares.
The model is recommended for start-ups and small companies. Their shares are unlikely to be traded and, so, have no clear value. How is an employee to judge the fairness of the offer, let alone be able to dispose of them with confidence in the value? It seems that the workers would give up significant rights, whereas the employer has nothing to lose - they get rid of an employee they don't want without any comeback or legal challenge, and also get their shares back at a price they can determine.
We have been told that employee owner status will be optional. However, it seems that this could be made compulsory for future employees in current and new businesses.
The HM Treasury website continues:
Employee-owner status will be optional for existing employees, but both established companies and new start-ups can choose to offer only this new type of contract for new hires.
The power of an employer, with a job market such as we have today, should not be dismissed lightly. Potential employees do not have the luxury of a wide choice of potential vacancies.
The Liberal Democrat Party Constitution states:
Liberal Democrats are committed to fostering a strong and sustainable economy which encourages the necessary wealth creating processes, develops and uses the skills of the people and works to the benefit of all, with a just distribution of the rewards of success. We want to see democracy, participation and the co-operative principle in industry and commerce…
We believe this policy goes against not only Liberal Democrat principles, but principles of decency and honesty in the workplace.
With a loss of rights, the employee will be in a more unstable employment situation, which can only decrease confidence and spending, which our economy desperately needs if it is to grow successfully.
This bill appears to be the Conservative party's way of getting "fire at will" through the back door. After the work to stop this going through via the Beecroft recommendations, isn't it hypocritical to allow the potential for it in this bill?
There is no doubt that some unscrupulous companies will abuse this and employees will lose hard won rights. What employee would want, voluntarily, to give up these rights, for any amount of money? Please either pull or amend this proposal.
Paul Wild, Walsall, Membership and Communications Officer. Tracy Connell, Newcastle City Party, Regional Officer and local part Exec. Kevin White, Liverpool Wavertree. Footsoldier and former Constituency Chair. Gareth Jones, Maidenhead Penny Burgess, Cotswold John Richardson, Newark Councillor Alasdair Christie, Inverness Malcolm D Gardner, St Austell & Newquay (formerly Twickenham!) Natasha Chapman, Lincoln, Chair of Lincoln Liberal Youth Cllr. Michelle Pearce, Calne, Wiltshire Gareth Loveridge, West Bromwich and Warley Joshua Dixon, Hillingdon and London Liberal Youth Vice Chair. Adam Gillett, Tower Hamlets. Former Chair of London Liberal Youth. John L Oakes, Former Haringey Councillor, Founder, LibDem Friends of Poland; activist. Alan Webb , Amber Valley , activist. Gemma Roulston, Reigate member and also membership secretary of LDDA Ian Wallace South East Cambs Fiona White, Guildford Constituency, Deputy Leader Surrey County Council Lib Dem Group. Richard Hudson, executive member of Derby City Matt Downey, Cambridge James King, Southport. David Parkes, Local Party: Brussels / Treasurer Lib Dems in Spain. Peter Reisdorf, Wirral West. Linda Jack, Chair Liberal Left, FPC, PCC Candidate Bedfordshire James Testro, Derby City.Rory Roberson, Worcester William Jones, chair of Wythenshawe and Sale East Andrew Page, Inverclyde Gareth Epps, Reading Stephen Glenn, Membership Development Officer Northern Ireland Kat Dadswell, Liverpool Wavertree Dimitri Seirlis, Worthing West Michael Mullaney Cllr and Executive Member for Housing Hinckley and Bosworth Borough Council Alexis Saliou Diouf Alexis S Diouf, Cllr Chesterfield Borough Council Ian Morton, High Wycombe, Regional Secretary Cllr Martin Hunt, Deputy Leader, Colchester Borough Council Dave Harris, Sutton, Surrey James Moore, Greater Reading George Potter, Guildford, LDDA Executive Alex Wasyliw, South Cambridgeshire Elaine Bagshaw, Chair of Tower Hamlets and Federal Executive member Nigel Quinton, Chair, Welwyn Hatfield Libdems Julian Tisi, Windsor Maria Pretzler, Swansea and Gower Chris Roberts, London Borough of Havering Chris Randall Hull and Hessle Andrew Waller, York Central Simon Wilson, Broadland Robert Pitt, Leeds Liberal Youth Secretary Hannah Bettsworth, Aberdeen Donside, Liberal Youth Scotland Ordinary Executive Member Aubrey Williams, Thirsk and Malton/Aberystwyth University Penny Goodman, Leeds North West Olly Loosemore, Chair of Orpington Liberal Democrats Louise Shaw, Stockport James Hackett, Chair of Rhondda Cynon Taff Welsh Liberal Democrats Leon Duveen, Treasurer Bassetlaw & Sherwood Marie Jenkins Town Councillor in Devon, Leadership Programme candidate Jennie Coggles, Exec. Member Nottingham City Phil Ling, Merton Borough, Exec member, on Leadership Programme Chris Lucas, Councillor, Three Rivers District Council, Leadership Programme Candidate, South West Herts Jason J Hunter, Sutton Angharad Bethan Jones Membership Officer Rhondda Cynon Taff Welsh Liberal Democrats Daisy Cooper, Parliamentary Candidate (Suffolk Coastal 2010), Lewes Andrew Hart, Theale Mario Grana, Theale Sandra Taylor Altrincham and Sale West with Stretford and Urmston Lib Dems Membership Officer Dr John Cordwell, County Councillor, Wotton-under-Edge, Gloucestershire CC Alan Marshall, Rotherham & Barnsley Greg Judge, Coventry, Leadership Candidate Programme Geoffrey G J Payne, Hackney, events organiserCatherine Wanless, slough Sarah Durkin, Wolverhampton East, Secretary Luke Bosman, Preston Cllr Nigel Ashton, Southport Rob Parsons, Lewes, foot soldier Chris Richards, Vice-Chair Camden Lib Dems, Leadership Programme Candidate Christina Shaw Leeds NW Suzanne Fletcher, Stockton local party Tom Snowdon, Amber Valley Lib Dems Owen Roberts, Swansea and Gower Max Wilkinson, Cheltenham Janet King, Chair, Bromsgrove Martin Horwood, Member of Parliament, Cheltenham Adam Janiczek Bradford Stuart Wheatcroft, Carlisle Scott Collins, South Northamptonshire Cllr Jon Ball, Ealing local party and FCC member Cllr Stephen Knight AMLondon Assembly MemberGroup Leader, Richmond upon Thames Council Mark Blackburn, Westminster Borough David Grace, Cambridge City Cllr Lloyd Harris, Regional Secretary - East of England Lib Dems Cllr Ruth Skelton, Derby City Nicola Prigg, Ayrshire Paul Walter, Newbury - Liberal Democrat Voice editorial team Luke Chapman, Social Liberal Forum - Membership Officer Cllr Ros Kayes, Dep Leader, Lib Dem Group, West Dorset District Council Sadie Smith, West Bromwich and Warley Cllr Hilary Jones, Leader of Derby Liberal Democrats Cllr Eric Ashburner, Derby City Cllr Ajit Atwal, Derby City Clive Lloyd, Cheltenham Cllr Joe Naitta, Derby City Cllr Judith Woodman, Leader of Cardiff Liberal Democrats Cllr Joe Boyle, Cardiff Ald. Peter Tyzack, Chair Filton & Bradley Stoke LP Cllr Mike Carr, Derby City Jonathan McCree, Haringey Lib Dem C Gordon, Mole Valley Rae Holmes, Chesterfield Phil Stevens, Islington - exec member Caron Lindsay, Treasurer, Scottish Liberal Democrats Ruth Hopwood, vice chair Wythenshawe and Sale East Liberal Democrats
* Tracy Connell is a member of the Liberal Democrats in Newcastle City, and a regional officer