Tories offer shares for rights? Stuff ’em.* October 8, 2012Posted by WorldbyStorm in Economy.
A fairly stunningly awful proposal from George Osborne today where in his speech to the Tory conference he floated the idea of employees being given shares in exchange for agreeing to give away rights.
In a keynote speech to the Conservative party conference in Birmingham, the chancellor unveiled plans for a new owner-employee scheme aimed at small and medium-sized companies wishing to create a “flexible workforce”.
Osborne said the contract would be voluntary on both sides and would see employees given between £2,000 and £50,000 of shares that are exempt from capital gains tax. In exchange, they would give up their UK employment rights on unfair dismissal, redundancy, and the right to request flexible working and time off for training, and would be required to provide 16 weeks’ notice of a firm date of return from maternity leave, instead of the usual eight.
The sheer inequities of such proposals are almost breathtaking. For a start what would be the standardised basis of this exchange given that rights tend to be uniform (in their application for workers) whereas shares are contingent in each individual company case. But that’s only one problem with this, and by no means the most significant one.
Rights exist across the entirety of a working lifetime. How long would £50,000 worth of shares last? How long would £2,000 last?
And would those sums make up for lost redundancy rights in the case of a sacking?
The provision on maternity leave is atrocious, striking at the heart of any efforts directed to making workplaces positive environments for those with families.
And as for choice? And it being voluntary?
…a Treasury press statement makes clear that while owner-employee status will be optional for existing employees, “both established companies and new start-ups can choose to offer only this new type of contract for new hires” — effectively giving staff no choice to retain their employment rights instead of taking the shares.
Those who are at the bottom of the work pyramid, either in terms of age, experience or nature of job are those most likely to feel pressurised into this because the power relationships are so out of balance.
Rights aren’t generally transactional, or in the small number of instances where they are – as with the case of dangerous or unpleasant work – the recompense should be real and upfront in terms of payment and/or other substantive benefits. To essentially offer what is a gamble – on shares that can decrease in value as much as increase, assuming they had any in the first place, is profoundly wrong.
But it is the sort of idea that only those who were completely detached from the realities of working life could come up with. Only someone whose experience of working was markedly at odds with that of most of us – or someone whose experience was almost exclusively positioned at the top of the pyramid – could come up with the following:
Osborne said the scheme would mean that “owners, workers and the taxman” were “all in it together”.
“Workers: replace your old rights of unfair dismissal and redundancy with new rights of ownership. And what will the government do? We’ll charge no capital gains tax at all on the profit you make on your shares. Zero percent capital gains tax for these new employee-owners. Get shares and become owners of the company you work for.”
‘Owners’? Because a worker holds shares? Yeah, right. What a crock.
* Unfortunately our own moderation guidelines are problematic in terms of expressing precisely what I feel about this…