Working Theory

by Michael Reed


I do employment law for the Free Representation Unit.


michael at


Who's forcing you?

16 April 2013

Rights for shares is back into the Growth and Infrastructure Bill, the House of Commons having reversed the House of Lords who’d taken it out.

One of the arguments on this issue is whether people will be forced to give up their employment rights in order to get or keep their jobs.

Michael Fallon, one of the Ministers at BIS addressed this during the debate:

Let me be clear about what the draft guidance will mean. It will mean that a jobseeker cannot be compelled to apply for an employee shareholder job, nor can their jobseeker’s allowance be reduced or cut if they turn down an offer of an employee shareholder job or refuse to apply for an employee shareholder job. This explicit change to the guidance puts beyond any doubt our intention that no one should be forced into this new status.

I’ve not delved into the detail of the Social Security law. But I suspect he’s right. If the guidance says that turning down a job on this basis shouldn’t count as refusing work for the purposes of losing benefit and given the statement quoted above, I can’t see the DWP or the Tribunals taking a different view.

There is also protection in the bill, making dismissals on the basis that you’ve refused to an accept an offer of shares for rights automatically unfair.

So in one sense, nobody can legally force you to take a job on the basis that you’ll be an employee shareholder and so have few employment rights. Although there is always the gap between ‘This will not happen’ and ‘If this does happen your employer will be acting unlawfully and you’ll have a strong unfair dismissal claim’.

But all of this assumes a level of free choice that simply isn’t present for the people who we should be most worried about when it comes to employment protection.

The problem isn’t that an employer will be able to force you to take a job on this basis. It’s that her reaction will be ‘Okay. Plenty of other people who want to work.’ So she’ll turn to the next person in line and make them the same offer. And someone will take it, because they need the job to pay their rent and feed their family.

Similarly, if you’re working on the shop floor and you’re offered a chance to move up to be a supervisor, but only if you’ll take the shares and give up your employment rights, how free is that choice? You can stay in your entry level position for your whole working life, or you can look for another job or you can take the deal. You have a choice between three bad options.

It’s good that people won’t be compelled to accept jobs without rights. But, if those are the jobs on offer, they’ll be under considerable pressure of circumstance to do so.

Having said all that, I don’t think this a major problem. The fact is that it’s a bad idea to try to buy your employee’s rights with shares. You’re paying them £2,000 worth of shares, despite the fact that employment claims are rare and, in general, relatively cheap. You’re also taking on the complexities of employee share ownership – and the possibility of complex share valuation litigation in place of the relatively simple tribunal claim. Frankly, I think employers will have more sense.

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