Osborne's 'shares' plan threatens rights

Jim Horton

Fancy a few free shares in the company you work for? Well David Cameron's party for the aspirational privileged announced at its conference this week a policy that apparently could make budding capitalists of us all.

However, aside from doubts about the practicalities of the proposal, there is just one not insignificant drawback for workers - we will have to forgo our rights to redundancy payments and unfair dismissal claims. In addition we will have to accept less flexible working and maternity rights.

Basically, millionaire chancellor George Osborne is asking workers to exchange our employment rights, won over decades of struggle, for a few pounds to gamble on the stock exchange.

This is at a time when share prices are yielding few gains. The government plans to bring the new rules into force in April 2013.

So how's it meant to work? Employees can be given between £2,000 and £50,000 of shares exempt from capital gains tax (CGT).

However, the Office for Budget Responsibility recently forecast that austerity measures could continue until 2018.

The percentage of a business allocated to employees through share schemes, particularly during recessions, is traditionally low and so the CGT gain is unlikely to be significant for many.

There's also the small matter of how the shares will be valued and whether workers will acquire voting rights as shareholders.

More likely is workers receiving shares, losing their jobs and then finding any share gains are less than the redundancy payment or unfair dismissal compensation they could have received.

Attack on rights

But let's not be fooled here, the government's proposals have nothing to do with giving workers a say in the companies they work for, and everything to do with further eroding the few rights we have at a time of economic crisis, wage cuts and job losses.

This measure is not about creating equality between the bosses and workers, it is intended to strengthen the hand of employers to enable them to sack workers at will. Being a shareholder won't make you a boss, just more vulnerable.

The Tories claim their proposal will remove barriers to small and medium sized businesses taking on new workers.

The Chartered Institute of Personnel and Development has acknowledged the fallacy of this argument. They correctly point out that there is little evidence to indicate that employee rights are stopping small businesses from taking on new workers.

The UK already has one of the least regulated labour markets in the world. Even employer organisations such as the CBI and Chambers of Commerce dismissed the proposal as a niche idea that would have no significant impact on growth.

In any event, the claimed employment rights barriers just do not exist in relation to employers taking on new workers.

Shamefully, since 6 April this year, anyone starting work generally cannot make an unfair dismissal claim until they have worked for the same employer for at least two years.

And all workers must be employed by the same employer for two years before they are entitled to a statutory redundancy payment. So why the shares for your rights proposal?

The idea signals an intention to remove key employment rights from all workers, a long cherished aim of sections of the Tory Party and big business.

Under the current proposal the scheme will be voluntary for existing employees, but disgracefully companies will be able to force it on new recruits.

Bosses will be able to compel new workers to either sign away their rights or stay on the dole. Unscrupulous employers could also abuse the scheme by dismissing an entire workforce and imposing new terms and conditions on re-engagement.

Unless stopped by the trade union movement, few rights at work could become the norm for all workers.

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.

In The Socialist 17 October 2012:

Fighting the cuts

We want a 24-hour general strike!