An employee shareholder is someone who works under an employment contract and owns at least £2,000 worth of shares in the employer’s company or parent company.
They also have the right to collective redundancy consultation and transfer of undertakings (TUPE) - this protects the employee’s terms and conditions when the business is transferred to a new owner.
Employee shareholders don’t have these rights:
- protection against unfair dismissal - apart from dismissal on grounds of discrimination and in relation to health and safety
- statutory redundancy pay
- the right to request flexible working - except in the 2 weeks after returning from parental leave
- certain statutory rights to request time off for training
Employers can choose more generous employment rights than the statutory ones.
Tax relief and obligations
Employee shareholders can get tax relief on the first £2,000 of shares they get before 1 December 2016.
Employee shareholders must pay tax on buying and selling shares.
HM Revenue and Customs (HMRC) has further guidance on tax relief for employee shareholders.
Applying for employment shareholder jobs
Anyone can apply for an employee shareholder job.
People claiming Jobseeker’s Allowance don’t have to apply for an employee shareholder job that Jobcentre Plus have told them about.
Existing employees don’t have to accept a change to an employment contract to become an employee shareholder if they don’t want to.
Offering employment shareholder status
Employers must following certain rules when offering employment shareholder status to their employees.