For immediate release


On 18th October the Department for Business, Innovation and Skills (BIS) announced it would consult on reforms to the status of Employee Share Ownership, as announced by the George Osborne at Conservative Party Conference earlier this month. The Co-operative Party are deeply concerned that the reforms, which include an erosion of employment rights such as ending the right to flexible working, time for training, unfair dismissal and the level of redundancy pay, are now being pushed through in a Bill sponsored by the Department of Communities and Local Government before the BIS consultation has even closed.

This Bill, the ‘Growth and Infrastructure Bill’, had its First Reading in the Commons on the same day that BIS launched its consultation. The BIS consultation is set to review exactly the measures put forward by Eric Pickles MP, as set out in full in Clause 23 of the Bill. Eric Pickles has pre-empted the results of the BIS review that only closes on 8th November – some nine days after next week’s second reading of the ‘Growth and Infrastructure Bill’. Eric Pickles’ Department is intent on eroding workers rights regardless of what Vince Cable’s consultation says – a move which the Employee Owners Association believes will not lead to an increase in employee share ownership in any case.

This backdoor Beecroft-style reform is believed not to enjoy the support of the Liberal Democrats in Government but it appears Conservative Ministers are content to ensure that the Department headed by Vince Cable and Jo Swinson does not have the opportunity to properly review the evidence before legislative change is suggested.

Gareth Thomas MP, Chair of the Co-operative Party and Shadow Cabinet Office Minister, said:


“This is a mockery of a consultation. I am in favour of employee ownership but this was always a ‘back of an envelope’ policy from the beginning – designed to erode workers rights, not increase employee ownership. This part of the Bill should be withdrawn.


“It seems Conservative Ministers are again pulling the rug from under their coalition partners in an important area of policy just to satisfy George Osborne.”




Notes for editors:

1.      BIS review document

2.      Employee Owners Association reaction

3.      CLG ‘Growth and Infrastructure Bill and relevant Clause 23

Clause 23 “Employee owner status

205A Employee owners

(1) An individual who is or becomes an employee of a company is an “employee owner” if—

(a) the company and the individual agree that the individual is to be an employee owner, and

(b) in consideration of that agreement, the company issues or allots to the individual shares in the company which have a value, on the day of issue or allotment, of no less than £2,000 and no more than £50,000.

(2) An employee who is an employee owner does not have—

(a) the right to make an application under section 63D (request to undertake study or training),

(b) the right to make an application under section 80F (request for flexible working),

(c) the right under section 94 not to be unfairly dismissed, or

(d) the right under section 135 to a redundancy payment.

(3) The following provisions are to be read in the case of an employee who is an employee owner as if for “8 weeks’ notice”, in each place it appears, there were substituted “16 weeks’ notice”—

(a) regulation 11 of the Maternity and Parental Leave etc. Regulations (S.I. 1999/3312) (requirement for employee to notify employer of intention to return to work during additional maternity leave period), and

(b) regulation 25 of the Paternity and Adoption Leave Regulations 2002 (S.I. 2002/2788) (corresponding provision for additional adoption leave).

(4) The reference in subsection (2)(c) to unfair dismissal does not include a reference to a dismissal—

(a) which is required to be regarded as unfair for the purposes of Part 10 by a provision (whenever made) contained in or made under this or any other Act, or

(b) which amounts to a contravention of the Equality Act 2010.

(5) The reference in subsection (2)(c) to the right not to be unfairly dismissed does not include a reference to that right in a case where section 108(2) (health and safety cases) applies.

(6) In this section, “company” means a company (as defined by the Companies Act 2006) limited by shares (but not does not include a community interest company).”

4.      The Co-operative Party is the political arm of the co-operative movement and Labour’s sister party. There are 29 Labour Co-operative MPs and over a 1000 Labour Co-operative local councillors.

5.      For more information please contact Joe Fortune, Parliamentary Officer, Co-operative Party  ( – 07984 787947).