Shadow BIS Minister Ian Murray MP considers why the Government’s Growth and Infrastructure Bill being introduced into Committee this week is a dishonest assault on employees’ rights dressed up as increasing employee ownership.

“There is a lot of employee ownership in our country. But not one of these employers and not one of these plans asks employees to give up any employment rights to get any of the various tax benefits associated with employee ownership.”

Corey Rosen, founder of The National Center for Employee Ownership, who is a self-confessed ‘unabashed advocate of employee ownership’ who has spent his career making the case for workers to own more stock and options, was quoted saying this recently in response to the UK Government’s “shares for rights” scheme. Yet again this Tory-led Government is driving through fundamental changes to the relationship between employees and employers in the workplace.

As you may know, they have already attacked the UK’s employment rights landscape. They have altered the qualifying period for unfair dismissal from 1 to 2 years and with the Enterprise and Regulatory Reform Bill, which has now concluded its passage through the House of Commons, introduces changes which will make it easier for rogue employers to exploit people in work. All of these changes combined can be described as an ideological attack on employee rights that delivers by the back door the measures in the widely-criticised Beecroft Report which they claim not to be taking forward. These changes, brought forward without a shred of evidence, have the potential to spawn a new industry of litigation. We opposed these measures not just because they were bad for workers but because they are bad for business too.

The Government claims to want to “remove the perceived barriers around the fear of being taken to an employment tribunal” but rather than deal with these ‘perceptions’ they have decided to fundamentally change the law. Following the Enterprise Bill, they have now come forward with another proposal – “employee owners” – which will do nothing of the sort. It is yet another example of how out of touch this Tory-led government has become.

The Chancellor proclaimed in his Conference speech in October that the proposal represented “owners, workers and the taxman all in it together”. In reality, however, this measure is divisive, goes against the spirit of One Nation and risks creating a two-tier labour market.

This proposal hasn’t been thought through at all. For example, why have the Government introduced legislation prior to the completion of the consultation? This screams of ‘policy on the hoof’ and a government totally lacking in a narrative for growth and concrete policies to get our economy moving again.

Looking at the proposal, the ambiguities are numerous. It is not at all clear whether this new type of employment will be genuinely voluntary. We know that employers will be able to offer ‘employee-owner’ status to new recruits; however, it is far from clear how voluntary the scheme will be in reality, and whether employees or prospective employees will be offered a real choice. At a time when jobs are scarce, people will be under undue pressure to take up a position where they might not be able to fully appreciate the rights which they will be giving up. In truth, few men or women with family responsibilities would want such a contract.

And like so many of the other measures which the Government have implemented, they are only moving the deckchairs – if straightforward unfair dismissal is not available, workers are more likely to look at the underlying causes of the dismissal. This brings much more complex and expensive legal action into play, including discrimination. It could also draw in the High Court as disputes surrounding shares cannot be dealt with by the Employment Tribunal. This will only add further cost and distress to businesses and employees.

The Government also isn’t clear on the valuation of shares, or the cost to the businesses themselves. How is the average employee meant to assess the true value of the shares being offered?

I agree with the prominent employment law blogger who said, “any Government which chooses to introduce a brand new employment status based on share ownership loses all right to complain that employment law is becoming too complicated and legalistic. Even if most employers end up ignoring employee-ownership because it is just too tricky or costly, it will still mean an extra chapter in every employment law textbook.”

As a Co-operative Party member, I’m a great believer in employee ownership and co-operative values. When it is genuine, it can unlock productivity; help manage change as a workforce can feel assured that it will not be carried out solely at their expense; and significantly can lead to less of a differential between the high- and the low-paid in a business. However, through the Chancellor’s latest wheeze, coupling employee-ownership with a slashing of employment rights, is contradictory and indeed counter-productive.

This is a dishonest attempt to dress up the proposal as a measure that will increase employee involvement and it is one that the yellow half of the Coalition should reject outright, but somehow yet again on the issue of employment rights, I foresee the backbone of the Lib Dems giving way to more of Adrian Beecroft’s proposals by the back door.

Ian Murray MP is Labour’s Shadow Minister for Employment Relations, Consumer and Postal Affairs.