Following the Chancellor’s announcement that the Government plans to introduce an 'employee owner' employment status, the Government has now launched a consultation on the proposals.

Under the new employment status, employee owners will have a different set of employment rights and they will be given shares in the company of between £2,000 and £50,000. Any increase in value of these shares will not be subject to capital gains tax.

Employees taken on this way will have all of the rights associated with other employees except for certain unfair dismissal rights, redundancy pay, and some rights affecting training, flexible working and maternity leave.

Business Minister, Jo Swinson, said:”We know that engaged employees are more productive and motivated. This scheme increases the options for business and brings greater flexibility to companies and employees in determining their employment relationship.

“By responding to the flexible needs of fast growing companies, it will help them take people on, providing a real incentive for employers and employees.”

The consultation will close on 8th November 2012, and legislation to bring in the new employee owner contract will be introduced via the Growth and Infrastructure Bill, with the aim of companies being able to offer the new type of contract from April 2013.