Employee-shareholders

An employee-shareholder contract is a type of employment contract that was introduced on 1 September 2013.

Employee shareholders are given shares in the business in exchange for foregoing certain employment rights, including the right to claim unfair dismissal (except where the dismissal is automatically unfair or discriminatory) and the right to receive statutory redundancy pay.

If the employer follows the right procedure, any employee or prospective employee of a company can become an employee shareholder.


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George Osborne announcing Shares for Rights in 2012. Photo: Bruce Adams / Daily Mail / REX

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HMRC has agreed only 350 share valuations in connection with employee shareholder status. Photo: Jeff Blackler/REX

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Employee share incentives: John Lewis is well known for being owned by its workfoce. Photo: Geoff Moore/REX

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