Democracy vs Capitalism: UK workers may trade rights for stocks
A UK Conservative MP proposed a controversial new law allowing employers to buy out workers’ rights in exchange for tax-free shares in their company. The plan outraged unions; if ratified, it may become mandatory for new staffers.
George Osborne revealed the new legislation during a speech at the Conservative Party Conference.
As early as April 2013, employees could receive between $3,000 and $80,000 of tax-free shares in their company in exchange for forfeiting their rights concering flexible working hours, redundancy pay and unjust dismissal.
The new proposal will also affect prospective mothers, as women on maternity leave would be required to give 16 weeks’ notice before returning to work, rather than the eight weeks currently required.
Osborn argued that workers who elected to take the shares would become “employee-owners,” and would not have to pay capital gains tax on any rise in the shares’ value when they sold them: “This is a significant step towards rebuilding Britain’s enterprise culture and is a real shot in the arm for Britain’s entrepreneurs.”
However, if the company underperforms or goes out of business, workers will be the ones to suffer most.
MP Gareth Thomas called the plan a con game, since receiving shares in a company does not guarantee profit. “Why give up rights as an employee for tax relief on a few shares with no more chance to have a voice in key decisions?” he said.
For now, the plan is supposedly voluntary, and existing employees may not be required to sign the new contracts. New staffers, however, may see these new contracts made compulsory in the future.
Workers would also not be allowed to change their mind after signing a contract trading their rights for shares.
Conservative MPs are planning to rush the new legislation through parliament as soon as possible.
Employers soon able to ‘fire at will’
Unions slammed the proposal as a direct attack on workers’ rights, and argued that it closely resembled the Beecroft proposal blocked by the Liberal Democrats, which gave firms the right to ‘fire at will’ without fear of a lawsuit for unjust dismissal.
“We deplore any attack on maternity provision or protection against unfair dismissal,” General-Secretary of the Trades Union Congress Brendan Barber told the Independent.
Head of the Unite union Len McCluskey clamed that Osborne is trying to bring about a return to the bygone Victorian era: “Osborne has shown just how shameful and despicable he and his Government are in trying to strip workers of their rights.”
UK laborers, especially the young, have been hard-hit by the country’s current economic malaise and government austerity programs. With some 2.59 million Brits unemployed, workers may feel pressured into giving up some of their rights in order to keep their job.