BOSSES and staff are being warned to pay close attention if they are interested in Government proposals for a controversial scheme where employees swap working rights for shares in the company.

Newcastle-based accountancy firm Robson Laidler partner Graham Purvis has said there is a lot to be clarified about the employee-owner contract scheme, proposed by George Osbourne last year, and set to come into force in April.

Under the proposals, employers will be able to offer employees between £2,000 and £50,000 of shares in their company, which will be exempt from capital gains tax on disposal, in return for employees forgoing employment rights such as unfair dismissal, redundancy, flexible working and leave for training.

The Government says that by responding to the flexible needs of fast growing companies, this scheme will help them take people on, providing a real incentive for employers and employees.

However, the move has attracted criticism from trade unions, the media and opposition groups, who say it is a charter for rogue employers to do away with employees’ legal rights. Graham Purvis, partner at Robson Laidler LLP, said: “It should be noted that there are restrictions under both European and UK law as to what rights employees can contract out of, and employers might not be as protected from claims as it might first appear. Furthermore the tax treatment of the share awards needs to be properly understood.

“Much is yet to be clarified, and whilst the aim is for the new contracts to be available for organisations to offer from April 2013, the proposals are still at consultation stage, and it remains to be seen what solutions to the employment and company law issues will arise before the proposals are set to come into force.”