The Chancellor, George Osborne, may have thought he was on to a winner when he proposed that workers could be asked to exchange employment rights for company shares. However, the plan has been met with a lukewarm response from the business community in general and has now been denounced by Sainsbury’s chief executive Justin King.
Mr Osborne announced the plan in his speech to the Conservative Party conference this week. He proposed that workers may be offered shares worth between £2,000 and £50,000 if they agree to surrender employment rights such as the right to claim unfair dismissal.
The proposal was initially welcomed by the Federation of Small Businesses who said it could help to promote loyalty to companies and improve productivity. Despite this, national chairman John Walker predicted that “the number of businesses who adopt the scheme may be small.”
The CBI described the plan as a “niche idea” that was “not relevant to all businesses,” while the British Chamber of Commerce said it was “unlikely to be a game changer.”
Now the shares-for-rights plan has been denounced by Justin King as something that could worsen the levels of trust between the public and businesses. Mr King has been keen to promote Sainsbury’s as an ethical company of late, and his views may come as no surprise, but such outspoken criticism from a key business figure will be seen as a further blow to the Chancellor.
The supermarket boss said that Sainsbury’s already has a long standing employee share scheme and this is something that should not be linked to reduced employment rights.
“What do you think the population at large will think of businesses that want to trade employment rights for money?” he asked. “(This) is not something we should be doing.”
Instead, Mr King suggested that the government should be reducing barriers to employment and lowering National Insurance.
What do you think of the Chancellor’s proposal? Do you think it will lead to increased employee loyalty or do you agree with Justin King that it will worsen the trust between the public and businesses? Share your thoughts with us below.
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