What is the point?

Victoria Phillips is head of employment rights at Thompsons Solicitors

The Thompsons Solicitors UnionHome blog


According to the Oxford English Dictionary, the verb “consult” means to “discuss something with someone especially in order to get their approval or permission”.


And the government seems to agree – at least in theory. In its guidance on consultations, it says that it will consult in order to “garner views and preferences, to understand possible unintended consequences of a policy or to get views on implementation”.


Strange that, because it has just published its response to the consultation on employee owners (now renamed employee shareholders), and although the vast majority of the people who responded were against the idea, the government has said that it’s going ahead anyway.


Although it only allowed three weeks instead of the usual 12 to reply (the guidance says engagement should begin early so views can genuinely be taken into account, though a recent change allows departments “to follow a range of timescales”), 209 organisations still managed to respond.


Here’s a flavour of what people said about the idea of offering employee owner status in exchange for losing key employment rights:


  • 85 per cent of respondents said that limiting unfair dismissal rights would have little or no impact on recruitment because so few businesses would offer the employee-owner option anyway
  • 67 per cent said that introducing employee owner status would have no benefits for companies or only benefits for unscrupulous employers
  • 56 per cent said that the proposal would increase the number of tribunal claims (for instance for discrimination) if employees could not bring claims for unfair dismissal
  • 76 per cent said that having no statutory redundancy pay would either have a negative or zero impact on businesses
  • 78 per cent said that the proposal would either have a negligible or a negative effect on labour market flexibility (the whole rationale for the proposal)
  • 92 per cent were either negative or mixed about the take-up of the policy of employee owner status by companies and individuals


You get the idea. This is not popular, even with business.


Nor could the government spin the figures. It had to admit in its executive summary that only “a very small number of responses welcomed the scheme and suggested that they would be interested in taking it up”.


Its conclusion? That, despite all the evidence to the contrary, the new employment status of employee owners was a “novel way for companies to arrange their workforce, and builds on the already flexible labour market enjoyed in the UK today”. 


Its only concession to the negative feedback seems to be a decision to provide further “clarity” – both through guidance for individuals and businesses and through the legislation which underpins the new status.


So what was the point in asking us in the first place if it was always going to ignore what we had to say?

This blatant disregard for the views of experts and interested parties would be comical if the consequences weren’t so potentially serious. As we said in our response to introducing employee owners, the proposal has nothing to do with flexibility and everything to do with giving unscrupulous employers the right to fire employees at will.


The only possible saving grace to this whole sorry tale is that the proposal will not take off because even businesses in the UK think it’s a – far too complicated – step too far.


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