Employers are unlikely to benefit from the government’s “highly doubtful” employee ownership proposals, the CIPD has said.
CIPD employee relations adviser Mike Emmott warned that the plan, in which employees swap employment rights for company shares, could create a two-tier labour market in which employers had “little to gain”.
He said there was little evidence to suggest employment regulation was preventing small businesses from taking people on.
“It is far from clear how attractive the offer to give up employment rights in return for shares will be to prospective employees of small firms,” he said.
“More important, it is highly doubtful whether inviting employees to sign away basic employment rights will deliver the motivated, driven, high performing workforce that small firms need.
“Existing, highly successful mutually owned firms do not thrive on employee ownership alone, but on the high trust, high engagement, all-pulling-in-the-same-direction cultures they have. Employee ownership works best where it is accompanied by great management, rather than enhanced job insecurity.”
