The government's economic policy objective is to achieve "strong, sustainable and balanced growth". No surprise, then, that the current scale of activity is aimed at maximising growth by reducing regulatory burdens. With all this talk of employee ownership, employee owner status, right to provide and right to request, it is easy to lose track. And although the government has given the thumbs up to boosting the employee-owned sector, it's still not clear exactly how it will work.
Graeme Nuttall, a partner in the City law firm Field Fisher Waterhouse, was appointed as the government's independent adviser on employee ownership following the deputy prime minister's announcement in January of a government drive to bring employee ownership into the mainstream British economy.
The Nuttall Review of Employee Ownership was published in July. The review addresses the benefits of employee ownership, raising awareness, increasing resources for employee-led mutuals, reducing complexity and suggesting action necessary to drive the programme forward.
In his review Nuttall considers whether a 'right to request' employee ownership, similar to the right for employees to request flexible working or time to train, should be introduced as necessary nudge in encouraging take-up. A non-regulatory alternative is considered in the review, as opposed to a statutory right to request.
The Nuttall Review suggests that a request should be exercised by a group of employees, not individuals, and that a minimum period of employment, for example 26 weeks, should apply before employees should be eligible to make a request.
In relation to employers, the review favours a light touch. Under a statutory right to request, the key duty upon the employer might be only to "consider the request reasonably". The employer would be required only to give the main reason for refusing the request, rather than having to ensure that the reason for refusal met certain specified criteria.
Any regulations or guidance should limit the scope for employees to misuse the right to request. Similarly, employees would need protection against suffering a detriment or dismissal as a result of making a request and would need a system for enforcing the right.
The Department for Business Information & Skills (BIS) published a call for evidence on a right to request employee ownership on 6 July, following release of the Nuttall Review and the concomitant launch summit. While all respondents to the call for evidence were in favour of the principle of employee ownership, more were against the idea of introducing a statutory right to request. The most commonly cited reason was the associated regulatory burden. This included added complexity, the risk of impeding legitimate corporate transactions by causing delay and the threat to employee relations during a statutory process or should a request be refused.
Gemma Brown is employment lawyer at public services law firm TPP Law
