Analysis on Tory conference

[Coman]

Perhaps not for the drawing room, but if you are interested in some of the tax outcomes of the plans for employees to be able to exchange rights for shares, there is more on my blog here:

http://comanandco.co.uk/shares-for-rights

[Loz]

Can' really see the point of this, especially as you can put ?5640 worth of shares in a share ISA anyway.

[????]

A few top of my head thoughts

- most companies and the entires public sector don't have shares to give away

- those companies that complain that hiring is risky 'cos of the difficulty of firing are more likely to be SMEs who on the whole are less likely to have shares to give away.

- just the numbers of employees and their sheer size means that the big companies the most likely to have shares to give away are least likely to be scared or affected by not being able to get rid of employees pay redundancy etc

All strikes me that this is one of them ideas from people without much business experience, er, ie Politicians.

[Coman]

It is hard to see how the plans would work in practice. From where I am sitting it is a least a signal that the government is trying to ease the burden of employment laws, which tend to hit small businesses the hardest, and is at least an attempt to address the problems of low growth and unemployment, highest in the younger age groups.

[DJKillaQueen]

How is the freedom to fire without redress helpful to unemployment exactly?

I totally accept your points regarding savings in tax and NI cotributions to both employee and employer and agree the benefit would be most apparent to small businesses. But I also think that to deny employment rights to people, rights that have been hard fought for and are there for a reason, is cycnical. No employee in their right mind would take shares in anything but a profit making small business and if the business is smart, it will just get rid of people when the shares aren't worth anything.

Like most things the Conservatives propose, there are often idealogical reasons behind it, ideas that are just as much to do with removing security and rights for the common man as anything else. There are many ways that small buisness can be helped without removing peoples employment rights.

[zeban]

I second DJKQ

[Marmora Man]

Zeban / DJQK

I have run a small business and these days I act as an advisor / consultant to other businesses. No employer in their right mind would fire a good and valued member of staff for no reason - but nowadays getting rid of a poor worker is a long drawn out affair. Too often some employers resort to manufacturing a case for dismissal over a period of up to 6 months in order to avoid some form of Industrial Tribunal.

This is immoral and bad for the employer, other members of staff and the individual whose performance is not up to scratch.

As an example (real life and current - but far from East Dulwich):

Member of staff - joined company 18 months ago. Has persistent absenteeism, long periods of sickness (some suspected to be faked), has abused the company's policy of IT (using company time to Facebook friends and send many semi pornographic e-mails - a recent investigation revealed an average of 8 hours a week doing this), been abusive to work colleagues and provided a poor service to the individual she was meant to be supporting as PA / Secretary. Over the last 10 months she has been counselled, had several performance management meetings with objectives set, but never realised, and been allowed to avail herself of a company interest free loan, reportedly to fund necessary repairs to her home but which was actually spent on a holiday in France.

It has been clear for several months that she is not adding value to the company but, as yet, there is not sufficient, evidence that an Idustrial Tribunal would accept as irrefutable to warrant her dismissal. So the "hard fought for and there for a reason" employee rights are costing this company not just this individual's salary but also reputation, good will from other staff and the cost of cover for her poor performance.

I have recommended a full investigation of the abuse of IT policy and statements from colleagues regarding her abusive bahviour but, in a counter move supported by her union representative, she has now submitted a grievance claiming harrassment - further delaying the process.

What would you recommend in this case?

[DJKillaQueen]

Then maybe it's the process of tribunal that needs to be modified. Taking away a persons right to redress completely though, is not the answer.

Also I can think of at least three examples of highly experienced workers who were not valued by the companies they worked for, because of internal politics, or other poor reasoning, and laid off to be replaced by cheaper, less skilled labour. It's swings and roundabouts. There are some great employers and equally there are some really bad ones. The protections are there for a reason.

[Huguenot]

As an SME, employment is mainly about risk.

SME's are relatively inflexible when it comes to manpower - big companies retain high value long term contracts at established margins. They can staff for the good and the bad times, and accommodate standard deviation in terms of staff performance.

An SME can't.

Typically that means staffing for the 'worst' economics and turning away business when the going is good.

More flexibility and less risk in the labour pool means an average increase in paid hours, and on a national level that means economic growth. That's what the Tories are banking on.

From an experiential level, I've largely grown up in a liberal socially motivated environment. The number of dismissals that I've seen from employer abuse are vastly outweighed by the number of employees I've seen abusing the system.

I don't know exactly what 'rights' the Tories suggest dismissing, but I hope they're not fundamental ones, but more those that allow SME's flexibility to meet market opportunity.

[DJKillaQueen]

They are fundamental ones though H...the most fundamental one being the right to challenge a dismissal if thought to be unfair. And whilst I agree that most empoyers operate fairly in hiring and firing, there are some that don't. Taking away someone's right to redress would be an open invitation to those employers. On the politics show today though, a good point was made that unless a company is part of the ftse the shares would have no meaningful value anyway, that the first ?10,000 of shares are exempt from CGT anyway and finally why would any small business want to give away it's equity? What happens if a company decides to fire a person that holds equity in it? Makes no sense whatsoever.

The real issue is the cost to small businesses in hiring people and the cost in getting them to leave. If the government wants to tackle that, then it should tackle that. Foregoing employment rights will not increase confidence or aid stability one iota.

There are other ways to help small business.

[thubay1]

Reference more :

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