Employee Shareholders

Introduced in September 2013, “employee shareholder” status is a new category of employment status. In exchange for entering into an agreement for a minimum amount of shares in their employer’s business, the “employee shareholder” gives up certain employment rights. Strict rules regulate these agreements, including a requirement that an employee must have independent advice before entering into such an agreement.

Employee shareholders are not able bring claims for unfair dismissal or statutory redundancy payments, and they are not able to make statutory flexible working requests (except in the 2 weeks after returning to work from parental leave). They are also expected to give 16 weeks’ notice when returning to work after taking additional maternity, adoption, or paternity leave. However, employee shareholders can still bring claims for automatic unfair dismissal and discrimination.

Employee shareholder agreements entered into on or after 1 December 2016 will not qualify for certain income tax and capital gains reliefs available for agreements entered into before that date. 

This advice applies in England, Wales and Scotland. If you live in another part of the UK, the law may differ. Please call our helpline for more details. If you are in Northern Ireland you can visit the Labour Relations Agency or call their helpline Workplace Information Service on 03300 555 300.

If you have further questions and would like to contact our advice team please use our advice contact form below or call us.

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