Question

To ask the Secretary of State for Business, Innovation and Skills, pursuant to the Answer of 7 April 2014, Official Report, column 8W, on employee ownership, if he will bring forward legislative proposals to regulate the qualifications and independence of the independent advisers provided by companies to advise employees on their employee shareholder employment status.

In order for an individual to become an employee shareholder, the individual must obtain advice from a relevant independent adviser on the terms and effect of the proposed agreement. An employee shareholder employment contract is of no effect if an individual does not get independent advice before the agreement is made. It is in the interest of the individual to understand the employee shareholder contract and its implications before they accept a job.

Advice must be given by a qualified lawyer, certified trade union member, certified worker at an advice centre or a Fellow of the Institute of Legal Executives who is employed in a solicitor's practice. The law does not permit advice from a person employed by the employer to count towards fulfilling the legal advice requirement.

The law is already clear in this area. Government has drawn on the same legal mechanism detailing the provision of advice which is set out in the Employment Rights Act 1996.