Growth and Infrastructure Bill

Debate between Ronnie Campbell and Michael Fallon

Monday 17th December 2012 Commons Chamber

[Michael Fallon]

That will depend on the particular arrangement that the company has.

Amendment 31 will provide clarity and certainty to employers and individuals who are considering accepting a position as an employee shareholder, as it spells out how shares will be valued. It aids employers who want to be certain that the contract will not be void because too few shares in value have been given. It will therefore reassure individuals that they are getting at least £2,000-worth of shares in consideration for becoming an employee shareholder.

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

Can the Minister tell me what happens to a worker’s £2,000-worth of shares if the company goes bankrupt?

[Michael Fallon]

If the company goes bankrupt, the shares will clearly not have their original value.

I must respond to the hon. Member for Hayes and Harlington on amendment 39—I apologise for not doing so earlier. The amendment would remove the distinguishing feature of the new employment status and deprive companies of the flexible way of taking people on, because it would link directly back to employment rights.

I will now turn to the serious points raised by my right hon. Friend the Member for Hazel Grove (Andrew Stunell) and my hon. Friend the Member for Burnley, first in relation to amendment 41. The amendment seeks to ensure that individuals in receipt of benefits should not be disadvantaged if they turn down an employee-shareholder contract. I would like to reassure the House about what the Government have done to ensure that employee-shareholder status does not lead to jobseekers being deprived of benefits if they decide not to take a job they have been offered on the basis of the new status.

My right hon. Friend the Member for Hazel Grove proposed in Committee that the Government should issue guidance to ensure that an individual’s refusal to enter the status voluntarily is not used as grounds for withdrawing or reducing state benefit. He suggested that that should be made explicit in the Bill. The Government recognise that the status should not be regarded as suitable for all businesses or individuals and should therefore be entered into voluntarily and with a clear understanding of what it will mean for them. Although I made it clear in Committee that his proposed amendment would not work, I accepted that it is a serious matter and undertook to consider it carefully. I think that the matter was also raised on Second Reading by the shadow Secretary of State.

The Government have therefore considered what safeguards would be needed to ensure that the individuals receiving benefits are not deprived of them if they reject a job offer as an employee shareholder. I can confirm that the Employment Minister, my hon. Friend the Member for Fareham (Mr Hoban), has also looked at that carefully. The Government believe that jobseeker’s allowance claimants must actively seek and be available for work. That must include consideration of all suitable vacancies, and it is right that employee-shareholder jobs should be as much a part of that consideration as any other. If a claimant applies for an employee-shareholder job and is offered a position, they should normally accept the offer. If they do not, their benefit payments might be sanctioned if they do not have good reason for refusing the offer. Exactly the same rule applies now.

However, in considering whether the claimant does or does not have good reason, the decision maker will take into account the claimant’s individual circumstances and the specific terms and conditions on offer under the company’s employee-shareholder scheme. It is certainly possible to envisage situations where a job that is appropriate for one person may not be for another. For example, the right to request flexible working could well be crucial for a parent with young children and that may therefore be good reason for that parent to turn the job down if they cannot negotiate flexibility.

So that advisers are able to help claimants to make the right decision about employee-shareholder positions, we will provide guidance and information to them on what the status means and the factors that a claimant will need to take into account before making the decision. We will want to ensure that claimants make the right decision, which might be that they decide voluntarily to accept a job on employee-shareholder status. I confirm to my right hon. Friend the Member for Hazel Grove and to the House that we will provide guidance for decision makers to help them to reach consistent decisions in this area, and we will now seek views from key stakeholders to make sure that that guidance is fit for purpose.

The current guidance for decision makers, “Decision Makers’ Guide”, is on the Department for Work and Pensions website. We propose to amend chapter 34 of that guidance to ensure that it is available to decision makers in jobcentres. That safeguard can be put in place without the need for legislation, and the necessary changes will be made when employee-shareholder status is legally implemented.