More employees set to benefit from EMI options

More employees set to benefit from EMI options
Osborne Clarke

Although Budget proposals announced earlier this year indicated there would be an increase in the number of people eligible to claim Entrepreneur’s Relief, the draft proposals released this week have extended the eligibility criteria much further than many believed they would. According to the draft proposals, an employee who disposes of shares obtained under an Enterprise Management Incentive scheme can claim Entrepreneur’s Relief on any benefit they obtain, providing they have held the shares for the twelve month qualifying period.

The draft proposals also state that this extension of eligibility for Entrepreneur’s Relief will apply regardless of whether the shares where obtained at market value or at a discounted rate. Shareholders must normally hold at least 5% of the company’s shares to qualify for Entrepreneur’s Relief so this amendment will result in an increase in the number of people eligible to claim Entrepreneur’s Relief and reduce their tax liability.

In addition to this, the draft legislation proposes to extend the 40 day limit to 90 days for employees to exercise EMI options after a disqualifying event. Companies who have existing all-employee share schemes may also benefit from the draft legislation which introduces a number of changes intended to simplify the administration of such schemes. Another advantage for entrepreneurial businesses under the draft legislation is the proposal to allow employees who give up some employment rights to benefit from a payment of £2,000-£50,000 without capital gains tax.

If enacted, the proposed changes will enable more people to claim tax reliefs thus saving people money. However, the law and regulations regarding taxation can be complex so individuals are advised to seek specialist advice before buying or selling shares, even if the shares are obtained under an Enterprise Management Incentive scheme. With more employees benefitting from Entrepreneur’s Relief, it is possible that more businesses will launch Enterprise Management Incentive schemes. By obtaining expert advice and ensuring they fulfil the eligibility criteria, companies can successfully launch schemes which incentivise their staff and enable employees to qualify for tax reliefs as well as benefitting from a new standard of flexible employment rights.

Osborne Clarke has a team of employment lawyers with proven track record in dealing with the toughest law cases, including those where there is considerable press interest. For more information please visit

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New employment laws result in changes to the workplace

New employment laws result in changes to the workplace
Osborne Clarke

The recent changes to employment legislation mean that there are likely to be significant changes to the governance of the workplace during 2013. This, in conjunction with our requisite compliance with EU law and the recent case law, is indicative of a changing environment for workers.

One of the most notable changes to employment law concerns the decision regarding equal pay claims. Rather than being subject to the six month time limit in which to bring a claim in an Employment Tribunal, employees can bring a claim in the High Court providing it is within the six year time limit without needing to justify their reasons for missing the Tribunal time limit. The decision benefits employees, particularly if evidence of unequal pay only becomes apparent after the six month Employment Tribunal time limit.

The case of Welton v Deluxe Retail Ltd resulted in employers being subject to more stringent requirements regarding dismissals or changes to terms of contracts. In addition to specifying an economical, technical or organisation reason for the change or dismissal, employers must show that it resulted in a need to change the workforce, that it affects the employee in question and that reason is more than ‘minimal’. This increases employee protection and ensures employers do not abuse the right to dismiss employees or make changes to their contracts.

The recent case of Redfearn v United Kingdom [2012] in the European Court of Human Rights has indicated a need for change to our national law. In order to comply with the decision, it is expected that the Government will introduce measures to outlaw discrimination based on political beliefs or opinion. Similarly, the Supreme Court based their decision in British Airways PLC v Williams and Others [2012] on an EU Directive and ruled when an employee’s wages are normally comprised of commission and bonuses this should be taken into account when calculating their holiday pay.

Although there have been significant changes to employment law during 2012, there are still issues waiting to be resolved. For example, there is on-going discussion regarding the appropriate time for collective consultations to start under the Trade Unions and Labour (Consolidation) Act 1992. The differing terms used in TULCRA and the Collective Redundancies Directive have left this open to interpretation but further clarification may be necessary. Similarly, the proposed changes to employment law, such as allowing employees to give up their rights in favour of additional remuneration, have caused much discussion. It is evident, therefore, that as the nature of the workplace changes, employment law will continue to evolve accordingly with many changes expected to take place throughout 2013.

Osborne Clarke is an international law firm with a team of employment lawyers with proven track record in dealing with the toughest law cases. For more information please visit:

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