Your Business March 2020 - 73

MARCH _ 2020

"EMPLOYEE OWNERSHIP
TRUSTS ENABLE
ALL EMPLOYEES TO
PARTICIPATE IN THE
FUTURE VISION AND
SUCCESS OF A BUSINESS"
Employee engagement

"COLLABORATIVE INITIATIVES
SUCH AS THIS AREN'T JUST GOOD
FOR EMPLOYEES, THEY ARE
GOOD FOR BUSINESS TOO"
ownership ethos. Employees are
encouraged to take responsibility for
maximising their contribution to the ﬁrm
as employees, to receive information
about major policies and actions and
have an opportunity to inﬂuence such
policies. HJA's staﬀ committee has four
elected representatives and a chair and
meets quarterly with management.
A key advantage of using an EOT
is that it enables succession of a
business's identity and represents a
way for a business to pass to the next
generation without taking on new

outside partners. The downsides of a
merger, a takeover or private equity
investment are obvious in this regard.
This business structure also has tax
advantages for the shareholder in respect
of the initial disposal of the business to the
trust, and it enables tax-free distributions
to employees up to a maximum of
£3,600 per annum per employee.
An important prerequisite, of course, is
an ownership cohort who share the same
vision for the business and are prepared to
back the business continuing to grow and
to wait to be paid for their shareholding.

"AS AN EMPLOYMENT
LAWYER, I REGULARLY
ADVISE MY CLIENTS
ABOUT IMPLEMENTING
ORGANISATIONAL
CHANGE" SUSIE AL-QASSAB,

It's important to seek specialist advice at
an early stage because depending on the
current structure of the business, a move
to an EOT may trigger TUPE regulations,
for example if there is a transfer of the
business from an LLP to a limited company
prior to the shares being sold to the trust.
Even if there is no legal requirement
for employee consultation, it is
important to involve the staﬀ early
in the conversation. Canvass their
views, be clear with them about what
the transfer actually means to manage
expectations, and be prepared to answer
questions. As with any organisational
change, employees can be fearful about
how their role within the business
might be aﬀected. Reassure them that
the transition will involve no material
change to their terms of employment
or their employment rights. Make sure
they are aware of the beneﬁts that
moving to an EOT has for them.
Collaborative initiatives such as this
aren't just good for employees, they are
good for business too: studies indicate that
a workforce with a vested interest in their
company are more productive, less likely
to move jobs and are more innovative.
Susie Al-Qassab is Head of the
Employment Law team at Hodge
Jones & Allen Solicitors, advising
businesses committed to purpose
and people not just proﬁt

For more information visit hja.net
or call us on 0808 239 7825

HEAD OF EMPLOYMENT LAW

YB2020 Hodge Jones and Allen Solicitors DPS jw4.indd 73

11/02/2020 15:43
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Your Business March 2020

Table of Contents for the Digital Edition of Your Business March 2020
