The government has demonstrated its intention to allow employers to force prospective employees to give up key employment rights in return for a so-called “share” in the business.

BIS’s consultation on “implementing employee owner status” gives respondents just three weeks to respond to questions on introducing the scheme in practical terms, not on whether it should happen at all.

The consultation, which closes on 8 November, states that the new employee status will be implemented by way of the Growth and Infrastructure Bill, which had its first reading in the House of Commons on 18 October. The capital gains tax exemption will be legislated as part of the Finance Bill 2013.

According to employment relations minister Jo Swinson, employee owners will have the same rights as current employees apart from unfair dismissal (except where this is automatically unfair or relates to anti-discrimination law), certain rights to request flexible working and training, and statutory redundancy pay. Individuals will also need to give 16 weeks’ notice to return from maternity or adoption leave instead of eight.

These hard-won employment rights will be exchanged for shares of between £2,000 and £50,000 of shares that are exempt from capital gains tax.

The plan, announced by Chancellor George Osborne at the Conservative Party conference has been criticised by unions and businesses as a licence to fire at will.

Thompsons warned that far from it being just for new staff, unscrupulous employers could abuse the scheme by dismissing an entire workforce and imposing it as new terms and conditions on re-engagement.

The government has indicated that companies should be able to use the new type of contract from April 2013.

To respond to the consultation, visit the Business, Innovation & Skills website.

Read Thompsons response to the government's plans