Sainsbury's chief executive Justin King criticises shares-for-rights proposal

The chief executive of J Sainsbury, one of the biggest employers in the UK, has denounced George Osborne’s proposals to offer company shares to workers in exchange for surrendering their employment rights.

The shares-for-rights scheme formed the core of the Chancellor’s speech at the Conservative Party conference on Monday and is particularly designed to help start-up companies.

However, the criticism from a key business figure such as Justin King, who is in charge of more than 150,000 workers, is a setback for Mr Osborne’s plans.

Greg Campbell, employment partner at law firm Mishcon de Reya, said: “That the Government has indicated only a six month lead time on such a significant scheme is astonishing.

"There a number of issues yet to be resolved before implementation in April. Will employers force new employees to join on these terms – and not hire those who don’t?

"Will the shares give the owner-employee any degree of control over the business? How will shares for departing employees be valued and paid for?

"Clarity is lacking in a number of areas and needs to be addressed before we can understand how it can work at all successfully in practice."

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