There are many ways that employees can own a stake in their employer's company. However, employee ownership usually refers to a situation where all employees of a business have a ‘significant and meaningful’ stake in a business. This means employees have a financial stake in the business (e.g., by owning shares). Other types of business (e.g. charities or sole traders) may have to change their legal structure so they can sell shares. Employee-owned firms can also operate as co-operatives.

In addition, employees must have a say in how the business is run, known as ‘employee engagement’. Different ways of engaging employees are suitable for different businesses.

These can include:

  • An employees’ council or other consultation group.
  • A constitution defining the company’s values and its relationship with employees.
  • Employee directors on the board, with the same responsibilities as other directors.
  • Working with trade unions on issues like pay and conditions.

The latest statistics published by the Employee Ownership Association (EOA) say that the employee ownership sector has more than doubled in the past three years, exceeding the 1,000 milestone for the first time.

Source: HM Revenue & Customs Tue, 16 Aug 2022 00:00:00 +0100
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