Letter to RM issue of shares (point raised by Geoff in chat)

[stephen500]

Dear Gary Redmond,


Please note this is an open letter and your reply will be shared with others.


I am led to believe that the Growth and Infrastructure Act 2013 section 31 amends section 205 of the Employment Rights Act 1996 and "in doing so seems to indicate that acceptance of the offer of our shares will heavily alter and diminish [our] employee rights."

"Including:

(2)An employee who is an employee shareholder does not have—
(a)the right to make an application under section 63D (request to undertake study or training),
(b)the right to make an application under section 80F (request for flexible working),
(c)the right under section 94 not to be unfairly dismissed, or
(d)the right under section 135 to a redundancy payment."


It appears that this applies if the share issue meets the min requirement of £2000.

Can you please look into this and let me know if this is the case, as I will want to decline the offer of free shares if this would affect my rights in the case of "unfair dismissal" or future possible "redundancy payments".

Others may want to reject them to protect "flexible working".


Yours Sincerely,

[mucker]

Excellent letter...........

[stephen500]

Excellent letter...........

Most of the thanks must go to Geoff, as I have cut and pasted much of his points as he raised them! So thanks to Geoff!

[pants123]

can the shares being offered, be rejected then by the individual ?????

[fishtank]

This is not a "shares for rights" offer.
If you read the statement issued by Royal Mail it states that...

• in accordance with HMRC Share Incentive Plan rules, employees will be required to hold the shares for at least three years through a specially appointed trustee. Full tax benefits are only available if the shares are held for at least five years or for ‘good leavers’;


For a Share Incentive Plan to gain and keep the tax and National Insurance contributions (NICs) advantages available it must be approved by H M Revenue & Customs (HMRC).

The rules...
http://www.hmrc.gov.uk/shareschemes/sha ... visors.pdf" onclick="window.open(this.href);return false;

A company must not include any requirements for participation in a Share
Incentive Plan other than those permitted by the legislation referred to in this
guide (Para 11 Sch 2).
The Plan must not contain any features that might discourage any of the
eligible employees from participating.

The main reason to use an HMRC Share Incentive Plan is to avoid paying tax and National Insurance.That's why you have to keep them for 3-5 years.

In a Shares for Rights deal the first £2,000 worth of shares received are free from income tax and national insurance contributions already.

[stephen500]

This is not a "shares for rights" offer.
If you read the statement issued by Royal Mail it states that...

• in accordance with HMRC Share Incentive Plan rules, employees will be required to hold the shares for at least three years through a specially appointed trustee. Full tax benefits are only available if the shares are held for at least five years or for ‘good leavers’;


For a Share Incentive Plan to gain and keep the tax and National Insurance contributions (NICs) advantages available it must be approved by H M Revenue & Customs (HMRC).

The rules...
http://www.hmrc.gov.uk/shareschemes/sha ... visors.pdf" onclick="window.open(this.href);return false;

A company must not include any requirements for participation in a Share
Incentive Plan other than those permitted by the legislation referred to in this
guide (Para 11 Sch 2).
The Plan must not contain any features that might discourage any of the
eligible employees from participating.

The main reason to use an HMRC Share Incentive Plan is to avoid paying tax and National Insurance.That's why you have to keep them for 3-5 years.

In a Shares for Rights deal the first £2,000 worth of shares received are free from income tax and national insurance contributions already.

What I want to find out is, has the Growth and Infrastructure Act 2013 section 31 affected this in any way?

[Visionary Man]

I see nothing in fishtanks information he has posted to make me think we wouldn't come under the legislation. It's worth noting too that the debate on this seemed to end about mid march and that bill passed through lords last part of April with no media fanfare at all.

It definitely needs clarifying before I'm willing to accept any shares.

It is all the convenient timing, the language used in the Act, and seemingly perfect flotation number for a 10% share value in relation to the numbers of staff resulting in the value being £2000 that makes it all seem coordinated.

I am guessing that if you are part time you may not have sufficient share value to come under the legislation? But I'm guessing RM wants as many people on PT shifts as poss.

Geoff

[TrueBlueTerrier]

http://www.morganlewis.co.uk/index.cfm/ ... d7ca8623b3" onclick="window.open(this.href);return false;

For any acceptance to be valid, the employer must have provided the employee with a statement of particulars that sets out, among other things, the following:

The rights the employee shareholder gives up
The rights attached to the shares, e.g., voting, dividend, and ability to participate in the distribution of any surplus assets on winding up
Whether there are any restrictions on the transferability of the shares
Whether the employee shares are subject to drag-along rights or tag-along rights

So my reading of this is that despite my earlier concern over the shares, Fishtank as usual is absolutely correct. Without the statement, the ability to decline, and to be able to claim for legal advice - then privatisation shares won't come under this "Employee Shareholder" Legislation.

[fishtank]

I see nothing in fishtanks information he has posted to make me think we wouldn't come under the legislation.

The simple fact that the shares will be in lockdown for 3-5 years before they can be sold tax free tells us it's not a "shares for rights" deal.

Shares acquired under an Employee Share agreement(shares for rights) are tax and NI free from day 1 because HMRC consider that you have paid for the shares by "selling" your rights.

http://www.hmrc.gov.uk/budget2013/tiin-1008.pdf" onclick="window.open(this.href);return false;

The first measure will exempt any capital gains made by individuals on the disposal of shares acquired through the adoption of the 'employee shareholder' employment status from capital gains tax (CGT). The second will reduce or eliminate the income tax and National Insurance contributions (NICs) due when employee shareholders acquire shares, by
deeming that they have paid £2,000 for the shares. This will ensure that the first £2,000 of
share value received by employee shareholders is not subject to income tax or NICs.

[clashcityrocker]

I can't see anything in Fishtank's response which means I won't have to give up my first born child to my DOM who will eat the liver and brains.
Why aren't the CWU all over this?
I will certainly not be accepting any shares without further clarification.

[stephen500]

I have written to and have received an acknowledgment from Gary Redmond re an e-mail (published at the start of this thread) about the possible effects of the Growth and Infrastructure Act 2013 section 31. Mr Redmond has promised to get back to me and I will publish his reply. I have also written to my Mp asking for Vince Cable (Mp) and or Michael Fallon's (Mp) opinion as ministers. I will publish all replies. If any one else writes to the above and you receive a reply, would you be good enough to forward a copy to dward@cwu.org or bhayes@cwu.org.

[stephen500]

I have written to and have received an acknowledgment from Gary Redmond re an e-mail (published at the start of this thread) about the possible effects of the Growth and Infrastructure Act 2013 section 31. Mr Redmond has promised to get back to me and I will publish his reply. I have also written to my Mp asking for Vince Cable (Mp) and or Michael Fallon's (Mp) opinion as ministers. I will publish all replies. If any one else writes to the above and you receive a reply, would you be good enough to forward a copy to dward@cwu.org or bhayes@cwu.org.

Interesting to note that RM will give you an offer to decline the shares!

[Visionary Man]

Excellent Stephen!

Thankyou!

[stephen500]

" "Our Ref GS 11.0 (Just to show members that CWU HQ is aware of this issue, I wrote to them about this Act after Gary on RM chat made me aware of it. This is the reply from CWU HQ)

Dear Mr **********,

Thank you for your emails to the CWU General Secretary, Billy Hayes and to Dave Ward, Deputy General Secretary. We appreciate also the copy of the emails sent to your MP [*********] and Royal Mail.

You would wish to know that the issue of free shares and the consequences of such an employee offering is been considered by us – and therefore we appreciate the information you have supplied in this regard. Should you receive responses to your enquiries perhaps you can forward these again to Billy Hayes and Dave Ward.

Regards,

Andrea Snowden

Head of Administration

General Secretary's Office"

[clashcityrocker]

......is been considered by us.......

I wouldn't want anyone considering anything on my behalf if they can't write - "being considered by us.....