Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Employee definition

What does Employee mean? Describes an individual engaged under a contract of employment (a contract of service) who enjoys the fullest employment law protections, such as unfair dismissal, redundancy pay, statutory notice and much family leave. In practice, employee status is determined by legislation read with case law on the reality of the relationship, typically examining personal service (no unfettered substitution right), employer control, and mutuality of obligation, alongside integration and other indicia. In England & Wales and Scotland, the Employment Rights Act 1996 defines an employee as an individual who has entered into or works under (or, where employment has ceased,...

UK Employee Share Ownership and Incentive Schemes: Types (EMI, CSOP, SAYE, SIP, LTIP, JSOP, EOTs) and Key Implementation Issues

Published by a LexisNexis Share Incentives expert

Practice notes

This Practice Note sets out:

why companies adopt employee ownership models
the principal types of share ownership models, and
issues to weigh when implementing a share scheme

For a more detailed analysis of why companies use share schemes, see Practice Note: Why do companies use share schemes?

Why do companies have employee ownership?

Employee ownership usually arises in the following situations:

business succession or ownership succession — private owners, such as an entrepreneur or a family business, choose to sell all, or more often, part of their shareholdings to their workforce
insolvency or closure threat — employee buyouts can be an effective route to recovery for businesses that might otherwise fail
independence — companies may determine that a significant, even majority, employee stakeholding will signal and help protect the company’s independence
privatisation — the privatisation of various companies has occasionally created opportunities for employee buyouts, and
owner vision and incentivisation — as with John Lewis or Arup Group, at start‑up or later, the founder of a business elects for employee ownership...

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Web page updated on 21/05/2026

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