New plans come into force in April that suggest giving employees shares as long as they agree to waive certain rights.

But John Mehtam, the employment law specialist at Martin-Kaye Solicitors, in Telford, said employers could be giving away shares in their company needlessly.

“The new type of contract says that in return for shares in your company, the employee would give up their rights on unfair dismissal, redundancy, the right to request flexible working and time off for training.

“But in fact, when it comes to new staff, they are not actually entitled to unfair dismissal or redundancy rights until they’ve worked for you for two years.

“So they’re only really giving up the right to request flexible working and time off for training, and in reality they don’t have any automatic right to either – more importantly, these rights don’t even begin from the first day they join you.”

John warned though that even more worryingly, if someone on the new type of contract left the company or had to be sacked, the employer would not automatically get their shares back.

“So anyone who left under a cloud, or who wanted to be awkward, could hold you to ransom because you’ll have to pay to get the shares back.”

The new owner-employee contracts will be open to all new staff if the company wants to implement them, but they will be optional for existing employees.

“Clearly even though these contracts may seem like a good idea, as an employer you would be giving away far too much with very little in return,” said John.

“Employers should make sure they are fully informed of the tiniest details before taking this approach – or you may risk your company’s future without any need to do so.”