Turning employees into shareholders

The Herald reports on a policy just announced by UK Chancellor George Osborne:

The chancellor then sprang a surprise with his plan to swap shares for rights.

Workers could buy up to £50,000 in shares of the company they work for with all profits being tax free. In exchange employees would abandon their rights on unfair dismissal, redundancy and flexible working.

British unions immediately opposed the plan, which is due to come into effect in April 2013.

So long as it is voluntary, I think this is a nice idea. Businesses work better when employees have a stake in it as shareholders. However not sure one does it by way of tax breaks.