An end to employment law 'tinkering'? Don't count on it

The government might have pledged to address the mountain of red tape currently strangling UK employers, with its much-heralded "one in, one out" approach to business legislation, but small firms have yet to notice much of a difference.

In fact, the BCC has calculated that new employment laws due to come into force over the next four years will cost UK firms 22.87bn to implement. (No word as yet on which laws, if any, are being scrapped to make room for them).

The lobby group's Employment Timeline lists the employment laws due to be implemented between now and April 2015, such as changes to the right to request flexible working, paternity leave, and the abolition of the default retirement age, and includes seven major changes scheduled for this year alone.

Despite the government's express claims to move away from the "tinkering and meddling" that it said characterised Labour's term in office, the BCC has accused the coalition of doing just that, citing three proposed changes to parental leave over the next four years as a case in point.

Such constant revisions are distracting (not to mention confusing and costly) for businesses, particularly smaller firms. Red tape is frequently cited as one of the biggest barriers to growth by small business owners, who report spending hours bogged down by administrative duties - which could be spent focusing on their core business.

The BCC urged the government to put its money where its mouth is by beginning the deregulation process, and scrapping some of the costly employment laws that are stifling business growth.

Here's a pick of some of the new laws that are in the pipeline, and how much the BCC claims they will set UK businesses back:

• 2011: The Right to Request Time off to Train, which will costs businesses £174.96m a year

• 2011: The Agency Workers Directive, which will cost businesses £1,548m a year

• 2012: The Pensions Reform, which will have an annual recurring cost to business of £4,526m.

"The government claims business growth is top of the agenda, yet UK firms will be hit with huge costs once these new regulations come into force," argued David Frost, director general of the BCC. "Companies cannot generate growth and create jobs when they are facing a £23bn bill just to implement new employment legislation.

"The government must use the upcoming Budget to act on its promises and deliver concrete reductions to the regulatory burden faced by the private sector, so that it can deliver a year for growth in 2011."

On a more positive note, the BCC welcomed the government's promised reforms of the employment tribunal system, which employers often criticise for being too slow and weighted in favour of the employee.

However, as yet there is no timescale for the reforms, and the BCC noted that any potential savings to businesses will be "dwarfed" by the cost of new employment legislation.



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