Small businesses feel threatened by more employment legislation

Small business organisation the Forum of Private Businesses (FPB) has condemned the proposed review of employment laws announced by Trade & Industry Secretary Patricia Hewitt.

Small business organisation the Forum of Private Businesses (FPB) has condemned the proposed review of employment laws announced by Trade & Industry Secretary Patricia Hewitt. The Forum fears its members will be hit hardest by new regulations.

Garry Parker of the FPB believes re-examining the employment laws is “totally unnecessary.” He is very worried about the possible effects on small firms of increased employee rights and yet more associated red tape.

In the first quarter of this year, members of the FPB voted red tape as the biggest problem they face, with employment legislation as the fourth biggest. As Parker points out, the mention of employment regulations is an extension of complaints about bureaucracy, but it is listed separately due to the scale of the problem.

He foresees a scenario where employers are “afraid of employing people” because of the time and costs of dealing with the regulations. Research by the organisation suggested that owner-managers spend around 10 hours a week doing this.

Parker is also concerned that increased employment rights could lead to a greater tendency towards litigation, which would obviously take up more time for an employer as well as any associated legal costs.

The speed of change and complexity of employment laws is hitting businesses hard. This is a particular problem for most SMEs, which do not have a human resources department qualified to cope with the legislation.

In addition, Parker says, the extra costs involved are more likely to impact on the “bottom line,” as they cannot easily be passed onto the customer. Profits and competitiveness will suffer, he says.

The exact laws to be reviewed have not yet been revealed, but those being looked at concern paid parental leave and the rights of temporary workers. The latter could have far-reaching effects as it encompasses short-term contractors and seasonal workers as well as agency workers.

Business owner-managers wishing to keep up to date with developments in employment legislation and the battle against bureaucracy should visit www.fpb.co.uk.

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