The survey of 250 SME managing directors and owners by Illuma Research for career management consultancy Right Management found that the majority of small businesses, or 87 per cent, feel they comply with legislation.

The further south in the UK small businesses are based, the more companies feel they act in accordance with employment law, despite its complexity.

In Scotland, the figure is 84 per cent, increasing to 90 per cent of SMEs in London and the south east who feel they comply with employment regulations.

That leaves some companies failing to comply, with the complexity of legislation making it harder for them to conform.

Right Management’s managing director, Jayne Carrington, says, ‘The government should allow companies to focus on developing their business rather than focusing on complex legislation. That’s vital if SMEs are to be more successful in the future.’

Small businesses ignore employment laws

SMEs are not fully adhering to employment laws, with two-thirds failing to implement legislation, according to a survey from Business Link.

Of the 314 businesses surveyed, 33 per cent say they are unaware of the obligations they have as an employer, 19 per cent are aware they have obligations but are not confident in actioning them and 13 per cent feel it is not their role to do so.

Lord Young, employment relations minister, says: ‘This study helps us identify the knowledge gap, and the reasons behind this, to enable us to continue to improve the advice and support we offer. I expect all small businesses to access this help for free on the Business Link website to make sure they know their responsibilities.