Are businesses facing an employment law headache?

The Government has once again been criticised regarding the growing complexity of employment law.

The Federation of Small Businesses (FSB) claims that businesses are facing a “growing headache” due to increasing amounts of legislation.

According to the FSB its helpline saw an overall rise of 8% in the number of calls it received in 2006, with over 76,000 calls coming in last year at an average rate of over 200 per day.

The main areas of concern, that have seen large increases since 2005, were:

• age discrimination – up 664%; 
• information and consultation – up 439%;
• part time workers up 68%;
• pensions 23%;
• retirement 88%; and
• other forms of discrimination such as on religious or sexual orientation grounds by 92% and 56% respectively.

The FSB is not the only business group to raise concerns over the increasing amounts of employment legislation.

In its publication, Lightening the load: The need for employment law simplification, the Confederation of British Industry (CBI) claims that, based on the Government's own Regulatory Impact Assessments, new employment legislation has cost firms £37bn since 1998.

Three-quarters of employers told the CBI that time spent administering and complying with new rights was damaging their business. Half said that labour costs have increased and a third say they have adversely impacted on their ability to compete.

In its report, the CBI calls on the Government to restrict itself to one employment bill in each Parliament. It also calls for a review of the impact and effectiveness of new regulations no more than two years after implementation.

It would also like the Government to adopt several other policies in relation to future legislation:

• Implementing EU Directives is often more onerous than necessary – all that is required is a clear statement of principles.
• The Government should extend its pledge to simplify guidance on maternity leave to all other employment legislation.
• The Government should take back the administration of statutory maternity and statutory sick pay where employers wish it to do so because of the high administration cost.
• SMEs should be provided with a Government-funded low-cost, shared HR resource delivering common sense, comprehensive advice on the full range of employment issues.

As Workplace Law previously reported, a recent report by Professor Paul Edwards, from the Industrial Relations Research Unit at Warwick Business School, says that the cause of “justice at work” will not be best served by introducing any new employment laws in the near future. Instead, what is needed is a new initiative to encourage employers both to comply with existing laws and actively pursue a “fairness at work agenda”

In the report Edwards highlights that a false assumption often is “if you legislate for something then it happens automatically”.