Firms fear employment changes fallout

Many businesses are worried that changes to employment law such as extending paternity leave and scrapping the default retirement age will prove detrimental to business, a survey has shown.

More than 50% of the 1,300 companies questioned by the British Chambers of Commerce (BCC) said they think the paternity leave changes will affect their business.

Meanwhile, 20% are more worried about the effect scrapping the default retirement age will have on their ability to manage their workforce after the age of 65.

David Frost, director general of the BCC, explained that there is great concern among employers who have to spend more time coping with shifts in employment law than running their business.

He added that every proposed change, no matter how small, costs businesses time and money, increasing the burden on employers and maintaining barriers to job creation and economic growth.

David Frost, director general of the BCC, said: "In the face of promises by the Government to listen to the needs of business and cut red tape, these two new pieces of employment regulation will hit businesses hard.

"The Budget revealed a policy to exempt start-ups and existing firms with fewer than 10 employees from new domestic regulation, but this week's changes show there is an urgent need to review and scale back policies already on the statute books.

"The Government must go a step further and show all businesses that it is serious about deregulation. Arguably, any exemptions should include a wider scope of firms, not just micros."

Justin Govier, Partner in IBB's Employment team, comments: " There is no doubt that businesses, particularly smaller ones, felt left a little battered and bruised by these changes. However the Government has recently announced a number of proposals designed to appease such concerns and promote growth in such businesses, for example: proposals for a thorough review of the Employment Tribunal system; firms employing less than 250 employees continue to be exempt from the Right to Request Time to Train; 'One In One Out' on new Regulations; no goldplating of European rules so the domestic legislation merely replicates what Europe directs (and nothing more); sunset clauses on all Regulations to ensure they are reviewed regularly to ensure their rationale is still valid; and a three-year exemption for new regulation for businesses with less than 10 employees on nearly all new regulation."

Our Employment team provides advice on the employment aspects of all major business decisions. For advice, contact a member of the team, call us on 08456 381 381 or email enquiries@ibblaw.co.uk.