GOVERNMENT MUST THINK SMALL FIRST ON EMPLOYMENT LAW
By: Alex Askew | Posted: 30th March 2011
The confederation of British Industry (CBI) has called for the Government to “think small first” and think about reviewing regulations that prevent family owned and one-man companies from creating jobs and growing their business.
The CBI released a report called “Think Small First” which highlighted the potential ability for small to medium sized businesses to help pick up employment in the economy.
Research shows that a massive 60% of private and family owned businesses cite employment regulation as a barrier to job creation.
The CBI proposals include: speeding up the tribunals system; providing clear guidance in the absence of a default retirement age; introducing the right to an annual review of flexible working and to agree a return date with an employee going on maternity leave.
John Cridland, CBI Director-General, said:
“Smaller firms are job-creation dynamos. The Government must think small first by tackling regulation which distracts them from growing the business and creating jobs.
“Much employment law fails to recognise that private and family-run firms don’t have dedicated human resource teams and tend to manage staff in an informal way.
“The size and nature of these firms makes them strong advocates of flexible and family-friendly working, and the Government should build on this success. An annual review on flexible working would ensure that competing requests could be managed fairly, while agreeing a return date with employees going on maternity leave in advance would help firms plan for the future.
“If the Government gets the law right for small firms, it gets it right for all firms. Thinking small first would better harness the potential of SMEs, rather than simply exempting some of the smallest from aspects of the law that undermine growth.”
The CBI has set out proposals which illustrate how a “think small first” approach would benefit companies of all sizes, but particularly SMEs. These include:
• Extending the unfair dismissal qualifying period to two years. This would reflect the limited HR capacity of SMEs and give them more confidence to hire
• Requiring tribunals to make practical use of current legal defences based on the size of firms
• Reforming the ACAS code to give greater support to smaller firms
• Introducing a package of measures to allow firms to manage retirement with confidence in the absence of a default retirement age
• Improving the speed of resolution of employment tribunal claims. This should include requiring pre-hearing reviews with the power to strike out weak claims, a refundable fee per claim to discourage opportunistic multiple claims and greater efforts to encourage settlement between employee and employer
• Giving firms the right to have an annual review of flexible working arrangements, and to redistribute flexible working as employee needs change. For instance, asking parents of older children to increase their hours to allow a returning mother some access to a limited pool of flexible hours
• Allowing smaller firms to ask someone going on maternity leave to specify when they plan to return, with the expectation that this date will be kept to unless employer and employee both agree to change it.
• Issuing better guidance on managing competing flexible working claims.
Danbros Business Development Manager Mike Rhodes said: “The government must look at the proposal put forward by the CBI. There seems to be a proliferation on red tape being introduced and it is impacting the small to medium sized businesses. We provide Accounting services for contractors wanting to set their own limited companies up; with more and more regulations to be aware of, it can be quite off putting.”
Danbro are one of the UK’s most reputable
Limited company accountants in the UK. Visit www.danbro.co.uk.
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Tags: advocates, medium sized businesses, retirement age, human resource, cbi, job creation, maternity, first approach, unfair dismissal, employment law, smes