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17 March 2010 Employment law ‘stifling UK businesses’

The ‘relentless flow’ of complex employment law is stifling UK competitiveness and jeopardising future job creation, a leading business group has warned.

A new report published by the British Chambers of Commerce (BCC) argues that basic workplace protection rules have been replaced by ‘burdensome’ rights to request and extended time-off provisions. It also suggests that ‘unreasonable’ health and safety restrictions are adding to the red tape burden.

‘There is an emerging consensus that employment law is now weighted too far in favour of the employee,’ said David Frost, Director General of the BCC. ‘Many rights come from EU legislation, which is informed by and aimed at labour markets very different to our own. The result is that the UK and the EU are becoming increasingly uncompetitive due to the rising cost of labour.’

The study, entitled Employment regulation: up to the job?, outlines a number of proposals which the lobby group claims will ‘reduce and rebalance’ the burden of employment legislation.

Calling for an ‘urgent overhaul’ of the UK’s ‘dysfunctional’ tribunal system, the BCC recommends that employers should not have to wait more than 16 weeks for a first tribunal hearing.

It also suggests that the law should be changed to allow employee dismissal if an employer ‘reasonably believes’ that a member of staff’s actions constituted gross misconduct.

‘Encouraging job creation – and therefore wealth creation – must remain the Government’s priority as economic recovery continues,’ added Mr Frost. ‘A three year moratorium on the implementation of new employment law is crucial, as is cancelling the 1% hike in employer National Insurance contributions, planned for April 2011.’