Business responds positively to Coalition's employment law reforms
Small business owners have welcomed recent changes to employment law, seeing fairness and balance restored in some key areas according to latest research report from the Forum of Private Business.
Over half of Forum members believed the Coalition's reforms have made employment regulations fairer, particularly around recruitment and termination of employment. Simplified employee checks through the Disclosure and Barring Service along with the introduction of settlement agreements earlier this year have been recognised by small employers as positive developments, with 51% of small businesses looking to employ staff, saying these changes would make them more likely to take people on.
However, despite the positive reaction to some of the reforms, only 2% of Forum members believe that the regulatory changes allowed for flexibility, one of the Government's key strategic aims. Incoming regulatory change for shared parental leave and the extension to the right to request flexible working, 45% of small employers believed the reforms would have a negative impact on the way they run their businesses.
Commenting on the report, Alexander Jackman, Head of Policy at the Forum of Private Business, said: "On the whole Forum members have welcomed the direction the government is taking on employment law reform. Employment regulations have long been seen as weighted in favour of employees and it is good to see some balance returning.
"However, our members feel that further action is needed from the government on regulations around people management. Further reforms must recognise the nature of small businesses and government cannot regulate for regulation's sake. The Coalition government said it would always regulate as a last resort but that principle is being sidestepped on some policies. For instance, proposals on flexible working for employees will in practice impose structures that limit the flexibility of employers in managing their staff."
On future reform the report also reveals that 75% of the small businesses surveyed wanted to see a reduction in the cost of employment, 60% wanted further reductions to the amount of administration when employing people and 55% called for greater tax benefits for smaller employers.
Mr Jackman continued "The Employment Allowance coming in next year will satisfy those seeking greater tax benefits for small businesses though some may use the allowance to fund compliance training for new regulations. Government must recognise that it is not just the overall level of regulation that is burdensome, but their constant changing too."