Business News
Government urged to reduce red tape on employment law
A number of business groups have criticised the government’s moratorium on employment law, leading many to urge ministers to do more to ease the red tape burden on micro firms.
After the Institute of Directors (IoD) branded the moratorium as nothing more than ‘a gimmick’, John Walker, chairman of the Federation of Small Businesses (FSB) commented, “The Government has talked a good game on deregulation. But small firms are still waiting to see action on the ground that matches the rhetoric. Firms have still had to get to grips with big changes in employment law and the moratorium for micro-firms is still to take effect.'
The FSB’s argument is that the government should tackle both domestic rules and the flow of EU regulations impacting on small businesses in order to make real, effective progress on easing the regulatory burden.
Introduced in the last budget, the scheme offers micro firms (businesses that employ less than ten staff) with a three year exemption from new employment laws. However, it is the IoD’s claim that during 2011, micro firms were not exempt from a single regulation, and it does not expect the government’s moratorium to make any real difference in 2012 either.
As the IoD’s head of regulatory affairs, Alexander Ehmann explains: “It's the Emperor's New Clothes. The moratorium exists but it hasn't been applied to anything. Unless it is applied to something it is meaningless.”
For the moratorium to make a real impact to micro businesses, the IoD has suggested that the government retrospectively applies the rule to the myriad of regulations that came into force last year, including the changes to paternity leave and the removal of the default retirement age.
In response to the criticism, a Department for Business spokesperson commented: “We are confident that there will be no significant new burdens on micro businesses as a result of measures introduced between July and December 2011.”
