The coalition Government has invited businesses to voice their concerns about existing employment law in the latest phase of efforts to slash red tape, which it claims is stifling private sector job creation.
For the next three weeks, the Red Tape Challenge, Whitehall’s crowdsourcing project, will focus on the rules governing employee rights. The campaign asks for a variety of suggestions about how regulations can be improved, simplified or even abolished. Ministers want employers to comment on areas ranging from redundancies and employment agencies to immigration checks.
Edward Davey, employment relations minister, said: “We often hear from businesses that employment related regulation holds them back from growing their firms and employing more people. Whether it is the filling out of endless forms when you hire your first member of staff, the complexities of letting somebody go, or simply manage staff on a day-to-day basis, we want to review these regulations with the aim of giving business more confidence in employing people and creating more jobs.”
The government was determined to tackle “unnecessary, burdensome red tape that harms job creation” and meant employers spent less time running their businesses. The move would not result in a watering down of employee rights, however, Davey attested.
The latest phase of the Challenge follows new research from the British Chambers of Commerce, which revealed that 60% of the 2,000 small businesses it surveyed wanted to take on more staff but regulations covering areas such as dismissal and health and safety inhibited them from doing so.
The threat of employment tribunals was also a stumbling block, the poll found. Almost 21% of respondents said they had faced a claim during the last three years.
Tribunals was an area covered by Chancellor George Osborne during the Conservative Party conference earlier this week when he announced that the period an employee must work for a company before they can make a claim for unfair dismissal is to double from one to two years. He claimed that the move could save employers £6m a year.
The changes will come into force on 1 April 2012 and, when combined with other measures including speeding the tribunal process itself up, ministers believe they will lead to unfair dismissal claims dropping by about 2,000 a year.
Business Secretary Vince Cable said: “Businesses tell us that unfair dismissal rules are a major barrier to taking on more people. So today we have announced that only after working for the same employer for two years can an employee bring an unfair dismissal claim.”
