Employment regulations 'jeopardising' job creation

16 March 2010

Complex employment rules are posing a threat to the competitiveness of UK business and the ability of firms to create jobs, a new report has claimed.

The study, carried out by the British Chambers of Commerce (BCC), said that employment law is biased too strongly in favour of employees, and that basic workplace protections have been supplemented with burdensome rights to request, extended time-off provisions, and unreasonable health and safety restrictions.

Entitled 'Employment Regulation: Up to the Job?', the report highlighted several areas where, the business group argued, the rules are unfairly weighted towards the employee.

It said that the average waiting-time for a first hearing at an employment tribunal is 20 weeks. That employers find it very difficult to prove gross misconduct has taken place. And that employers are burdened with the same responsibilities for ensuring the health and safety of home workers as they do for staff based at their own premises.

On the other hand, employees, the report continued, are allowed to make claims against their employer without taking any advice on the merits of their claim.

Based on the findings of the study, the BCC put forward a series of proposals to cut and rebalance the burden of employment red tape.

The recommendations included making sure that employers do not have to wait more than 16 weeks for a first tribunal hearing.

The law should be changed to allow employee dismissal if an employer 'reasonably believes' that a member of staff's actions constituted gross misconduct.

Employers should only have responsibility for equipment they have provided to a remote worker; otherwise remote workers should be responsible for health and safety in their own home.

And employees making claims must receive advice from either a solicitor or Acas before submitting a formal claim or complaint.

David Frost, the BCC's director general, said: "There is an emerging consensus that employment law is now weighted too far in favour of the employee. 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 BCC wants to see a three-year moratorium on new employment law in order to encourage job creation, as well as the dropping of plans for a 1 per cent increase in employers' National Insurance contributions.