Businesses have long been burdened by red tape, with a minefield of regulations stifling job creation and hindering investment, success and growth.

Indeed, Brook Street’s independent research, in partnership with YouGov, revealed that almost a third of British businesses (29 per cent) are struggling to keep up with changing employment legislation and one in five think that employment legislation is the biggest burden on business. Not surprisingly, only one in ten consider existing employment legislation to be ‘fit for purpose’.

Much of the burden faced by UK businesses is caused by the sheer volume of legislation that exists.

Getting an understanding of this legislation, and ensuring compliance, is a huge drain on resources and time that could be better spent generating profit, growth and new jobs.

The government recently announced plans to either scrap or overhaul approximately 3,000 regulations to help boost business growth. Whilst this spells good news for businesses, it’s vital that employment regulations are at the heart of this review so businesses can have confidence and certainty to grow workforces.

Britain’s recovery and growth is expected to come from job creation and the confidence of businesses to take positive risks by recruiting staff. This was supported by announcements from business secretary Vince Cable, who has presented a range of reforms designed to simplify and speed up the process of terminating an employment relationship when it breaks down.

But despite the government’s attempts at deregulation, Brook Street’s independent research revealed that 40 per cent of respondents agree that employment regulation deters them from taking on new people.

Nevertheless, with new regulations being introduced and redrafted regularly, SMEs need to be aware of, and be prepared for, potential changes and introductions of laws to ensure safe navigation through the legislation landscape to achieve growth.

Key reforms to be aware of currently include:

Pensions reform:

From October 2012, for the first time, employers have to automatically enrol certain workers into a pensions scheme that meets quality criteria and pay a minimum level of contribution. Each employer is allocated a date from when the duties will first apply to them, known as their ‘staging date’, based on the number of people in their PAYE scheme. Employers with the largest numbers of workers in their PAYE schemes will have the earliest staging date. Employers can check their staging date on: www.tpr.gov.uk/staging


Children & Families Bill:

Under recommendations in a new Children and Families Bill scheduled for 2013, the terms maternity and paternity leave will no longer be used and will be replaced instead by the phrase flexible parental leave. The idea is that mothers will automatically get the benefits as at present but will have a new option to share them if that is the couple’s preference.

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EU proposals to measure happiness:

According to draft EU proposals, businesses may have to measure how happy workers are before and after carrying out redundancy exercises. This is at odds with the UK’s current policy goal of reducing the regulatory burdens on businesses.

More on employment legislation:

• George Osborne unveils ‘employee-owners’ legislation to give workers tax-free shares in employer
• Beecroft’s no-fault dismissals damaging says CIPD
• Making pay between assignments work