By Max Clarke

In a move to facilitate hiring in the private sector, David Cameron has announced a new “Employer’s Charter” which will make it easier for employers to fire unsatisfactory workers during their first two years’ employment, without having to face an employment tribunal.

By simplifying employment regulations it is hoped that the private sector will be able to hire new employees with greater easy, thus further stimulating the 300,000 new jobs already created in the sector.

In response to this decision, Members of the UK200Group of independent accountancy and lawyer firms have commented on its likely effects:
David Whiscombe, partner, BKL Tax:

“Employment law is a start, but only a start. Small businesses are over-regulated in many ways, including health and safety, planning, consumer protection and taxation compliance as well as employment. We have seen an ‘Office of Tax Simplification’ — much more desirable would be an ‘Office of Small Business De-Regulation’.

“Regrettably, the truth is that government’s hands are largely tied in the matter since so much of the regulation strangling small businesses emanates from Brussels, and this is the problem which lies at the heart of any attempt to invigorate the small business economy.”

Jonathan Russell, partner at ReesRussell and vice-president of the UK200Group:

“Many businesses believe the current employment legislation, along with many other pieces of legislation, has reached a point where the balance has been moved too far in favour of the employee. This has led many small employers to hesitate when it comes to employing people particularly to meet short term needs.

“Anything which can help small businesses take a more flexible approach to their employment needs can only help. Short-term cover, in particular for maternity or sickness, are areas where the small employer frequently feels all the rights are with the employee to the detriment of their business.”

James Abbott, tax partner, Baker Watkin:

“In short, this is a very welcome review. I have specific experience of businesses from overseas not investing in the UK because of our employment laws. It has also become very clear that procedure is almost becoming the most important factor in dealing with employment matters, not the outcome.

“Whilst a potential extension to two years before an employee can bring an unfair dismissal claim is welcome, would that mean that employees would be less likely to leave an existing position for a new one? A fluid workforce is as important to employee and employer alike. I also wouldn’t want to see small employers being prejudiced in recruiting the right talent by the employees of those companies perceiving that they have fewer rights. Overall though, I suspect there a very few small, and for that matter larger, employers that wouldn’t welcome a relaxation in the rules.”