By Max Clarke
New employment laws due to be implemented over the next four years will cost UK businesses a staggering £22.87bn, the British Chambers of Commerce (BCC) can reveal.
Despite a pledge from the Government to tackle the burden of red tape, which is stifling job creation and growth in the UK, the BCC’s Employment Timeline, published today (Tuesday), shows a raft of new employment legislation which is set to come into force between April 2011 and April 2015.
With seven major changes planned for 2011 alone, the BCC is urging the Government to match its rhetoric with reality — by starting the deregulation process and scrapping costly employment laws which are a burden on business, particularly smaller firms.
The constant threat of tinkering to employment law is detrimental to business and has to stop. For example, the Government is proposing three changes to parental leave in the next four years. Every change, however small, will come at a price to business. The Government must get it right first time to avoid confusion and unnecessary costs.
The BCC welcomes the promised reform of the employment tribunal system in the UK, which is currently too slow and weighted in favour of the employee. But, there is no timescale for its implementation and the potential cost savings to business are dwarfed by the cost of new employment burdens.
Some of the most costly regulations in the pipeline are:
2011: Right to Request Time off to Train will have an annual recurring cost to business of £174.96m
2011: Agency Workers Directive will have an annual recurring cost to business of £1,548m
2012: Pensions Reform will have an annual recurring cost to business of £4,526m
Commenting on the research, David Frost, Director General of the BCC said:
“The Government claims business growth is top of the agenda, yet UK firms will be hit with huge costs once these new regulations come into force. Companies cannot generate growth and create jobs when they are facing a £23bn bill, just to implement new employment legislation. Unless the Government reduces this kind of red tape, we will continue to have high levels of unemployment and could end up derailing the recovery.
“These new regulations, such as changes to the right to request flexible working, paternity leave, and the abolition of the default retirement age, will leave employers confused, and distract them from growing their business. The Government must use the upcoming Budget to act on its promises and deliver concrete reductions to the regulatory burden faced by the private sector, so that it can deliver a Year for Growth in 2011."