Businesses ‘overestimate burden’ of employment law

Many businesses overestimate the burden placed on them by employment regulations, according to Government research.

Its survey found that businesses that view regulations as burdensome often did so because of a lack of understanding of employment law. Dismissal processes were seen as particularly stressful and costly, with some employers going beyond the legal requirements because they mistakenly believed such action was necessary.

Employment Relations Minister Jo Swinson said perceptions of employment law did not match the reality of the actual legislation. She said: “What this study shows is that we need to work with employers to help them better understand their rights and responsibilities.

“We are reviewing existing legislation with the aim of providing clarity and certainty for business to give them the confidence to manage their workforce effectively.

“We are addressing business and employee concerns about the dismissal process through encouraging a greater use of settlement agreements.”

The study was called, Employer Perceptions and Impact of Employment Regulation. Some of its main findings included:

• equality legislation, recruiting migrant workers and the Agency Workers Directive were all raised by employers as impacting on recruitment practices;
• employers who maintain formal working practices are more confident about compliance and do not see employment regulation as burdensome. Employers who work informally and only react when a problem comes up are worried about litigation and compliance;
• micro, small and medium sized businesses who had little internal HR expertise saw employment regulation as complex and inaccessible to people who lacked a background in law or HR;
• medium and large businesses were proactive in learning about legislation and keeping up to date with changes. Smaller businesses are more reactive and only sought information if a problem arose and say the media is their main source information about changes to legislation.

Please contact John Carter for more information about the issues raised in this article or any aspect of employment law.