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Don’t expect too much from red tape-cutting bill, say SME experts

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While the government may be trumpeting it as a solution to firms’ complaints about employment law red tape, the Employment Simplification Bill may not bring about the kind of changes that are hoped for, small business experts have warned.

The Forum of Private Business (FPB) said the bill, published last week, should not be viewed as a reduction in the regulatory burden that companies take on when employing staff.

Under the proposed regulations, rules introduced in 2004 on statutory employment dispute procedures are to be repealed, European Court of Human Rights judgments are to be incorporated into UK law and a more “straightforward and transparent” enforcement and penalties regime for the national minimum wage is to be introduced.

But Phil McCabe, FPB spokesman, complained that while small businesses are not opposed to the introduction of the measures, the Bill is narrower in scope than it might have been.

“A wide-ranging review of the burdens of employment law took place last year, launched by Alistair Darling when he was Secretary of State at the then Department of Trade and Industry,” he said. “The FPB submitted some detailed data on health and safety, parental leave and sick pay concerns, none of which seems to have made it into this Bill.

“Dispute resolution and the minimum wage penalties have each come from other reviews, which leaves us wondering where Darling’s review actually got us.”

McCabe added that the reforms of dispute resolution are welcome given the many complaints about the regulations but called on ministers to work towards a “radical overhaul”.

“The replacement dispute resolution procedure is yet to be defined,” he said. “We are working on a detailed proposal ourselves and the government needs to be prepared to think radically in order to progress.”

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Annie Hayes

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