BRITAIN’s small businesses are preparing to make their voices heard this week as they call on the government to cut the employment red tape that is strangling their firms.
Peter Done, a Sunday Times Business Doctor and the managing director of Peninsula, the employment-law adviser, will deliver a letter to Tony Blair on behalf of thousands of small businesses to highlight the concerns raised by his Cut Red Tape campaign.
In the letter, which marks the culmination of the year-long campaign, Done warns that the government “is not listening to the concerns of small businesses”.
He writes: “Since your government came to power in May 1997 it has enacted over 180 separate pieces of legislation that are employment-based and affect all employers across the country. As some 82% of employers employ 10 members of staff or fewer, they are effectively ‘one-man bands’. There is no way that these employers can keep up to date with that amount of legislation – let alone implement and comply with it.”
More than 12,400 small-business owners have thrown their weight behind the campaign to cut employment red tape, a campaign that has been supported by The Sunday Times since it was launched last year.
In the letter, Done calls on the government to review the employment laws and consider fully the views of small and medium-sized businesses when drawing up new ones in order to get a clear picture of how they are going to affect them.
He writes: “Small employers are becoming increasingly concerned about the lack of communication and contact they have with the government concerning new laws. The government needs to communicate and pub-licise details of: the new legislation; the obligations the laws will place on the employer; and a timetable of when the laws come into effect and any future clauses.”
In a survey of those supporting the campaign, Peninsula found 98% believed that the recent increase in employment red tape was damaging their businesses while 99% thought the time spent on red tape could be better spent running their businesses.
Rick Smith, managing director of Willows Sports Centre in Derby, is a strong supporter of the Cut Red Tape campaign. He said: “Employment legislation has gone too far. Common sense has just gone out of the window. Now, instead of being decisive and using common sense, employers are having to look over their shoulders all the time to make sure they have followed the right procedure. The balance is not correct between the employer and the employee.”
He said that dealing with the paperwork on employment legislation had become so time-consuming that he sometimes had to take key staff away from the jobs they were supposed to be doing. The business was not large enough to support a dedicated human-resources person. “It is creating lots of office work, which we always tried to keep to a minimum because our business is very much customer-based. Over time several of us have had to change our working practices.”
Done said that the new legislation being introduced, which includes an expansion of maternity and paternity rights and making use of employment tribunals to settle disputes between employers and employees, was placing a considerable burden on small-business owners.
In a survey of 1,568 small employers, Peninsula found that small businesses spent an average of 9.5 hours a week dealing with employment law and HR matters. It also found that five in ten firms kept their businesses intentionally small so they would not have to comply with extra employment laws.
He said: “There has been a constant development of frustration, panic and fear among employers all over Britain. Employers are frustrated at the lack of sympathy the government has for the operation of business. They are panicked by the potential of having to face employment tribunals for the first time and are fearful that their business could go under as a consequence of compensation claims.”
He added that small businesses are now spending large amounts of time monitoring the new changes in employment law. This bureaucracy is taking time, effort and money away from the day-to-day running of a business and in turn means businesses may fail to achieve success because they cannot devote enough time to planning their future.
Peninsula’s campaign has clearly hit a nerve. One small-business owner, Nick Bailey, the managing director of a manufacturing firm, said: “The time taken to read through and understand the mass of information could be better spent with customers or suppliers. I have to do it myself and it is a constant increase to the overhead.”
Chris Marshall, managing director of a textile firm based in northeast England, said: “We have huge costs to pay to employ staff correctly and to stay up to date with legislation.”
Another, Warren Silversmith, manager of an accountancy firm based in London, said: “Lack of flexibility makes it difficult to respond to market forces, especially for small businesses that are competing against large rivals with dedicated HR departments.”
