Press Release

PM’s employment announcement could prove a nightmare for small firms

14 May 2008

The Federation of Small Businesses (FSB) today warned that the Prime Minister’s announcement on the planned extension of the right to request flexible working together with new rules on agency workers could create an employment nightmare for small business owners.

Although over 90 per cent of requests for flexible working have been granted, the planned extension of the rules to parents of older children will dramatically increase the number of qualifying employees. The FSB warned that changes to the rules on agency workers would only add to the problems faced by employers looking to cover fragmented job posts.

The FSB said that the very fact of their size makes it more difficult and more costly for small businesses to cope with new employment laws than it does for big companies. The cost of the current flexible working arrangements to businesses is estimated at over £22 million.

Alan Tyrrell, FSB Employment Chairman, said:

"The announcement today puts small businesses in an impossible position. You can’t have an extension of flexible working and at the same time clamp down on the means by which many small businesses cope with it, which is often through temporary workers.

"The current flexible working regime seems to be working, but the government should be cautious about extending it too far, which could be damaging to small businesses and, as a result, the millions of people they employ."

"Bringing in a whole new set of complicated employment regulations for temporary workers on top of that could make the situation untenable for many small businesses."