Press Release

Small businesses left all alone to cope with employment laws

22 October 2007

Nearly 80 percent of small businesses owners, who generate half of UK GDP, have to deal with increasing levels of employment law by themselves, a new Federation of Small Businesses (FSB) report shows.

The survey of 2,826 small firms showed that small business owners and entrepreneurs are facing an ever-increasing burden of employment law unaided – 78% deal with employment paperwork themselves and a third do not know where to get Government advice on legislation that affects small businesses. This does not mean less protection for employees – in fact simpler laws would increase the understanding of the laws by small firms and their ability to implement them.

In addition, nearly a third of small business owners (32%) said that they didn’t take on new staff because of the complexity of employment law.

Alan Tyrrell, FSB Employment Chairman, said:

“The FSB has always supported its members when it comes to employment law with advice, information and an ever-popular legal helpline. But the fact of the matter is that it’s the Government that is producing so much employment legislation and it’s the Government that should be taking responsibility for ensuring that laws are realistic, practical and understandable.

“The relentless, one-size-fits-all approach to employment law has got to stop. All the evidence shows that small businesses can create more wealth and more jobs when employment laws are simple and flexible.

“Small businesses do so much for the UK economy and local communities. The fact that so many of them are deciding not to employ people demonstrates that the burden of employment law is unacceptable. For evidence of this, look no further than the rocketing numbers of employment tribunal claims in the last few years.”