Sarah Green column

Employment laws alone have cost businesses £37bn in the past nine years.

Employment laws alone have cost businesses £37bn in the past nine years.

The figures were published yesterday on the first working day that major new employment laws come into force, including far-reaching rules on age discrimination and extensions to maternity leave and pay.

The cumulative impact of 35 new employment rights in the past nine years, and the administrative burdens they have created, is revealed in the CBI publication Lightening the load: The need for employment law simplification.

Three-quarters of employers told the CBI that time spent administering and complying with new rights was damaging their business.

Half say labour costs have increased, two-fifths think workplace regulations have harmed the UK's reputation as a place to do business and a third say they have harmed their ability to compete. In our report, the CBI argues no further rights should now be introduced until after the next election and is calling on the Government to restrict itself to one employment bill per parliament.

It should also review the impact and effectiveness of new regulations no more than two years after implementation.

In addition, the report makes recommendations to the Government on a range of employment regulations.

These include stopping gold plating European directives.

The Working Time Directive can, for example, be distilled to the principle that no-one should be forced to work more than 48 hours per week, but employees are free to choose to work longer if they wish.

Furthermore, the cost of administering State benefits on the Government's behalf is significant.

The Government must take back the administration of statutory maternity and statutory sick pay where employers wish it to do so.

Small and medium-sized enterprises (SMEs) often cannot afford HR staff and the CBI recommends that the Government should establish a low-cost, shared HR resource delivering common sense, comprehensive advice on the full range of employment issues.

The tribunals system also comes under fire in the report, with more than half of employers saying the system is too adversarial and more than a quarter citing cost as their main concern.

In one in four cases brought, companies felt they had to settle out of court despite being advised they would win.

The CBI believes more costs awards should be made against unsuccessful claimants to discourage weak and vexatious cases.

We now have an appropriate and balanced framework of employment rights.

What the Government must now do is simplify these regulations where they are complex, return to the key principles of the rights and remove the clutter.

Sarah Green is regional director of CBI North East


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