THE North East Chamber of Commerce has called on the Government to increase support for businesses adjusting to changes in employment laws.
The NECC says businesses in the region will collectively face costs of £730m to adapt to incoming laws, at a time when it says the Government should be helping the private sector to pick up the slack from public sector cuts.
NECC head of policy Ross Smith said: “Firms face no fewer than seven major changes to employment law in this year alone and yet the level of support from the Government is virtually non-existent. It has taken radical steps to reduce the public sector debt and in doing so is relying on the private sector to fill the gap this creates.
“Businesses are growing but the Government will need to do more to support companies.”
The British Chambers of Commerce has said UK plc will face a £23bn bill for legislation which will come into force between April this year and April 2015.
It says the introduction of the right to request time off to train will have an annual recurring cost to business of £174.96m, while the Agency Workers Directive will cost £1,548m a year and the 2012 pensions reform will cost £4,526m annually.
There were concerns from companies, including Newcastle-based recruitment firm Solutions Recruitment.
Founder Margaret Clare said: “I think it’s much harder for little businesses to set up now and take on new employees with all the legislation, and it costs so much. There’s just nothing coming from Government to say it will help out.
“The amount of time that is spent on legislation now is costly for small businesses. They just can’t spend all their time writing and re-writing rules and procedure.”
The NECC wants the Government to remove “unnecessary legislative burdens” to make the changes cost neutral at worst. It is urging it to speed up the planned reform of the tribunal system, and wants politicians to take more time getting changes right rather than constantly “tinkering with policy”.
Small businesses are likely to suffer badly from the rise in costs and red tape but Michael Mitten, managing director of Newcastle-based manufacturer Houghton International, was impressed by some of the new legislation. He said the company uses outside legal advice to keep abreast of requirements, and is currently recruiting an HR manager to take legal compliance issues out of the hands of “strained” management.
He said: “From my point of view, if you follow employment law correctly, a lot of it is good practice.
“However, especially with growing businesses, companies will at some point need to get rid of people, and the law is often less about whether you’re doing that in an efficient and sensible way, and more about whether you’ve ticked every single box.
“It should be about simplifying the legislation so that it is well-thought out and tested, and only changing it something like every two years so people can understand it and apply it.”
