Initially, it did not show the employer-friendly credentials that much of the business community anticipated. The Agency Workers Regulations 2010 (coming into force in October 2011) were not amended (despite a review), the default retirement age is to be abolished and the right for fathers to take extended paternity leave is going ahead (though not if they work in a small business). In fairness, the Government is constrained by the need to comply with European directives and case law (which has made all these measures somewhat inevitable).
But Cameron et al are clearly keen to show they are doing what they can to help industry.
At the beginning of the year, they announced a period of consultation regarding wide-ranging reforms to the employment tribunal system, designed to encourage growth, particularly in small businesses. These proposals included more opportunity for 'nuisance' claims to be struck out early and for employers to recover costs, proposals to shorten employment tribunal hearings and, most notable of all, a proposal to increase the length of employment needed to claim unfair dismissal from one year to two years.
The last proposal, being the most controversial of all, has received commendation and condemnation in equal measures from the usual quarters. Consultation is still underway and anyone interested can, and in my view should, complete a response form.
In the past week, business secretary Vince Cable has turned his attention to the bureaucracy that accompanies running any business, which clearly has a disproportionate impact on those trying to keep small enterprises going in these difficult times, let alone trying to grow.
The full details will emerge tomorrow and over the coming months, but what we do know, courtesy of a speech made last Friday by BIS minister Mark Prisk, is that there is a lot of 'fighting talk': the review of employment tribunals was re-emphasised; firms employing fewer than 250 employees continue to be exempt from the Right to Request Time to Train; a 'One in, one out' policy on new regulations; no goldplating of European rules, so the domestic legislation merely replicates what Europe directs (and nothing more); sunset clauses on all regulations to ensure they are reviewed regularly to ensure their rationale is still valid; a three-year exemption for new regulation for businesses with less than 10 employees on nearly all new regulation.
Perhaps most controversial of all is the suggestion that small business may become exempt from maternity and paternity rights. This will certainly help small businesses that are more affected by a lack of continuity of staff, but there is no doubt that it comes at a cost. Family-friendly organisations and trade unions alike state that this is a step backwards (although a potentially fruitful recruitment hook for the latter).
A balancing act is what is wanted and needless red tape must be cut. However, the parts that hit family-friendly policy must be cost-benefit analysed (particularly as, ironically, recession has shown the business advantages of flexible working). The business community will, no doubt, see this as a helping hand - but to what extent will it actually prompt growth? To what extent do these issues genuinely stop small employers growing? And if they do, then will employers of eight or nine staff put recruitment on hold (perhaps preferring agency workers, consultants and the like) - or simply not recruit at all? Will small businesses employing 12 employees seek to dismiss two of them, to benefit from the small business exemption?
Measures to stimulate growth in small businesses up and down the country are critical in getting the economy back on its feet and will, I hope, be in the chancellor's red box tomorrow. One-third of the private sector working population is employed in businesses with less than ten staff. Every little helps, but these proposals have to be only one piece of the jigsaw if the Government really wants to see the economy grow: banks need to start lending properly - financing sensible business proposals at sensible rates; the price of petrol needs to be looked at (most business costs are affected by it); and the VAT increases hardly came at a good time (smaller retailers being far more likely to have to pass the cost directly on to their customers).
Over to you, Mr Osborne…
Justin Govier is a partner in the employment department at IBB Solicitors.
