Employment Law Reform: Is the Government changing its tune on the Red Tape debate?

15 March 2012

At long last the Government seems to have recognised the folly of continuing to major on the approach that it is “red tape” which is preventing employers from deciding to take on more employees. The problem with this approach is that the more the Government repeat this mantra, the more employers will come to believe it, and will start to question whether they are indeed at heightened risk if they do decide to expand their workforce. It becomes a self-fulfilling prophecy.

In actual fact, we are by no means the most regulated of the developed nations – a point that has been made by the OECD as long ago as 2008.

It is also not that easy to come up with many employment laws, that can simply be dispensed with, without either acting in breach of our European obligations or starting to encroach on basic rights most now accept should be available to employees in the 21st century.

At long last, the Government seems to have recognised the error, and discretely changed its emphasis. This is evident in the raft of papers that have been released this morning (the inaugural “Employment Law Review Annual Update”, a new “Employment Charter” and a call for evidence on dismissals including the ACAS Code and the concept of compensated no fault dismissals for micro-business).

The Government’s first Employment Law Review Annual Update, summarises where they have got to in terms of employment law reform since they took office. Interestingly, publication took place the very morning that John Cridland, the CBI Director General, was writing in the Times. He bemoaned what he saw as the lack of progress in terms of deregulating the employment sector, ending with a clear communication to Government “My message to the Chancellor and the Business Secretary is clear:  just get on with it.  Don’t hold us back”.

I am sure it is entirely coincidental, but isn’t it interesting that the Government’s response has been to make various announcements the very same day! And they contain their own message to the employer organisations. The Government will do what it can to listen, and to react, but they now say on many occasions throughout the documents they have just released, that there is a “perception” of heavy regulation. In parenthesis they seem to be adding that “perception” may be, to some extent, illusory.

The truth is that well managed businesses have a lot less to fear from employment legislation than they think (or the Government has hitherto been indicating). Much, but admittedly not all, of the so called “Red Tape”, can be adequately negotiated by well run businesses who are set to expand as the economy improves.

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