Small businesses will have difficulty playing a full role in the economic recovery, because employment legislation inhibits job creation in the private sector. Government economic policy is dependent upon job creation in the private sector to take up the slack created by public spending cuts. If the small business cannot contribute, where will these private sector jobs come from? Current law is counter-productive for the government, the employer and the employee.

It seems that at last there is some momentum gathering pace on the subject of employment law, and not before time. Employment law appears to be written with big companies in mind, with little thought for how a small business would ( or would not ) be able to deal with it.

There are many reasons for employees to be afforded employment protection – from totally unfair and unscrupulous employers with no concerns for their staff.

But if you don’t have a job it’s all a bit academic really!  And the expansion of such law over the last 10 years has had a strong negative effect on employment in small businesses. Many small business owners will perceive there to be too many risks, as the law seems to be far too heavily weighted in favour of the employee.

Furthermore, anyone involved in running a small business now has to have a vast range of general commercial knowledge  – over and above the knowledge required to do whatever it is they do to generate income.

Tax and accounts, running office premises, including repairs and maintenance, health and safety, business development, budgeting and employees. 20 years ago the last item was just about manageable as – apart from the occasional legislative update, nothing changed too much.

Without getting involved about what should have and what shouldn’t have been made law, over the last 10 years, we have been bombarded with so many changes that unless one has a fully funded HR department or an HR person, the chances of the employer being totally up to date with it all are about zero. It just isn’t possible for a small business to keep up to date,  or take time out to sit and learn it all – especially as many owner managers have been working quite extraordinarily long hours during the recession.

Where does this leave the employer?  In a total pickle, and very nervous. You hear plenty of stories about employees who have stopped doing their job properly, losing their job, only for the employer to lose an industrial tribunal, because they failed to write the correct thing at the correct time to the employee in question!  This type of story really worries the small business owner. Do they want to risk being the wrong side of the law ? Of course not!

What has been the effect? Many small outfits have decided not to take on extra staff because the risks are too high, despite the fact they are snowed under with work. Often they fear that if the new person doesn’t work out, they will end up wasting even more time to deal with the resulting tribunal.

The Coalition Government says that private enterprise needs to create more jobs, taking up the slack caused by public sector cuts. Small businesses must and should play a big part in this. No doubt, new jobs will be created, but probably only a fraction of the number of jobs that could be created, should small business be released from these onerous laws.

Of course, there are good and bad people in all walks of life. However it should not be presumed that the business owner is de facto exploiting or mistreating his staff. The successful business employer will look after his employees, in order to get the best out of them, and also make sure of retaining them. Otherwise what is the point ?

Until this subject is addressed, with equilibrium established in the relevant laws, small private sector employment will continue to be stunted – counter-productive for the government, the employer, and the potential employee.

About Michael Fraser

Michael Fraser

Michael - founding partner of Find a London Office - started in the London property market in 1970. Michael has developed extensive knowledge of the locations, the owners, the rental values, and - most importantly - has developed very solid contacts with the other agents working in the hub of the conventional office market, giving him a considerable advantage both sourcing office space, and negotiating the best possible terms for the tenant.

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