Reforms to reduce red tape for business

31st March 2011 A number of measures have been announced by the Government with the aim of reducing the burden of red tape on businesses in relation to employment law. The Government believes that the reforms will encourage growth in business by removing barriers caused by excessive regulation.

Among the reforms is the introduction of a moratorium exempting business that employ fewer than 10 employees, and new businesses, from any new domestic regulations in the coming three years. In addition the Government is to carry out a public audit of nearly 22,000 existing statutory instruments (ie regulations), as well as introduce "sunset clauses" into new regulations. This means that new regulations will be subject to a review every five years to see if they are still necessary and effective, and to see if the costs of them to business can be reduced. Only then would they be re-newed, but once more for a further limited period (five years).

The Government has also announced that it not going to extend the right to request time off work for training to small and medium size employers (with fewer than 250 employees). The right to request time off for training will remain in effect for those businesses that employ 250 or more people. This reverses the extension of the right to request time off for training to small businesses which was due to come into effect in April this year.

The proposed extension of the right to request flexible working arrangements to parents of 17 year olds is also being dropped.This means that this right will remain available for parents of children under the age of 17 years, of disabled children under 18 years old, and carers of certain adults. The decision not to extend this right is a move away from the Government's own plans set out last year.

Obviously any measures that free small businesses from the burden of regulation will be broadly welcomed by businesses facing challenging economic circumstances. It should however by noted that the powers of the Government to deal with regulation emanating from the European Union is much more limited, but the Government has indicated that it will only bring such measures into UK law with the minimum requirements to ensure compliance. So in reality the review of many regulations, as proposed, may have a limited impact in light of European law requirements. However, this development does indicate that the Government is unlikely to embark on any significant introduction of new employment legislation, which will mark a change from the previous 12 years.

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