New legislation comes into force

While obviously any initiative that improves employer/employee relationships is to be encouraged, businesses may be placed in a difficult situation in trying to update their procedures to ensure compliance with the new legislation dismissals.

The different clauses covering age, disability, minimum wages, migrants and the rest will always make compliance to employment law a tricky proposition but, particularly now, the rise in redundancies will expose significant risk for small businesses. The savings that a business can make from seemingly honest redundancies can quickly be negated by the ensuing legal fees that come from a litigation claim from a former employee.

Any employer who anticipates making redundancies would be wise to consider that employees made redundant in the face of credit-crunch hardship may be more likely to file for a claim. This latest initiative demonstrates once again that policy makers are out of step with the actual needs of business.

From our experience at Coverzones, it seems clear that there are still a significant proportion of small business owners who do not understand that they are legally required to have employers liability cover and, on top of the fact that they already risk fines of £2,500 a day for failing to provide this cover, this new legislation means that if they find themselves caught out they stand to lose even more. Recent research from the IOD showed that when a new piece of legislation is enacted, the vast proportion of SME owners are unaware that anything has changed – how many businesses will be wrong footed by today’s changes?

By altering HR procedures at a time when budgets are stretched to breaking point, costly claims and time-consuming bureaucracy could be the difference between surviving and failing. It would be more beneficial for businesses if policy-makers’ energy was spent looking into business taxes, national insurance and PAYE holidays as opposed to creating new compliance issues.

Quite frankly, the government’s recent claims that it has lowered the burden of red tape on small businesses are based on statistical nonsense. Its stated ambition was to lower the cost of existing red tape from £14billion and it claims to have reduced that figure by £800million – can you name a single business that has noticed? For each process that’s been taken away, the government’s managed to match it with the introduction of additional bureaucracy. Today’s changes are a prime example: the material volume of legislation has not changed, just shifted. The net impact is nil.

Simon Ball (www.coverzones.com)

Having been recently made redundant I think that the odds should be stacked in favour of the employee.

In my experience, employers are all to ready to urge affected employees to see things from a business perspective. Business owners, especially entrepreneurial types, are largely confident, success-minded individuals who might adapt well and even thrive on drastic change but that does not necessarily apply to employees. Redundancy can lead to loss of self-esteem, depression and family problems.

I think redundancy should be seen as a last resort and all necessary procedures should be treated with respect as a mark of commitment to the employee.