The CBI today called on the Government to “think small first” and tackle regulation that prevents private and family-owned businesses from creating jobs and growing their businesses.
The CBI has called for small businesses to be allowed to do an annual review on flexible working and to be freed up to agree return dates from maternity leave in advance.
It says it wants the Government to tackle regulation that "prevents private and family-owned businesses from creating jobs and growing their businesses".
In a new report, Think Small First, the CBI says small and medium-sized firms (SMEs) can pick up the employment slack from the public sector. Research shows that they create two-thirds of all new jobs and are well represented in regions where the public sector predominates.
But, it says, 60% of private and family-owned firms cite employment regulation as a barrier to job creation.
Its proposals for helping SMEs include: speeding up the tribunals system; providing clear guidance in the absence of a default retirement age; introducing the right to an annual review of flexible working and to agree a return date with an employee going on maternity leave.
John Cridland, CBI Director-General, said:“Smaller firms are job-creation dynamos. The Government must think small first by tackling regulation which distracts them from growing the business and creating jobs.
“Much employment law fails to recognise that private and family-run firms don’t have dedicated human resource teams and tend to manage staff in an informal way.
“The size and nature of these firms makes them strong advocates of flexible and family-friendly working, and the Government should build on this success. An annual review on flexible working would ensure that competing requests could be managed fairly, while agreeing a return date with employees going on maternity leave in advance would help firms plan for the future.
“If the Government gets the law right for small firms, it gets it right for all firms. Thinking small first would better harness the potential of SMEs, rather than simply exempting some of the smallest from aspects of the law that undermine growth.”
The CBI proposes:
– Extending the unfair dismissal qualifying period to two years. This would reflect the limited HR capacity of SMEs and give them more confidence to hire
– Requiring tribunals to make practical use of current legal defences based on the size of firms
– Reforming the ACAS code to give greater support to smaller firms
– Introducing a package of measures to allow firms to manage retirement with confidence in the absence of a default retirement age
– Improving the speed of resolution of employment tribunal claims. This should include, it says, requiring pre-hearing reviews with the power to strike out weak claims, a refundable fee per claim to discourage opportunistic multiple claims and greater efforts to encourage settlement between employee and employer
– Giving firms the right to have an annual review of flexible working arrangements, and to redistribute flexible working as employee needs change. For instance, asking parents of older children to increase their hours to allow a returning mother some access to a limited pool of flexible hours
– Allowing smaller firms to ask someone going on maternity leave to specify when they plan to return, with the expectation that this date will be kept to unless employer and employee both agree to change it.
– Issuing better guidance on managing competing flexible working claims.