The Federation of Small Businesses (FSB) has urged government to be bolder in its changes to existing employment law to incentivise employment, as new figures show small businesses will look to shed staff in the first three months of 2012.
The FSB’s warning came ahead of statistics published by the Office of National Statistics last week showing UK unemployment rose by 118,000 in the three months to November to 2.685m and a rise in the unemployment rate to 8.4% from 8.3%, the highest since January 1996.
Figures from the FSB ‘Voice of Small Business’ Index show that a net balance of 6.5% small firms plan to lay off workers in the first three months of 2012 – the highest level since the survey began.
The ‘Voice of Small Business’ Index also shows that a balance of 4.8% of small businesses reduced their headcount in the three months from October to December – slightly less than businesses had expected.
The FSB is urging the government to ‘think small first’ when it responds to the Modern Workplaces consultation and is calling for:
- Micro firms to be made exempt from the extension of the right to request flexible working for all;
- A complete and simplified reform of maternity and paternity leave in the future – doing so in an uncertain economic environment could harm businesses; and
- A micro business exemption from proposals on pay audits which will require employers who lose an Employment Tribunal case to carry out a potentially costly, time consuming and complex pay audit.
“The beginning of 2012 is beginning to look bleak with confidence incredibly low and businesses looking to shed staff,” said FSB national chairman, John Walker.
“Tinkering and increasing existing employment laws will only serve to worsen this situation. But by putting simple measures in place, such as excluding micro firms from the right to request flexible working for all, will help free businesses from the shackle of red tape so they can grow, innovate and take on new staff.”
