Employment law changes ‘will cost business £23 billion’

Employers will face a bill of £23.87 billion because of a raft of employment law changes coming into force over the next four years, the British Chambers of Commerce (BCC) has claimed.

Chris Mordue, partner at Pinsent Masons, outlines the workload HR can expect in order to comply with the Agency Workers Regulations.

According to the BCC, some of the most costly forthcoming regulations for UK businesses are pensions reforms (costing £4.5 billion annually), the agency workers Directive (£1.5 billion), and the right to request time off for training (£174 million).

The BCC is urging the Government to use the upcoming Budget to “act on its promises” and stimulate growth by reducing the regulatory burden faced by private sector companies. It claims that the “constant threat of tinkering with employment law” is detrimental and costly to business.

David Frost, director-general of the BCC, commented: “The Government claims business growth is top of the agenda, yet UK firms will be hit with huge costs once these new regulations come into force.

“Unless the Government reduces this kind of red tape, we will continue to have high levels of unemployment and could end up derailing the recovery.”

Frost added that new regulations around the abolition of the default retirement age, paternity leave and the right to request flexible working will leave employers confused and distract them from growing their businesses.

However, Sarah Veale, head of employment rights at the TUC, argues that the BCC has not taken important factors into account.

“The BCC’s carping about a lack of skilled workers is louder than most so their opposition to new training rights goes against their own call for growth,” she said.

“With two-thirds of private sector workers not in employer-backed pension schemes, the economic cost of failing to help staff save for their retirement dwarfs the dubious figures dreamt up by the BCC.”

XpertHR resources on upcoming employment legislation

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