Too much too soon for UK’s small businesses

One of the central elements of the forthcoming general election campaign will be the debate around family friendly policies. While the government has vigorously pursued promoting this agenda, employers have been less than enthusiastic. Owners of small firms, in particular, have expressed deep concerns about the consequences of extended legislation on their businesses.

The rate of change to the law in this area has been immense. In 2002, the government introduced 18 weeks’ paid maternity leave, further unpaid maternity leave, paternity leave and a right to request flexible working for parents with children up to six years old. The following year, paid maternity leave was extended to 28 weeks. It is now proposed to extend it to nine months and, eventually, 12 months, and to allow maternity and paternity leave to be shared between parents. New proposals include extending the right to request flexible working to carers and parents with children up to the age of 17.

Our members, who employ more than five million people, understand the need for flexibility. However, the fear is these latest changes are too much, too soon. Employers are concerned their ability to manage staff working patterns in a way that meets the needs of their business will be undermined.

We should remember that the UK is competing in an ever more globalised market against businesses in countries with significantly lower costs. Also, don’t forget that 99% of businesses in this country employ less than 50 people. They sustain the economy.

The British Chambers of Commerce’s (BCC) employment study at the end of 2004 surveyed 1,200 employers and found that two thirds of the sample opposed extending flexible working. Eighty per cent were against increasing maternity leave to 12 months. The smaller the business, the stronger the opposition to the proposals, currently in a consultation period.

The BCC wants to see:

– The notice period increased to three months for those who do not intend to return to work after maternity leave. The Inland Revenue should take on the administration of Statutory Maternity Pay

– Mothers only allowed to transfer maternity leave to fathers after six months of their leave

– The right to request flexible working to be extended only to parents with children under nine years old.

A great strength of the UK economy is the flexibility of its labour market. Maternity and flexible working rights are important in the workplace, but they must be balanced against employers’ needs to retain effective management of their businesses.

By David Frost, director general, British Chambers of Commerce

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