Analysis: We ask both sides of industry: Is the government right to change the rules?

Published on Monday 10 January 2011 17:43

IT IS good news that the UK government is beginning to take steps to address the burdens of regulation on business, particularly in the sphere of employment legislation, which has long been a source of consternation of Scottish businesses.

Nevertheless, it is important to put the latest developments in context. Amongst other areas, the government will be consulting on proposals to extend to two years the length of time an employee must work for a business before he or she can raise a claim for unfair dismissal.

Opponents have said this is simply a way to make it easier to sack workers, but this is really ignoring the realities of business. Most responsible employers find terminating a staff member's employment one of the most difficult things they ever have to do. For most small and medium-sized businesses, employers will know their employee well, and perhaps know their family. Sacking a worker is rarely something an employer will do lightly, irrespective of what legislation exists to protect their rights.

A better way to look at this latest proposal is to examine the effects at the other end of employment - the beginning, rather than the end. It is here that many businesses find the potential burden of employment legislation at its most discouraging.

Why risk taking on a new member of staff if this could ultimately lead to a costly and time-consuming journey through a minefield of regulation and legislation? Cutting through the burdens and reducing the risks of employment would be much-needed incentives for businesses on tight margins to take on a new member of staff.

At a time when the private sector must grow and provide the new jobs that the Scottish economy badly needs, any proposals to reduce the fear of hiring must be considered positively.

• Liz Cameron is chief executive of the Scottish Chambers of Commerce.