New rules, new headaches? Employment law changes get mixed reception

Businesses aren't entirely happy with the new laws that kick in this week - particularly on paternity leave and the retirement age.

by James Taylor
Last Updated: 19 Aug 2013
The first week of April is never business owners' favourite time of the year, since it tends to signal the introduction of yet more new employment laws. And this year there are couple of biggies: the new paternity rights that will allow fathers to take up to six months of their partner's maternity leave, as of today, and the abolition of the Default Retirement Age, on Wednesday. But one man's great legal step forward is another man's extra red tape - and it's clear that a sizeable number of (particularly small) businesses are opposed to both measures…

According to a new survey of 1,300 companies by the British Chambers of Commerce, over half think the new paternity rules will be detrimental to their business. The theory is that the new law will allow men and women to share the burden of childcare more easily; if women want to go back to work early, they can do so in the knowledge that their partner can take the leave instead. Now clearly there's a lot to be said for this. But it will undoubtedly be a major burden for small firms in particular; although they shouldn't suffer financially (since the Government fits the bill), they still have the hassle of arranging the whole thing and recruiting cover. And now the risk of that happening is twice as great.

The abolition of the DRA - which means that employers will no longer be able to force staff out once they hit 65 (after a brief transitional period) - has also had a mixed reception. Again, this is arguably a good thing, insofar as it will stop companies using legislation as a substitute for good performance management. But the CBI has been quick to point out that in practice, it's not clear whether employers will be able to retire staff if their performance deteriorates due to age. A fifth of respondents to the BCC survey felt the new rules would be detrimental.

You may also recall that in the Budget, the Chancellor said that new businesses, and those with fewer than ten staff, would be exempt from new employment legislation - a move that was widely praised. However, there may be a catch: according to the BCC, this won't apply to either of the two rule changes above. Now it does seem a bit pointless having an exemption if it doesn't apply to the most onerous legislation. And on the wider point - we suspect that this week at least, not many employers will feel that the Government is delivering on its promises to cut red tape yet.

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