Employment law changes ‘could cost businesses billions’

Posted 18/02/2011

Changes to UK employment law could end up costing British businesses millions of pounds, a new report has revealed.

The study, undertaken by the British Chamber of Commerce (BCC), revealed companies will face the prospect of some £23 billion worth of extra red tape thanks to a new raft of changes to employment legislation.

With pensions reforms set to cost £4.5 billion annually and the Agency Workers Directive a further £1.5 billion each year, the BCC has urged the coalition government to help stimulate economic growth by reducing the regulatory burdens of companies in the private sector.

David Frost, director-general of the BCC, said: “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.”

According to the Pensions Advisory Service, one example of a change to UK employment law is new auto-enrolment pension plans, due to come into force in October 2012, which will require business leaders to automatically enter their employees into a qualifying workplace pension arrangement.