UK firms ‘struggling with employment law burden’

Posted 23/05/2011

A complex system of red tape is hindering UK firms as many fail to understand the complexities of employment law and other business legislation, it has been claimed.

According to research conducted by the Clydesdale and Yorkshire Banks, 15 per cent of small enterprises have difficulties understanding the rules they are required to follow, which has led to 100,000 companies facing fines for inadvertent breaches of regulations.

Director for small business banking at Clydesdale and Yorkshire Banks Gary Lumby said the excessive amounts of bureaucracy could make a real difference to a firm’s ability to succeed.

“In extreme cases, not understanding red tape could lead to them closing,” he said, adding: “It is worrying that a significant number of small firms do not know where to turn for advice on these matters.”

As well as struggling to stay within the rules, the survey revealed up to a million small companies could be missing out on grants they are entitled to as they do not fully understand the system.

Recently, the government announced it would move forward with reforms to areas such as redundancies in order to try and reduce some of the burdens on businesses.