Back to work: the role of small firms and enterprise

Tribunals

The Government is reforming employment tribunals to make the system more cost effective and fairer to the employer, while at the same time maintaining justice for all. Employment tribunal costs for employers - with the
Read more cost estimated at £6,900. The time an employer needs to prepare is also burdensome. An employment tribunal is seen as a no cost option for an employee but can be damaging for an employer as many decide to settle weak claims rather than successfully resist them.

We welcome reforms, especially proposals to introduce fees for claimants as it will help reduce the perceived risk of taking on staff. We also hope that the proposals will reduce the number of serial claimants and speculative claims.

What we have done
The introduction of claimant fees for employment tribunals has been a key ask or ours for the last two years. We were delighted when Government announced and consulted upon the FSB's recommendation.

We provide members with a free legal advice line, open 24 hours a day, 7 days a week.

Solutions
Under the current proposals to introduce claimant fees into the employment tribunal system, the majority of claimants would be exempt from paying fees. We are calling for a two stage fee structure to be put in place where the claimant would initially pay a small fee for the first stage of the process and then another if their case is heard.

To maintain a balance between employers and claimants, we believe that the majority of claimants should pay fees and these should be lower than the Government has proposed, with a higher fee being payable if a claimant believes their claim is worth over £30,000.
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Unemployment

Although there have been signs of improvement recently, the labour market remains fragile and unemployment is still high. This chimes with the FSB's 'Voice of Small Business' Index which shows that small businesses
Read more lack confidence in future prospects and this is having an impact on their ambitions to take on staff.

What we have done
The FSB has called for some time that the the New Enterprise Allowance should be available from day one of a person claiming Jobseeker's Allowance. We are pleased that the Government has listened and scrapped the six month wait so that people with a business idea can access funding.

Solutions
Although small businesses are the most important route into the labour market for many, they need clear, positive incentives to hire. Providing a National Insurance Holiday to micro firms that take on new staff would create around 45,000 jobs and add £1.3billion to the UK GDP if it were available UK-wide.
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Pensions

Changes to workplace pensions law means that from 2017 all employers will have to enrol each of their staff between 22 and state pension age, and earning more than £8,105 a year into a workplace pension scheme.
Read more The date a business has to comply depends on the number of employees it has. The process will begin from October this year and end in April 2017.

The FSB is supportive of automatic enrolment but the procedure is far too onerous on small businesses. The FSB believes that this could have been avoided if simple steps had been taken at the beginning of the process to understand the administrative burden it will have on small businesses.

What we have done
The Government has delayed automatic enrolment process for small businesses with less than 50 employees. We welcome this with the provision that it provides an opportunity to iron out remaining concerns, such as the time and cost to small firms.

We provide a pension scheme for FSB members

Solutions
A delay will only be worthwhile if a true impact assessment is published, taking into account the resources and time available within a small business. This assessment would help to substantially reduce the administrative burden for small firms.
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Regulatory reform: where next?

Small businesses have said for years that regulation is a huge bugbear to them when running their business. Last year, four in 10 small firms saw the cost of complying with regulation increase and six in 10 said
Read more complying costs more than £1,000 a year. The UK ranks 83 out of 142 for the regulatory burden it places on businesses. To mark the anniversary of the introduction of a three year moratorium of new regulation for micro businesses, we called for an independent body to be set up to scrutinise new Government regulations and to defend the needs of small businesses. Despite numerous initiatives, impact assessments show only one in three new regulations are fully fit for purpose.

What we have done
We were paramount in getting the moratorium on new regulation for micro businesses introduced and a key player in getting the one-in, one-out policy in place to help stem the flow of regulations as well as cut the number of regulations that exist.

Solutions
There needs to be a fundamental cultural change to how policymakers and regulators work to better support businesses. We are calling on the Regulatory Policy Committee to be given powers to become the watchdog of the whole regulatory reform agenda and scrutinise the performance of the department and regulators, acting as an ombudsman to reform regulation.
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