Government’s Business Taskforce finds EU regulation is holding businesses back

Code: Green

The Department for Business Innovation and Skills (BIS) has published a report produced by its “business taskforce” on the subject of cutting EU red tape. The report, which draws on evidence received from some 90 UK businesses and business organisations and over 20 business organisations across Europe, finds that businesses are being held back by excessive and complex EU regulations.

On the subject of employment law, the report finds that SME and micro businesses were the worst effected by existing EU regulation and that many saw it as a bar to hiring staff. Some of the report’s key recommendations insofar as they relate to employment law are as follows:

1. For any new EU employment law proposal the starting presumption should be that micro-enterprises are exempt. When inclusion is sensible (e.g. a beneficial proposal) micro businesses should not have to bear the same burden as large employers but should have a “proportionate” regime.
2. The European Commission should withdraw its proposal to amend the Pregnant Workers Directive which would give employees the right to 20 weeks’ maternity leave on full pay. The report estimates that if this proposal becomes law it would cost UK businesses some £2.5 billion per year.
3. Recent EU court rulings which have meant that workers’ continue to accrue annual leave even when absent from work (for example, due to long term sickness) and can reschedule leave which is affected by sickness need “urgent attention”.
4. Rules protecting employees’ rights upon the transfer of all or part of a business are too stringent. In particular, the report recommends giving employers who are taking on staff much greater flexibility when changing their terms and conditions of employment post transfer.  Regular readers of our blog will be aware that we reported on the anticipated changes to the TUPE Regulations in our previous blog on 18 September.

Whether and to what extent any of the reports recommendations can be implemented by the Government remains to be seen.

If you have any queries about this blog or BIS’s report please contact our employment team on 01737 854500 or email [email protected].


Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.

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