BIS research: ‘Employer Perceptions and Impact of Employment Regulation’

In March 2013 the Department for Business, Skills and Innovation (BIS) published the results of the ‘Employer Perceptions and Impact of Employment Regulation’ study.

This is part of the programme of research focused on how employers view, and respond to, the employment regulatory framework. The research is divided into two distinct parts. The first focuses on the strategies that employers adopt when working within the provisions of current labour market regulation framework, in terms of taking someone on, managing staff, and letting staff go. The findings of this part of the research are reported here. The second part of the research addresses broader theme of work-life balance and explores how employers respond to family friendly policies.

This study concludes with the following implications:

  • Employers were often supportive of the need for a regulatory framework and recognised that the impact of regulation on their business was minor.
  • Reducing the regulatory obligations for small employers may not be effective in addressing anxiety amongst these employers as often they were unaware of all the rules relating to employment.
  • Employers tend to have an inflated idea of the risk of being taken to an industrial tribunal when dismissing staff. Work may be required to dispel ‘high risk’ myths in order to reduce the perception that all employment regulation is burdensome.
  • Tribunal outcomes were perceived as unpredictable. Pre-tribunal compromise agreements can seem the safest option for employers that are anxious about having to pay a tribunal award.
  • Small employers (who employed manual workers) sometimes treated disciplinary processes as a formality which they followed only when they had decided to dismiss the employee. As a result, employees may feel that they had not had sufficient opportunity to improve their performance, which may lead to disputes and litigation.
  • Encouraging small and micro employers to consistently follow a formal process, particularly when dealing with poor performance, may help them to avoid disputes and feel more confident when dismissing employees.
  • There is a clear need to provide a single information portal that guides employers to the relevant information to support employers that have no internal HR and consider regulation too complex to understand.

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