New employment rules are a concern

New regulations scrapping the default retirement age and extending paternity leave could harm businesses, a new survey has claimed.

The survey, carried out by the British Chambers of Commerce (BCC), found that the new rules, which came into effect at the beginning of April, are of concern to many of those firms polled. Of the 1,300 businesses questioned as to the impact of the regulations, over half (52 per cent) said they expected the additional paternity leave requirements to be detrimental to their businesses, with over a third (34 per cent) claiming they would be extremely detrimental. When asked about the abolition of the default retirement age, a fifth (21 per cent) considered it would have a negative impact.

Under the paternity leave changes, which also cover adoption, new fathers gain the right to additional paternity leave and pay if their partner gives birth on or after 3 April 2011. Additional paternity leave allows a father to take up to 26 weeks’ leave to care for the child.

The scrapping of the default retirement age means that employees can no longer be obliged to leave their jobs simply because they have reached 65 in the case of men and 60 in the case of women.

The BCC pointed out that these two major reforms to employment legislation will not be subject to the three-year exemption from new UK regulations announced in the Budget for micro-firms (those employing fewer than 10 staff).

David Frost, the BCC’s director general, said: “Our survey results show that employment law changes are causing great concern among employers, who, instead of concentrating on running their business, have to cope with more and more shifts in employment law. Every change, no matter how small, costs employers time and money.”