Reducing the burden on business – changes to employment law in the UK? By Matthew Howse and Emma Damiral

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Introduction - The UK labour market is one of the least regulated labour markets among developed countries, with only the US and Canada having lighter overall regulation. Nevertheless, the UK government is concerned to do more to encourage firms to take on staff and to have a labour market that is ‘flexible, effective and fair’ amidst fears that the economic downturn and an inability to compete globally have been exacerbated by debilitating regulation. With pro-employer labour law reforms being discussed in other European countries, it is conceivable that the economic downturn will trigger a change in approach in Europe.

In a speech in late 2011, the government set out a number of proposals which, if brought into force over the next few years, will have the result of radically overhauling employment legislation in the UK.

The government’s proposals have the aim of breaking down structural regulatory barriers that are believed to be onerous and place unnecessary demands on businesses. The government’s view is that less regulation will lead to a more successful economic recovery in the UK while still continuing to safeguard workers’ rights. Brave claims have been made about the proposals, with the government estimating that it will deliver £40 million in direct savings to employers each year. A summary of the proposed changes is set out below.

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