Should micro-businesses be exempt from employment laws?

Vince Cable, the business secretary, has announced a consultation on the introduction of 'protected conversations'. Employers would then be able to raise concerns about their employees' performance without the exchanges being used in tribunals.

The Lib Dem minister also said that a consultation will be held on simplifying the compromise agreement system, whereby an agreed amount is paid to an employee when both sides agree to terminate an employment contract.

Katya Hall, the CBI's chief policy director, said the Government has obviously taken heed of the Confederation's concerns that employment law is holding back growth and job creation. The CBI welcomes changes to the tribunal system, including the proposal to resolve legitimate disputes quickly, she added.

Darren Fell, the owner of Crunch.co.uk, said that small business owners face an enormous amount of bureaucracy. In addition to running their business, entrepreneurs have to keep abreast of accounting regulations and employment legislation. Any measures to reduce that burden have to be welcomed providing they ensure staff still receive fair employment rights.

Fell also believes that the consultations could encourage entrepreneurs to hire more staff and grow their businesses. However, he did add that he hopes the new initiatives will be more successful than past Government schemes. Fewer than 2% of eligible businesses have taken advantage of the National Insurance holiday scheme that was designed to encourage micro-businesses to take on more staff.

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