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Business Regulation - Changes to The Costs of Firing Staff

Tuesday, September 18, 2012
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A great example here of a change in the nature of government regulation of business activity - this time focusing on the costs and procedures that firms experience when they want to fire someone. This excellent 2 minute video from the BBC's Hugh Pym  explains how the maximum compensation workers can win for unfair dismissal will be cut, in proposals announced by the the Business Secretary Vince Cable. Cable has also announced the use of settlement agreements, where staff agree to leave with a pay-off but no option of a tribunal.

The UK Government is under great pressure from a variety of pressure groups and business organisations to reduce what is perceived as a burden of regulation and legislation that may inhibit business growth. These laws and regulations are commonly referred to as "red tape" and students ought to be able to see how the reduction of red tape might enable a business more freedom in its decision-making.

However, on the other hand, what might be seen as "red tape" to a business owner could also be viewed as essential protection for stakeholders such as employees (in this case), customers etc.


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