Firms advised to get to grips with UK employment regulations
Commercial insurance
24th March 2010
As the UK economy starts to recover from the recession, the unemployment rate is widely expected to fall as more businesses start to recruit staff. Small firms are therefore being advised to ensure they are aware of all their responsibilities under UK employment legislation before starting recruitment programmes and expanding their businesses.
A recent study published by the Department for Business, Innovation and Skills (BIS) based on a poll of more than 300 small business owners revealed that only one in three (32 per cent) were confident about their understanding of employment law and their responsibilities as an employer, while 34 per cent did not feel employment law obligations were relevant to their enterprise.
The research indicates confidence and understanding of their legal responsibilities varies widely among smaller companies and employment relations minister Lord Young remarked this knowledge gap needs to be addressed, while firms should seek out advice and information to ensure they make the right decisions about their business.
Employers' liability insurance can play a vital role in protecting businesses in the event they accidentally or unwittingly breach regulations relating to their staff, particularly in cases where an incident results in illness or injury to the worker involved. Businesses are legally obligated to have employers' liability insurance offering cover of at least £5 million, with few exemptions. Meanwhile, cover can also be taken out against the threat of legal expenses or employment tribunals, which can provide bosses with financial peace of mind in such situations.
Latest figures from the Office for National Statistics (ONS) covering the period from October to December 2009 show the UK's jobless rate stood unchanged at 7.8 per cent. During the same three months, the employment rate was 72.4 per cent, falling by 0.1 per cent, or 12,000, to 28.91 million compared with the previous quarter. However, the rate of decline slowed and there was an increase over the period in question of 25,000 in part-time employment to 7.69 million.
The outlook for the jobs market in 2010 is therefore showing signs of improvement and the ONS also reported a rise of 0.8 per cent in average total pay year-on-year in the last three months of 2009, coupled with a jump of 49,000 in vacancies during the same period to 479,000. However, firms have been warned by Giles Insurance Brokers Ltd. to proceed with care as the recovery remains fragile and to ensure they comply fully with employment regulations when hiring and letting staff go.
For example, the government recently announced new regulations making it illegal for firms to deny trade union members employment via blacklists, while small enterprises have also been warned recently by experts that the proposed new equality bill may place additional responsibilities on them to ensure they do not discriminate against a broader range of people than are covered by current rules, including Scientologists, vegans, atheists, those who are teetotal and Rastafarians.
According to Giles Insurance, it is of paramount importance that employers of all sizes are aware of their obligations under the law and have good liability cover in place in case they unwittingly breach current regulations.
