UK business is still tightly bound in red tape, theInstitute of Directors (IoD) said today. The ever-expanding burden ofemployment regulations is bad for business, bad for enterprise and bad forjobs, research by the IoD shows.

A major new report, Red tape in the workplace: The re-regulationof the labour market II - the sequel, analyses in detail all the major developmentsin employment legislation since 1997 and concludes that:

The extra red tape was costly in terms ofmoney. The IoD has estimated that the extra cost of regulation was nearly 6bna year. The most expensive regulations related to the Working Time Directive(2.3bn) and the National Minimum Wage (2.7bn).

The extra red tape was costly in terms oftime. An IoD survey showed that members with small businesses spent an averageof 6 hours a week on red tape. In addition some members have reported that theyhave taken on extra staff to cope with the extra paperwork.

Whilst the IoD is unequivocally opposedto discriminating against people on any grounds, the current developments inanti-discrimination legislation could prove quite counter-productive.

The influence of the EU on UK employmentlaw is now very damaging.

The expansion inemployment rights has contributed to the explosion in employment tribunalcases.

Ruth Lea, Head of thePolicy Unit at the IoD and author of the report, said:

The increased burdenof regulation in recent years, along with higher taxes on businesses, isundoubtedly hurting the competitiveness of business and the economy. Thiscountry has to make a choice between a free and lightly regulated labourmarkets, low taxes, economic dynamism and strong job creation, on the one hand,and intrusive and heavily regulated labour markets, high taxes, economicstagnation and weak job creation, on the other hand. There is, in reality, noThird Way. Heavy regulation destroys dynamism. Heavy regulation killsenterprise.

Extratime-consuming bureaucratic demands distract businesspeople from running theirbusinesses, increase the possibility of litigation, damage businesses and addto costs. Moreover, they discourage job creation.

The reportdiscusses all the major pieces of employment legislation since 1997, whichinclude:

The National Minimum Wage Act (1998).

The Employment Relations Act (ERA, 1999), whichincreased collective rights (including the compulsory recognition of tradeunions) and individual rights (relating to unfair dismissal) and introducedvarious family friendly policies including the Parental Leave Directive.

The Employment Act (EA, 2002), whichenabled the enactment of the EUs Fixed-term Work Directive, introduced equalpay questionnaires, introduced statutory procedures for internal grievanceprocedures and significantly extended family friendly policies (includingexpanded maternity rights, paternity pay, adoption pay and leave and the rightto request flexible working for parents of young children).

The reportalso discusses:

A number of EU Directives comprising:

o The Burden ofProof in Sex Discrimination Cases.

o EqualTreatment (Racial or Ethnic Origin) (to be implemented later in 2003).

o The GeneralFramework for Equal Treatment in Employment and Occupation (for sexualorientation, religion and belief, age and disability, to be implemented in twoparts in 2003 and 2006).

o ParentalLeave.

o PostedWorkers.

o Part-timeWorkers.

o Fixed-termWork.

o Working Time.

o Young Workers.

o European WorksCouncils.

o CompulsoryInformation and Consultation Procedures (to be implemented in three parts in2005, 2007 and 2008).

o DataProtection.

o The TemporaryAgency Work Directive (currently in abeyance).

The Chancellors TaxCredits (including the Working Families Tax Credit now revamped as the WorkingTax Credit) can be added to the list of extra burdens, even though they are notstrictly employment legislation.

Ends 12.6.03 No.175

Notes to editors

Todays report is afollow up report to the IoDs first major research paper on the re-regulationof the labour market, which was entitled TheWork-Life Balanceand all that. The re-regulation of the labour market.(Ruth Lea, April 2001).

Copies of Red Tape in the Workplace are availablefrom the IoD Press Office tel. 020 7451 3264;prees@iod.com

The IoD (Institute ofDirectors) is a non-party political independent organisation with around 55,000members. In addition to its wide range of business services, the IoD providesan effective voice to represent the interests of its members to government andkey opinion-formers. It also brings the experience of business leaders to bearon the conduct of public affairs.

Contact Points:

Ruth Lea, Head of thePolicy Unit, tel: 020 7451 3291; pager: 07626 241749

Richard Taylor, PressOfficer, tel: 020 7451 3264

mobile and out of hours: 07721 734886

David Marshall,Director of Public Affairs, tel: 020 7451 3263

mobile and outof hours: 0776 4883420

email: press@iod.com

web: www.iod.com