Business legislation - the cost to businesses

AQA BUSS4 students are likely to be covering Business Legislation and Business and the EU about now. News over the weekend about new regulations giving workers a legal right to extra time off work if they become ill while on holiday give a useful case study combining both areas, as the regulations are due to changes to the European Working Time Directive, and state that time taken off work for sickness, maternity and paternity leave must be given to workers in addition to their legal right to annual leave.

The regulation has been in the offing since September 2009 when the European Court of Justice ruled that employees had the right to ask for statutory leave to be “reallocated” when it was spoilt by sickness. Under the terms of the judgement, employees would even be allowed to carry any annual leave ruined by illness over into the next holiday year. At that time workers could “self-certify” their illness for up to seven days by calling in sick. For any longer they needed a doctor’s note to confirm their continued illness. Ministers admit that companies are worried that the new rules are open to abuse as workers could falsely claim they were sick in order to claim more leave at a later date, although the new rules say that employees will be only able to claim the extra time off after they have produced a sick note. The new legal regulations will be introduced in October and the Government estimates that they will cost employers more than £100 million annually.

David Cameron has repeatedly pledged to cut regulation in order to cut the costs of ‘red tape’ for business. The Government was due to unveil plans to exclude small firms from some employment regulations but the scheme has apparently been delayed by Lib Dem concerns about protecting employee rights. The Government is currently trying to renegotiate European working time rules and Britain’s major business groups such as the CBI have called for delay in the implementation of the rules until the results of those negotiations are clear, rather than enforce implementation in October of something which may need changing again shortly afterwards if the negotiations result in a different set of rules.