How cutting red tape in relation to employment law could turn the economy around.

The Government could go a long way to promoting growth in the economy by making dramatic cuts to the amount of red tape small and medium-sized enterprises (SMEs) have to contend with when taking on new workers, the Managing Director of employment law specialist Bibby Consulting & Support has said.

As the Prime Minister continues to seek opinion from businesses on what legislation they would like to see abolished, Michael Slade said the foreseeable future for the UK economy will continue to be bleak unless the Government can get to grips with employment law immediately.

According to the latest figures the UK economy contracted by 0.2 per cent in the final three months of 2011. Worse still, some observers believe the country has already dipped back into recession and the economy will continue to contract throughout most of 2012.

"Over recent years it has become increasingly difficult for employers to take on new members of staff and even harder to dismiss them if they fail to perform as expected," Slade said. "All too often, companies view staff recruitment as a process fraught with difficulty and risk. If for any reason the relationship does not work out there is also the perception that ending it can be extremely time consuming and expensive, but it really doesn’t need to be that way.

Slade went on to comment that, "Businesses should be encouraged to take on new recruits. For this to happen there must be financial incentives for SME’s, such as tax relief and reduced administration and immediate changes must be made to the Employment Tribunal system so that employers could worry less about the repercussions of dismissal. The government must also tackle the imbalance in employment law which still sees employee’s rights outweigh those of the employer."

Slade concluded: "By taking radical action now – and I mean immediately – the government could go a long way to promoting real and sustainable growth in the economy."