New figures from the Federation of Small Businesses (FSB) show that sickness absence costs small businesses on average £1,500 per year.

Long term sickness absence does not affect the smallest of businesses frequently, but when it does it has a big impact and the costs can be high. The FSB’s ‘Voice of Small Business’ survey panel shows that on average small businesses only experience 2.4 days sickness absence per employee each year – much lower than the national average 7.7 days per employee – 25 per cent said that they experienced no sickness absence at all and 81 per cent said that they were not at all affected by long-term sickness absence.

However, in the last 12 months sickness absence cost firms on average £1,500, but for nine per cent it cost more than £5,000. So it is important that the Government does more to help with the costs of sickness absence in the smallest firms.

Currently, some small businesses can feel confused by the Percentage Threshold Scheme – the current system used to calculate how much SSP an employer can claim back. This means that many small businesses either have to spend time doing difficult calculations or they have to spend money on buying in help.

With 40 per cent of small business employers claiming that dealing with holiday entitlement and sickness absence was one of the most difficult aspects of employment law, the FSB believes that recovery needs to be simplified so micro firms can reclaim all SSP costs more easily to stop them from being hampered at such a difficult time.

The FSB is calling on the Government to introduce a small employer’s relief for all firms with an annual National Insurance Contributions bill of less than £45,000 to recover SSP. This relief would be like that used for reclaiming statutory maternity pay and would use the same calculations. As a result, it would ease the administrative burden, as well as helping businesses manage sickness absence better.

Small firms care about their staff and want to invest in their health where they can. However, Government must understand the pressures small firms are under, and that this is one pressure among many. This needs to be recognised within the soon to be published independent review into sickness absence.

It will also need to recognise that small firms are not able to cope with an increase in the burden of responsibility or an increase in regulation, but that by better supporting small businesses, they could be able to improve the way that they manage sickness absence.

The Government should look at improving the way the Fit Note is used by making it electronic and increasing the training that GPs are given on how to use it.

Small businesses also need better access to free occupational health advice either through GPs or via the national occupational health phone line to make this issue easier to manage.

John Walker, national chairman, Federation of Small Businesses, said:

“Small firms act like a tight knit family and value the contribution their staff bring to the business. And research shows that staff in smaller firms are more often committed and loyal. But sickness absence is one of the most complex pieces of employment law they have to deal with. It can also be costly with small businesses paying around £1,500 over the past 12months. The Government must provide a small employers relief for statutory sick pay in the same way they do for statutory maternity pay so those small businesses that experience a member of staff on long-term sickness absence, are not hampered and are given the support they need.”

Proposals to charge small firms for ‘material’ faults found during inspections by the Health and Safety Executive (HSE) could damage relationships and may be seen as a way to raise revenue rather than improving compliance, according to the Federation of Small Businesses (FSB).

 

The HSE has proposed to extend its current systems of cost recovery to include a fee for intervention where an inspector will charge for the inspection and any subsequent actions when a material fault has been found. The HSE estimates that for an inspection that results in a letter, the cost to business could be at least £750.

 

For a small or micro business, a bill of £750 or more for a material fault could be extremely damaging especially during difficult economic times. The proposal currently states that micro firms will in general receive the same level of fees as large businesses. This will disproportionally affect micro firms as fees of this level will have a greater affect on the ability of the business to function and grow.

 

The FSB is concerned that small firms may view the proposal as a revenue generating exercise which could damage the HSE’s relationship with business. Worryingly, the proposal fails to clarify whether the money raised would go to the HSE or to the Treasury.  The FSB believes that if it goes to the HSE small firms could fear that their inspection has been influenced by the need to raise money – especially as the context for this consultation is a 35 per cent budget cut to the HSE.

 

It is important that businesses have a good working relationship with the HSE to allow them to ask for help and support to ensure they achieve compliance. With the possibility of a hefty fee over their heads they may be less likely to want to ask for help and compliance may suffer.

 

Furthermore, those businesses that wish to challenge the result of their inspection may have to cover the whole costs of the dispute if their complaint is not upheld. The FSB is concerned that many businesses will feel pressured to pay the fees and not appeal even if they have just cause due to the potentially large and undefined costs of a dispute process.

 

John Walker, national chairman, Federation of Small Businesses, said: “The FSB has a real concern about these proposals as they stand. Not only could they add to the fear that many small businesses have about health and safety regulation, but could have a serious impact on their relationship with the inspector, which if positive can help compliance to the benefit of the business and society.

“£750 is a hefty fee for small and micro businesses especially during difficult economic times. Most small businesses do not have the same resources that larger firms have to buy-in expert help and yet they are required to be experts in a wide range of complicated regulations. Instead of penalising them with large bills, the HSE should be there to help and support small firms to be compliant. For many small firms this proposal will be seen as anti-growth.”

 

Changes to unfair dismissal rules which could save nearly £6 million a year for British business have been announced by Business Secretary Vince Cable and Chancellor George Osborne.

Today’s decision will see the qualification period for the right to claim unfair dismissal extended from one to two years. This will come into force on 1 April 2012. This is the latest development in the Government’s workplace reforms which aim to increase business confidence to take on more workers.

Changes to the unfair dismissal rules follow the ‘Resolving Workplace Disputes’ consultation published in January this year which also proposed measures to encourage early resolution of disputes, the speeding up of the tribunal process and measures to tackle weak and vexatious claims.

These combined proposals should see the number of unfair dismissal claims drop by around 2000 a year.

Business Secretary Vince Cable said: “The priority of this government is to increase growth in our economy. We have one of the most flexible labour markets in the world but there is more we can do to give British business the confidence it needs to create more jobs and support the wider economy to grow.

“Businesses tell us that unfair dismissal rules are a major barrier to taking on more people. So today we have announced that only after working for the same employer for two years can an employee bring an unfair dismissal claim.”

A key part of the Government’s growth strategy is to create the conditions which allow businesses, particularly SMEs, to grow and expand by reducing regulation and maintaining a flexible and dynamic labour market.

Over the past 18 months, the Government has started a fundamental Employment Law Review to ensure that it is fit for purpose, that it properly balances the needs of employers and employees, and provides the competitive environment required for businesses to thrive.

For the next three weeks the Red Tape Challenge will focus on more than 160 different cross-Government employment related regulations that businesses have to deal with in all areas of the workplace.

The campaign asks for a variety of suggestions about how regulations can be improved, simplified or even abolished, whilst also ensuring that the current standard of employment rights for employees are maintained. Examples of regulations which Government is seeking views on include the rules on collective redundancies, employment agencies, immigration checks, the National Minimum Wage and statutory sick pay, to make sure they are fit for purpose and easier for businesses to understand.

Allianz Commercial has secured a multi-year partnership with Farleys Insurance Brokers to provide specialised SME packages to one of the broker’s key client sectors – dental and general practitioners.

Allianz will provide tailored solutions, designed to meet the specific needs of this market. The packages will cover a wide range of risks including property, surgery contents, liability and business interruption.

David Martin, head of SME, affinity and broker markets at Allianz, explained: “The package we have developed for Farleys offers a strong and specialised solution which is ideal for niche client markets. Our SME business is thriving as we continue to develop our proposition and we aim to expand into other client sectors in the near future.”

Marilyn Armitage, director of claims & schemes at Farleys Insurance Brokers, added: “Allianz understood our objective of offering an exclusive portfolio of cover and services, designed and costed specifically to suit the changing needs and strategies to small businesses.”

 

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