New bill to help small businesses

IN June, the government published the Small Business, Enterprise and Employment Bill with a number of new measures designed to helping small businesses thrive and compete

  • Date: 24 September 2014

Here we look at the main aims of the bill which is currently working its way through the system:

Zero hours contracts

Zero hours contracts have been a hot topic lately and the bill intends to prevent exclusivity clauses, so that no one is tied into a contract without any guarantee of paid work. This should give workers on zero hours contracts improved flexibility.

Enforcing tribunal awards

It has been reported that around half of successful claimants at tribunal never receive the payment awarded to them. The bill will introduce financial penalties for employers who do not pay the award or packages negotiated within settlement agreements.

A warning notice will be issued giving the employer 28 days to pay or face a financial penalty which will be paid in addition to the damages awarded. If the monies are still not paid, a penalty notice will be issued requiring the employer to pay the equivalent of 50 per cent of the original award to the secretary of state.

The penalty will be a minimum of £100 and a maximum of £5,000. If the employer pays the award within 14 days, the financial penalty will be reduced by 50 per cent.

Financial penalties for failure to pay national minimum wage (NMW)

Currently, there is a £20,000 maximum penalty for failure to pay NMW but the bill amends this to £20,000 for each worker not paid the NMW, meaning if an employer underpays five workers, they could face penalties of £100,000.


This aspect of the bill looks to provide greater reassurance to whistleblowers with a view to achieving a consistent standard of best practice. This aspect of the bill will give the secretary of state the power to require certain ‘prescribed persons’ to report annually on any whistleblowing disclosures made to them.

Public sector exit payments

In certain circumstances, such as a redundancy situation, public sector employees can be required to pay back some or all of their exit payments if they return to work within a proposed period of time.

Also included is the ‘one in, two out’ framework, where government departments are required to ensure that any new regulations are offset by a reduction in regulation elsewhere.

This page was correct at the time of publication. Any guidance is intended as general guidance for members only. If you are a member and need specific advice relating to your own circumstances, please contact one of our advisers.

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