Labour market reform


Businesses say current employment laws are difficult to cope with and put them off taking on staff. This slows the growth of businesses and the economy.

Simpler, more flexible employment laws will make it easier for companies to hire and manage staff, while protecting workers’ basic rights. This should encourage employers to create new jobs, supporting enterprise and growth.


To make the labour market more flexible, efficient and fair the government is:

We agreed to review employment law in May 2010 as part of the Coalition Agreement.

The Red Tape Challenge to reduce regulations launched in April 2011 and includes a review of employment law.

We’ve already:

  • extended the time you need to be employed to be able to claim for unfair dismissal from 1 to 2 years
  • introduced the Enterprise and Regulatory Reform Bill which will make changes to the employment tribunal system, including ensuring all employment tribunal claims go to Acas and introducing a simpler process
  • removed the compulsory retirement age, making it easier for older people to carry on working
  • launched a pilot scheme encouraging the use of mediation to resolve disputes
  • reviewed how employment rights are enforced

Who we are consulting

We’ve carried out consultations on:


We’ve carried out an impact assessment on the benefits of resolving workplace disputes. We estimate these changes will save businesses £40 million a year.