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The Institute of Directors (IoD) has just released a new report, The Midas Touch, which reveals how EU directives have been ‘gold-plated’ during translation into UK law, creating unnecessary additional burdens for businesses.

The report calls on the Government to fulfil its pledge to carry out a comprehensive review of all EU laws to identify ‘gold-plating’ and then either justify it, simplify it, or remove it.

Key findings

  • ‘Gold-plating’ takes place when a member state goes beyond the minimum requirements when transposing an EU law into their national law, imposing additional cost, burdens or restrictions, usually on business.
  • In 2010 the Government said it would review the implementation of EU laws in UK legislation, and where less burdensome methods of compliance could be found, it would change the law. With certain, limited, exceptions this has not yet happened.
  • In 2011 the Government issued new guiding principles for EU legislation, meaning that businesses will only be faced with the minimum burden from new laws originating in Europe. This is a very welcome move but it only affects future laws. It is still necessary to review all existing law to strip off the ‘gold-plating’.

Case studies

 The report examines EU directives which have been ‘gold-plated’:

  • The agency workers regulations require temporary staff to be given the same terms and conditions as permanent employees after a 12-week qualifying period, and is one of the worst examples of ‘gold-plating’. The UK regulations are unnecessarily complicated – it takes almost 1000 words, for example, to transpose 10 words in the Directive on the qualifying period. The definitions of pay and working conditions are also much broader than required by the Directive. Other countries have implemented the rules more straightforwardly – the Irish definition of pay is 73 words, far shorter than the 760 used by the UK.
  • The Working Time Directive regulates employees’ working hours, rest breaks and annual leave. It contains many examples of ‘gold-plating’: the Directive stipulates 20 days of annual leave while the UK regulations require 28, the record-keeping rules are much more onerous than necessary and the exemption for workers who set their own hours is too vague to be of use.
  • Further cases of ‘gold-plating’ can be found in The Parental Leave Directive, the European Works Council Directive and the Collective Redundancies Directive amongst others.

Commenting on the report, Alexander Ehmann, Head of Regulatory Affairs at the Institute of Directors, said:

“The EU is responsible for producing much of the employment law which affects British business, but the situation has been made worse by over-zealous implementation by successive governments. The current Government is to be congratulated for recognising there is a problem and bringing in challenging requirements for new EU regulations. They now need to turn their attention to regulations already on the statute books. A ‘Midas Bill’ should be introduced to strip out all ‘gold-plating’ which cannot be justified.

Responding to the publication of the IoD report, Business Minister Michael Fallon said:

“I agree that we need to go further to get bureaucracy out of the way of business. Tough new rules introduced by the Government have stopped the gold-plating of new legislation, and I am now leading action to strip away burdensome rules that were introduced in the past. I have written to departments asking them to investigate any historic gold-plating that holds back growth.

“In Europe, we’re keeping up the pressure to resist any new proposals that threaten enterprise.”

I don’t know about you but I have grave doubts about the ability or desire of the current UK government or indeed of the Conservative Party to take on the EU on this or any other significant issue. I remember when Philip Bushill-Matthews first stood as an MEP in 1999. A major part of his campaign was that as a director of a food company in the West Midlands with another factory in the Netherlands, he struggled with complex and lengthy UK regulations whilst the Dutch version was much less onerous. Despite Philip serving as Leader of the Conservative MEPs he doesn’t seem to have had any success either in Brussels or with his own party.

Category: Political Comment

Category: Business Law

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