Memorandum submitted by Federation of Small Businesses


The FSB is a membership organisation which represents 215,000 small businesses around the UK.

Small Firms employ are larger number of women and disabled people as part of their workforce.

There needs to be more support and information for employers to help keep people in work

Confusion over current equality regulation can create barriers between employers and employees rather than help the employee.

Small firms do not tend to classify their employees, either at interview or during employment.

The FSB would not support restrictions on procurement based on equality policies

Access to work should be targeted at small employers who are most likely to struggle to make adaptations

The FSB would echo the European directive "that the size and resources of the business should be taken into account when looking at the costs of making changes"

We have tried to answer these questions reflecting the views of small firms where there is often a unique employment relationship that is often not taken into account in legislation.

Equality in Employment.

1) Equality in employment has been as much affected by changing attitudes and communities in the UK as it has by legislative changes. Small businesses in particular tend to reflect the communities they are based in, and as a result tend to employ more women, older people and disabled people in their work force than larger firms. The Federation of Small Businesses (FSB) is launching a paper from Westminster University on the 10th December which highlights the important social role small businesses play in this area. A copy is attached as further evidence.


2) As discussed in the IEA publication "Should we mind the Gap?" by J.R. Shackleton direct pay discrimination in the work place is actually very rare. There have also been other massive strides in this area which the reports highlight with full time employed single women in the UK now earning more per hour on average than single male counterparts. This is a huge change, and the result of a range of factors, but importantly the different expectations of educational attainment from 25 years ago. Work still needs to be done to provide better careers advice for girls leaving education at 16 so they do not automatically end up in the lowest paid skill sectors, whereas their male counterparts tend to enter the more skilled workforce eventually commanding higher pay.


3) No one has quantified yet whether the changes to maternity and equality legislation in the last ten years have improved the gender pay gap after women have children. In this case while women who were unprotected, and had lower educational expectations at school remain in the workforce it is impossible to see a change in outcome when looking at the overall pay gap.


4) Employers need more help, support and information to keep employees they already employ who become disabled or long term sick. Low levels of awareness of Access to Work amongst small business owners automatically disadvantage their employees. It also damages the chances of a disabled person getting employment in direct competition at interview as business owners will not be aware of support and help they can receive when considering reasonable adaptations.


5) Many small business owners tell us that they are unsure of whether they can discuss disability issues in interviews or employment situations without being seen to discriminate. We believe that the lack of clarity in this area actually creates a barrier between employers and potential disabled employees. Work should be done with disability employment advisors before interviews to enable the disabled person to speak confidently about adaptations and access to support.


6) Because of the unique employment relationships that exist in micro firms we know that employers are more likely to respond positively and make adaptations to help employees who are carers. Current levels of awareness of flexible working also show a cultural shift in the UK workforce which should enable carers to fulfil their role without facing discrimination. The vast majority of small business owners tell us that flexible working for all employees, not just parents, is common sense in a valued small team of staff.

Equality in Goods, Facilities and Services.

7) We are concerned about any requirements that will make businesses make physical adaptations to premises. These are often costly to the firm. Many small businesses lease their buildings making it actually impossible for the business to carry out physical adaptations to the premises. The FSB was pleased that the EU directive explicitly states that the size and resources of the business should be taken into account when looking at the costs of making changes and hopes this is also reflected in UK law.


8) Small businesses do not want to cut themselves off, either as employers, or providers of services from a significant potential market, so it should be their desire to make reasonable adaptations. However, where it is not possible, physically or financially, to make a change the FSB does not want to see another costly burden on business.

The Public Sector Equality Duty.

9) The FSB understands why the Department for Work and Pensions (DWP) would look at procurement as a way of improving disability outcomes in the private sector. However, the FSB believes that this is not a practical measure for small firms. The Department of Business, Enterprise and Regulatory Reform (DBERR) is looking seriously at how to improve the number of small firms gaining public sector contracts, we would not want to see another written "policy" requirement added to procurement that would act as a stumbling block for small firms.


10) The majority of small firms do not record the minority or disabled status' of the employees they hire, or of applicants for jobs. These informal recruitment practices often actually work in favour of traditionally disadvantaged groups in the work place, which is shown in the Labour Force Survey. In many cases small business owners believe that asking for either the age, or ethnicity of an employee would be discriminatory against them. Any clarification in the regulation in this area would be welcome. The FSB also believes that it is positive that employers do not tend to categorise their employees at any stage during their employment allowing them to respond to individual needs rather than labels.


11) We also have concerns that a "Kite Mark" for employers would automatically work against small firms who would not have the HR expertise, or the resource to put into acquiring a Kite Mark which large firms are more able to commit.

Private Sector commitment and support, guidance, advice and information for employers.

12) As stated in paragraph Access to Work is the best kept secret in the DWP. The FSB fully supports an extension of the budget for this service, but believes it should be more effectively targeted at small firms who are least able to commit capital to adaptations or adjustments. We would like to see more employers aware of this service. The DWP has often concentrated on large firms who develop policies rather than small firms who accommodate the needs of every single person when it comes to disability. Whilst larger firms are recruiting more people what DWP gains by more by working with one person can seem greater, small firms have informal networks with one another, which leads to good practice through word of mouth. To aid people staying at work we believe that General Practitioners (GPs) should be made aware of the service so they can signpost any one in work (who develops a long term illness or disability) to help them stay in employment at the earliest stage.


13) To properly enable the individual and support employment it is the disabled person who should be approved for support from Access to Work regardless of whether they have an offer of employment. Funding would not be available until an offer is made and accepted but pre-approving individuals would empower them in the job market. If this happens then the disabled person could go for job interviews knowing that they will be able to get funding if they are offered a job. Clearly the level of funding would be unknown, but as the majority of people look for work in similar roles is should be possible to know whether they will require a buddy, help getting to work, support for a limited time, or physical adaptations in a general office environment. This would also reassure the employer that they will be able to apply for funding, which is currently an unknown element, and enable the individual, whatever their condition, to go into an interview with more confidence to talk openly about their disability. This can be a problem with mental illnesses.


14) Passporting funding so that support is attached to the individual not the job will also enable the disabled person to move on in their career. If there is doubt over whether support will be ongoing if the recipient wants to move into different organisation then this can hamper their employment opportunities, and therefore hinder their personal development.


15) Access to Work should also be detached from the Jobcentre. Sadly the Jobcentre has a poor reputation amongst small employers and having to go through the Jobcentre to gain the funding does not inspire trust or confidence in an employer looking at the scheme for the first time.


November 2008