The British Chambers of Commerce (BCC) has suggested that proposals seeking to increase redundancy pay could have a negative effect on businesses that are worst effected by the recession.
David Frost, director general of the BCC, was commenting ahead of the second reading of the Statutory Redundancy Pay (Amendment) Bill being debated in the House of Commons today (March 13th).
Mr Frost said that if the Bill is successful it will mean firms will suffer from "extra financial burdens", which they can ill-afford.
He explained: "This is the wrong time to be contemplating a large increase in statutory redundancy pay. Businesses are already having cash-flow problems and this will simply add to that."
The government, he suggested, should instead look to help employers "retain their staff". He said that by "reducing regulatory burdens, reintroducing the Temporary Short Time Working Compensation Scheme and freezing the national minimum wage", companies may feel less pressure.
According to the BBC, Labour MP Lindsay Hoyle has the support of 149 Labour MPs as he attempts to link redundancy pay to average earnings.