Unions deny new laws could cripple companies

Claims that changes in employment law could allow contract workers such ascaterers to "bring companies to their knees" with unfair dismissal claims have been criticised as scaremongering by union representatives.

Law firm Osborne Clarke has warned that employing external contractors could have serious implications forbusinesses under proposals outlined in the Government's new Fairness at Work White Paper.

It is concerned about plans to extend the definition of "employee" to include "all those who work for someone else, regardless of whether or not they are strictly employed under a contract of employment".

As a result, companies employing external contractors could face employment protection claims, such as unfair dismissal, from individuals carrying out the contract work.

"The proposals are of crucial significance to employers," said Nick Moore, head of the employment department at Osborne Clarke. "Once they are in force a single botched dismissal could bring a company to its knees."

Dave Turnbull, TGWU hotel and catering regional officer for London, said: "This sounds like scaremongering to me."

Turnbull added that the proposal would bring more fairness into the workplace.