In a recent leaked letter to Michael Heseltine, the deputy prime minister, Ian Lang, president of the Board of Trade, referred to a proposal from Mr Heseltine that the employment rights of people working in small firms should be reduced.

The contents of the letter, and the ideas which lie behind it, demand closer examination.

Mr Heseltine's proposals included a possible abolition of the right to present a complaint of unfair dismissal to an industrial tribunal, which is generally acquired after two years' continuous service.

Responding to press comment after the leak, a spokesperson for the Department of Trade and Industry said that there were no 'firm proposals' for legislation and added: 'The government is always concerned to ensure that burdens on business are kept to the minimum possible.

Our aim is to maintain a fair balance between the rights of employees and the burdens on employers.

We are, therefore, always concerned to reduce unnecessary burdens.'However, it is worth considering what effect these proposals would have on solicitors as employment lawyers and as employers and employees if they were implemented.In the course of the recent debate on the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1995, which exempt from the ambit of the regulations collective redundancies involving fewer than 20 employees, the government noted that this exemption would affect up to 96% of employers and save approximately £85 million.

It has been estimated that firms employing fewer than 25 people account for about seven million workers.

Therefore, the potential impact of any amendment to the law is considerable.

Our employment law already exempts from its protection or takes into account the size of the employer business.

The most recent example is contained in the Disability Discrimination Act 1995, which does not apply to employers who have fewer than 20 employees.

These employers do not have to provide a note of disciplinary rules under the Employment Protection (Consolidation) Act 1978, as amended by the Trade Union Reform and Employment Rights Act 1993.There are other examples.

There are special rules for small employers in relation to reclamation of statutory maternity pay, an employee's right to return after pregnancy -- where there are five or fewer employees -- workplace ballot facilities -- where there are 20 or less workers -- the provision of a health and safety policy statement -- where there are fewer than five in an 'undertaking' -- and the requirement to record in writing significant findings of a risk assessment -- where there are fewer than five employees.

Even where there is no numerical threshold, the law has highlighted the special case of the small employer.In relation to unfair dismissal claims, the industrial tribunal must take into account the 'size and administrative resources of the employer's undertaking'.

Case law also demonstrates that size may be relevant when considering the level of formality required in workplace procedures.

There are limited exemptions for private households where race or sex discrimination is an issue, although solicitors will be particularly concerned about the law relating to partnerships.

S.10(1) of the Race Relations Act 1976 provides for an exemption between partners in the case of partnerships with fewer than six partners.

The rules relating to sex discrimination apply regardless of partnership size.The UK government is not alone in its concern to protect small businesses.

The German federal government also has plans to facilitate the dismissal of employees in small businesses.However, no amount of tinkering with legislation can alleviate completely the inherent difficulties associated with the conduct of small enterprises.

Small businesses do have some advantages where the conduct of industrial relations is concerned, for example, the opportunity for regular face-to-face contact, close working relationships and the ability to react quickly to events.

But these advantages may turn into disadvantages if they are not nurtured in the correct way.

Many small firms simply do not have the time or resources to devote to employment issues or have ready access to skilled employment law advice.

In such an environment it is important that there should be more legal protection rather than less.

The Institute of Personal Development said Mr Heseltine's proposal was 'unhelpful'.

Others have used stronger language.At the heart of the debate is a concern that employment protection legislation is a right to which everyone should have access, regardless of circumstances, unless there is a demonstrable reason for exemption.

Even the representatives of small businesses have been quoted as not supporting Mr Heseltine's proposed reform, citing instead a bureaucratic and burdensome tribunal system, and complicated laws.

These are subjects which employment lawyers recognise as in need of continuous review.

A Bill dealing with changes to industrial tribunals is expected to be published 'shortly'.When Mr Lang wrote to Mr Heseltine, he cautioned him about the possible illegality of his plans, particularly bearing in mind that according to one statistic, 55% of employees in small firms are women.

The extent to which the proposals infringe European principles of equality and access to effective remedies for infringement of European rights is an issue which the government ignores at its peril.

The complexity and sophisticated nature of our system of employment protection legislation may yet be the reason why 'favoured employer' status is not given to small employers.