The new laws for trade union recognition will have a devastating impact on the growth plans of small brokerages, warns a leading employment specialist.

Lance Racey, senior employment law consultant at Manchester-based Peninsula, warns that many firms will stall their growth rather than face the extra burden and responsibility of the red tape.

He estimates small business owner-managers could lose a day a week in productivity if they have to spend time grappling with the legal proceedings of the new regulations.

Small businesses who employ more than than 21 employees will be compelled to recognise a trade union if there is a mandate from more than half of the staff under the new rules

"It is the very burden of red tape that I am angry with. This, coupled with paperwork and negotiating with union representatives, I fear, will take a day a week away from the running of the brokers and their commercial clients," Racey says.

"As a result some of these businesses would rather hold their growth so that they do not have to experience the extra burden and responsibility."

"As time goes by, brokers and their commercial clients will be tied down by the deluge of red tape that needs to complied with, whether it's paperwork, or bargaining following union recognition."

Racey adds that his estimate of losing one day a week in productivity is conservative and that it could stretch to two days when other teething problems are factored in.

The new regulations enabling employees to vote for union recognition come in on June 6.