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Since 1997, there has been a notable growth in the degree and complexity of employment regulation. Such regulation has arisen from the intention of contemporary Labour governments to promote greater ‘fairness at work’, and their adoption of European employment directives. It has been established that meeting compliance is a greater burden for smaller firms. Hence the author aims to consider compliance with employment regulations by smaller firms, and this issue is explored through an empirical study of labour management in smaller firms based upon responses from 44 firm owners or managers and 71 of their employees.