Great large companies start as fragile small ones. Nearly all businesses are started by one person or a small group of people following a dream, a better lifestyle, independence or whatever else motivates them. They take a big risk with their savings and their income.

To an economy such as ours, needing growth and dynamism to pay for the public services we all want, these people are like gold dust. They work long hours often for limited reward and statistically have more chance of failure than success. If they succeed, reward may follow but that is more than matched by the good fortune of society which now has a new enterprise paying into its coffers.

Much is often talked about workers’ rights – always that they are “a good thing”. In principle they are good and if you are a big company with a Human Resources department you can deal with all the bureaucracy which surrounds them.

But, what if you are a tiny company employing just a few employees or even just one? – the very companies we need to encourage. Such businesses often find employment rights a miserable one-sided experience .

Three real examples to illustrate:

A lady who runs a small business is asked to give a job to a troubled youngster. Wanting to do the right thing she says yes. A few months later the youngster starts alarming customers and displaying troubling behaviour – and goes off sick. The employer decides she is damaging the business and wants nothing further to do with her but finds she can’t dismiss her because it's potentially discriminatory. Result? The youngster gets a cheque to go away and the employer, who was in tears on several occasions, learns a bitter lesson – she won’t be helpful again.

A small company has one employee. The employment contract is fairly simple and does not contain an opt-out from the Working Time Directive. The employee, who has been allowed considerable flexibility to set their own hours and work programme, suddenly leaves claiming unfair dismissal on the grounds that they have work related stress . The claim is nonsense, but the employee sees an opportunity to try to wrench some compensation out of the employer. Although the employer can demonstrate the claim is baseless, he faces time and legal bills to do so and his lawyers say it’s unhelpful that hours of work have not been recorded as required by the Working Time Directive. Result? The employer pays a small amount to stop the waste of time and energy. From now on family will do the job.

A lady in her 50’s bravely strikes out on her own and sets up her own business. She is outstanding at what she has chosen to do and wins work from every potential client she gets in front of. The business grows to a point where she herself cannot take more work on. She has a dilemma – does she limit the size of the business to what she can do herself or take on employees in order to grow? She worries about the liabilities and bureaucracy which comes with employing people. She hesitates. What should she do? In this case the decision is not yet made.

In all these situations workers’ rights have or potentially have prevented more jobs being created, more taxes paid and more public services being funded.

We need to debate in a more balanced way than we do whether employment laws are always good. My suggestion would be that very small businesses – employing not more than, say 3 people , should be broadly exempt from employment regulations.

Pinstripe is a senior member of Scotland's financial services community.