Category Archives: HR Tips for Business and Charities

What it says on the tin – some useful guidance for smaller organisations on HR and employment law topics

Be Careful What You Wish For

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One of the big fears for the owners and managers of small businesses is that at some point an employee will take them to an Employment Tribunal. Even if they win the case, the time, cost and stress to the owner is high. And even if the employee’s claim is apparently trivial or patently false, the thought of having your employment practices crawled over by a judge is understandably unpleasant. Matters aren’t helped by tabloid tales of companies being hit for huge compensation awards.

So the introduction of tribunal fees in 2013, which has seen a fall in tribunal claims of between 60-70%, has to be good news for small companies. Now at last businesses can get on with running effectively without fear of a discontented ex-employee making a claim against them.

Except…the pendulum may have swung too far. Most small businesses I encounter (and in my line of work that’s a lot) want to be “good” employers, they want to do things legally and properly and aren’t looking to make life as unpleasant as possible for the staff they employ. If they do something “wrong” it’s usually a genuine mistake rather than a deliberate attempt to defraud their employees.

The problem though is that when individuals can’t enforce their rights, it leaves the door open for the unscrupulous employer to ignore the law, safe in the knowledge that no-one will do anything about it. Honest, law abiding businesses that want to do things correctly are the ones that suffer, as this sad tale from the newspapers this weekend shows. The fact that the business owner is a Tory MP adds a little irony but the key point is that here is a responsible person trying to do the best for his business and employees, but is undercut by those operating at the margins – or even outside – the law.

Think about it this way. If you own a car, you pay your car insurance (no doubt moaning, as I do, about the cost of it). You do because it’s the law to have insurance. Yet if there’s no method of enforcement, why should you bother? Hundreds of thousands are estimated to be driving without insurance, taking the chance that they won’t get caught. And if they are – usually if they are involved in an accident – it’s the honest driver who bears the cost through increased premiums. If the premium becomes unaffordable you either give up your car or you drive uninsured too.

I’m not arguing that tribunal fees should be abolished completely (there’s no reason why the taxpayer should bear all the cost when they don’t in any other area of the law), but that the system needs to be rebalanced – for the benefit of decent employers as well as employees.

4 tips for Microbusinesses who need to take on staff

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Today is #microbizmattersday, a day to celebrate those who run their own businesses and employ 0-9 staff. It’s a fast growing sector and we may well see it continue to grow in the coming years.

Taking on staff can be a major issue for micro-businesses – as one report put it the owner moves from delivering their product or service to being an unpaid tax-collector and employment expert. And the sort of staffing issue that most HR professionals would take in their stride can become a serious problem, threatening the existence of the business itself. I’ve recently worked with two microbusinesses, both of whom had to handle the situation of a single disruptive employee. In both cases the situation had been exacerbated by a lack of knowledge by the business owner (primarily by failing to tackle the issues soon enough rather than by over regulatory management). And it’s certainly true that many of the microbusiness owners I work with want to be “good” employers.

It doesn’t have to be difficult to take on staff, but if you are planning to do so remember these 4 key points:

  • Get Employer’s Liability Insurance – this is a legal requirement and covers you if a member of staff has an accident or injury at work. It will normally even cover you if an individual makes a claim many years later, for example if they develop an illness which may have been the result of working for you
  • Pay people correctly – your accountant will normally operate a payroll service (or be able to recommend one) which will make sure tax and national insurance are correctly deducted and, just as importantly, paid over to HMRC. The cost of doing this is well worth the time saved trying to get your head round tax codes, allowances etc!
  • Get your health and safety right. Unless you work in a particularly hazardous environment, where you should already be aware of the risks of certain machinery or chemicals, it’s mostly common sense (keeping work areas tidy, reporting accidents etc) – although you’ll also need to start doing things like having electrical equipment (kettles, pcs, copiers etc) tested on a regular basis
  • Get your basic paperwork right. An employment contract doesn’t have to be a long winded or legalistic document, but you must give an employee a written statement.

The cost of taking advice and doing things properly far outweighs the cost of “getting it wrong” – so factor the cost of professional support in to your decision about whether you can take someone on.

If you’re a microbusiness owner, you may also find these two older posts of mine useful – One Bad Apple and Back to Basics. And if you want to know more, my book covers many of the key things a business owner needs to know. You can download it here. (I should point out that as it was published in 2012, some – but not all – of the detailed employment law has changed, although the basic principles and guidance haven’t)

Good grief

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Dealing with a death is difficult in any business but especially so in a small one where it’s likely that everyone will know their former colleague well. I’m happy to be able to include this post from Helen Tracey (who tweets as @HRPotential) which gives really useful thoughts and some links to further guidance.

When Love Breaks Down

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Listeners to radio soap The Archers (of which I am one) have been following for the last few weeks the ongoing affair between Elizabeth Pargetter, owner of Lower Loxley, a stately home now used as a Conference venue, and her general manager, Roy Tucker. In true soap opera fashion, Roy’s wife Hayley also works at Lower Loxley, as nanny/childminder to Elizabeth’s children. The affair ended with Elizabeth – much to Roy’s dismay – not only finishing their relationship but suggesting that Roy find another job.

Workplace relationships are an area that can be fraught for any employer, but particularly small ones where key staff can blur the boundaries between the professional and the personal. It’s not that they are uncommon either – it’s estimated that a significant proportion of personal relationships start in work (some even say a majority). Handling the breakdown of a relationship, especially between a “boss” and a “subordinate” can create many problems for a business.

Could Elizabeth sack Roy? Although she was very careful to say initially that she was not doing so, she might well have legitimate grounds for dismissal, under what is known as “some other substantial reason”. By giving Roy a period of paid leave of absence – often known as gardening leave – she’s making it clear that they can no longer work together. However, her subsequent actions of offering Roy’s job to his temporary replacement before finalising matters with him, and failing to follow any sort of process, have given him grounds for a claim of unfair dismissal (leaving aside the issue of whether he could afford to bring a claim). In practice, this is exactly the sort of situation that an employer and employee should try to resolve via a Settlement Agreement – a confidential and legally binding agreement to end an employment relationship – thus avoiding both embarrassing publicity for the business and personal information being made public.

But what about Hayley? Would Elizabeth and she be able to maintain a working relationship, especially as Hayley has now discovered the true reason for Roy’s late nights at the office? Again, Elizabeth might be able to use the “some other substantial reason” argument for dismissing her, but I suspect her case would be much weaker unless Hayley started behaving in an inappropriate manner. Hayley herself has quite understandably stated that she doesn’t really want to work with Elizabeth in the future. Here once again, a settlement agreement might be the logical way forward, unless Hayley resigns in a fit of pique.

Whatever happens – and at the time of writing it remains an unresolved issue – it will be an expensive fling for all concerned. And while The Archers is fiction, the consequences are likely to be the same if something like this happened in your business. It’s a worthwhile reminder of what the “Human” in Human Resources really means.

Rome, Death or Umbrage

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Humorous novelist Barbara Pym, a High Anglican Christian, once remarked that most people left her church for one of three reasons: Rome, death or umbrage. Her comment’s also true for the reasons most people leave a business.

Rome (i.e. the Catholic church) was in many respects the “competition”. If your staff are leaving to go to a competitor, what is it that they offer that you don’t? Is it more money; better working conditions; more career opportunities? Or is it that they operate in a way that is more in tune with the individual’s values? Whatever it is that makes your competitors a more attractive proposition than you is something that you need to understand and address if you can.

Although death is still thankfully a fairly rare occurrence in work, the abolition of the default retirement age means that you don’t necessarily know when an employee might decide to leave. But although you may not know the day or the  hour, you can be certain that they won’t be with you for ever. Are you planning what you will do when loyal staff retire? I recently worked with a company who had recognised that 3 long-serving senior managers were intending to retire in the next 2 years. When they assessed the consequences of this, they realised that it had “knock on” implications for employees all the way down to shop floor level.

And finally umbrage – a falling out with a boss or colleagues. Barbara Pym thought this the most common reason, and it’s one of the HR cliches that “people join organisations but leave managers”.  Like most cliches however it probably contains a element of truth. Work is a relationship and if we don’t get on with the people we work with, then we’ll generally look elsewhere for a pleasanter atmosphere.  If your staff are leaving, it may be for reasons that seem trivial to you but are important to them (for example when a football manager banned chips from the canteen) Minor gripes and moans can – if left unchecked – become toxic and employees will vote with their feet, so creating a positive culture isn’t some “airy fairy” HR idea but sound business sense.

Do you know why staff leave your business? And what are you going to do about it?