ET Fees – what should small organisations do?

You’ve probably seen today’s news that the Supreme Court has ruled that the current Employment Tribunal fees system is unlawful, primarily because it denies individuals the ability to exercise the rights granted to them by Parliament. If you run a small business or charity, you may wonder what this means for you. Here are some key tips

  1. Don’t panic – today’s ruling simply restores the legal situation to what it was in 2013.
  2. Treat Employees legally and fairly – you should be doing this anyway, most employers already do. If you’re not sure exactly what you should be doing, my posts here and here may help
  3. If you do get a claim from someone relating to a past dismissal (or other issue), alleging they were unable to make a claim at the time due to the fees, seek advice immediately. 
  4. Don’t believe the hysterical nonsense in the Daily Mail (actually, that’s true of most employment law issues)
  5. See point 2

Be Careful What You Wish For

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

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)

Flexible friends…?

Today (30 June) marks the extension of the right to request flexible working to all employees with more than 26 weeks service. It’s deemed significant enough to feature on the headlines of Radio 4’s flagship Today programme, and to have attracted this slightly hysterical article in the Daily Mail – so what does it mean in practice for small business?

Firstly, up to today, the right to request flexible working was restricted to those with young families or caring responsibilities (e.g. looking after an elderly relative). And to make this request there was a formal process with specified deadlines which both employer and employee to follow.

From today, anyone who’s worked for you for 26 weeks or more can make a request – without having to give you a reason why – and the cumbersome paperwork is no longer required (in reality, very few small employers bothered with the bureaucracy anyway).

The important thing is that it’s a right to ask. It’s not a right to demand. You can legitimately refuse a request if it would add to your business costs, provide a worse service to customers, affect quality or productivity, if you cannot reorganise workloads or recruit additional staff, or if there is not enough work at the time the individual wishes to work. In other words, the same common sense reasons why you wouldn’t make any other change to your business.

However, don’t make your default position “no”. Despite the tabloid nonsense, most people will make a request because they have something going on in their life outside work that is impacting on work. A small adjustment might be all that’s needed to retain and motivate a member of staff. And it’s not “take it or leave it” – you can discuss options with the employee concerned and often come to a solution that works for you and them. Again, in my experience smaller employers are not only willing to try to accommodate requests, but actually find that it can be an advantage in attracting staff from competitors. It’s the big bureaucracies with their fear of “setting a precedent” that are less willing to be flexible.

It’s ironic of course that for years business leaders and employers’ organisations have been calling for workers to be more “flexible and adaptable”. Since employment is a relationship, it’s not unreasonable that some employees might want their employer to be flexible too. But in practice, despite the scaremongers, I’m not expecting that my phone will be in meltdown today as hundreds of employees besiege my clients with flexible working requests!