The employment tribunal is hardly a destination of choice and there is much to be said for not having to spend much time there.
But small businesses often don’t have the benefit of a HR team focused on claim prevention. This can be a factor in employment problems not being nipped in the bud at an early stage and matters escalating, until an appearance at the employment tribunal begins to look inevitable.
There are many ways that small businesses can avoid costly employment claims. The following examples are some of the most common employment issues that small businesses may face:
Employment contracts: While paper-light working is currently extremely fashionable, unfortunately this is not a valid excuse for not having employment contracts and policies in place. Employees have a right to receive written terms and conditions of employment and certainty over employment terms is good for both the employer and the employee.
Ambiguity over notice periods, working hours and job roles simply leads to more problems in the long run. Employment contracts can include useful terms, such as the right to pay an employee in lieu of notice if things are not working out, and restrictive covenants to protect against competition and poaching of clients.
Employment policies: Employment tribunals are rarely impressed when an employer facing a discrimination claim has no equal opportunities policy. Ditto in a whistleblowing case.
Employment contracts should state where an employee can access disciplinary and grievance procedures. Employers which have policies are in a better position to manage their workforce, which means that problems are tackled head on before they turn into claims against the organisation.
Employment policies should be regularly reviewed and updated and be readily available to employees. Generally, they should not be contractual and are more for guidance in line with best practice.
Poor performance: A reluctance to deliver difficult messages and a head-in-sand approach towards poor performance spells trouble. To ensure that employees are achieving targets and objectives, performance should to be reviewed on a continuous and regular basis.
Small businesses may find it helpful to develop an appraisal system to identify where improvement is needed. A paper trail is key.
Flexible working: While employees do not have the right to work flexibly, there is an obligation on employers to deal with requests in a reasonable way and not to reject them out of hand without reference to a business rationale.
There are few jobs that cannot be done more flexibly today and a family friendly workplace is likely to be seen as a more attractive option, encouraging better retention rates and loyalty. Special care should be taken in dealing with female employees with childcare responsibilities to stay on the right side of the sex discrimination legislation.
Sickness: Employers need to ensure that they handle sickness issues sensitively, both while the employee is off from work and when they return. Sick pay policies should be managed in a consistent way, especially when there is an element of discretion about whether to pay more than statutory sick pay.
Employers should be alert to the need to stay on the right side of disability discrimination legislation and make reasonable adjustments for employees with disabilities. A disability may not be tangible so a cautious approach is recommended.
The benefits of getting things right from the start in employment law terms cannot be overstated. The cost and management time of defending an employment tribunal claim can have a big impact on a small business. Prevention is certainly better than cure.
Rhian Radia is head of employment at law firm Hodge Jones & Allen