Can your business afford a £36,000 Tribunal pay out? | Stocktaking

March 13, 2017 - Posted by: Guy Porteous - In category: Blog, HR - No responses

So imagine this, you’re running a busy sports bar in central London, working hard to attract and retain valuable customers in what I’m sure is a highly competitive marketplace. You’re doing everything you can to keep costs to a minimum to maximise your profit potential.

In the current economic climate, even in the aftermath of the recession, as a business owner myself, I can empathise whole-heartedly and appreciate why most business owners are still holding the purse strings tight and watching every penny.

However, this said, as I sat reading the tribunal papers concerning Marcelo Lagos versus Number 1 Bar Ltd, whereby Marcelo was awarded a whopping £36,000 for being unfairly dismissed by his previous employer, I could only shake my head in amazement how in this day and age any business owner would not only put their business at such significant risk but also treat an employee in such a way.

Now I’m not going to provide the ins and outs of the actual case, however, Marcelo Lagos, working as a Head Chef within the Number 1 Bar, won his case for unfair dismissal based on him being unfairly dismissed. The reason for his dismissal was not for the reason given by his employer but actually due to him raising health and safety concerns in regards to the equipment used within the kitchen which led to him being burnt.

The tribunal case also heard details of racial discrimination, failure to pay outstanding monies plus failing to provide Marcelo with a contract of employment.

Over the many years, working with a multitude of business owners, as an HR Consultant I have seen many things that at times cause me real concern. But actually, it is very rare nowadays that I see actions being taken by business owners that are a deliberate attempt to avoid following legislation or a deliberate attempt to cause distress and physical harm.

What I see day in and day out are business owners working incredibly hard to run their business in a way that avoids unnecessary cost, attracts custom and building a strong team to support their efforts, driving their business forward.

When things go wrong, which more often than not, they do, it is because legislation is either not known about or the correct processes are not adhered to due to a multitude of reasons that unfortunately stack up should a case go to tribunal.

So, that got me thinking …. What is it that fundamentally busy business owners need to know to stay safe and within the confines of the law? Below are my top 5 tips that business owners need to know and adhere to when they have employees:

Issue a contract of employment

As an employer, you have a legal duty to issue employees with certain information within 8 weeks of them joining your business. This includes statutory information about their pay, hours, holiday and other areas of employment. Without it you could be in breach of contract should a case go to tribunal.

5 employees or more?

When you have 5 employees or more within your business you need to provide certain policies to your employees. These policies include discipline and grievance as well as health and safety. Although the legal requirement is from 5 employees, I would advise you to consider whether it is worthwhile having these policies in place from the start. This ensures that you are providing your employees with the information that they need to adhere to and that you will manage them by.

Have a robust recruitment and probationary process

By having a robust recruitment and probationary process in place you can avoid the unnecessary stress, hassle and cost to you and your business. You attract and hire the right person, with the right skills, knowledge, behaviour and expertise that supports you and your business, meaning less time going forward managing poor performers or constantly recruiting for new employees.

Ask for help

There are always 100 and 1 things on a business owners ‘to-do list’ sales, services, products, marketing and accounts just to name a few. People management, specifically the understanding of ever changing legislation, case law and best practice processes is something that many business owners simply do not have the time to get into the detail of. You are the expert of your business, you know your business down to the finest detail and understands what needs to be done in its day to day operations. This said there are never enough hours in the day to be an expert in all areas that impact on your business.

Seek support and resource with the areas that can easily be outsourced. You free up time and gain valuable business support at a fraction of the cost compared to having a specific in-house person. You gain peace of mind knowing that when challenges crop up or your business needs to change to stay competitive you have an expert keeping you safe and protected through all eventualities.

Communicate Communicate and Communicate some more!!

Now, I’m saving the best till last. Have you ever heard anyone say ‘that’s not what I meant’ or ‘I shouldn’t have to spell it out, it should be common sense’ unfortunately, miscommunication is at the centre of most cases of conflict; as times continue to change people’s intentions and perceptions can be very, very different. It is imperative that as a business owner you communicate in a way that your employees understand, therefore reducing risk.

Try as much as possible, regardless of how tedious at times it seems to explain why you are giving an instruction, what the benefits are to the individual and business and be clear of your expectations. Include non-negotiables including time limits and processes to follow (if applicable). Don’t assume your employees will complete something in the same way you would if you don’t explain how you want it done and why. Don’t take it for granted that your employees know what it is you want and exactly what their job entails.

There is a difference between being clear in your expectations and micro management. In my business, I ideally want to control everything so that I know it is done efficiently and effectively. However, I learnt that the only thing this brings about is ‘personal burn out’ and a lack of business growth. To follow a process of delegation, follow-up and feedback, allows you to oversee the areas of your business as well as allows you precious time to work on your business instead of in it all the time.

Praise more than you do. Now I used to fall foul to this, as a busy business owner you sometimes take for granted that your employees are doing the job that they are paid to do. However a thank you and job well done is a simple but very effective way of increasing motivation, commitment and loyalty. Employees will feel valued far more than if the only time the ‘boss’ really speaks to them is to give them things to do and reprimand them for a job not done well.

Author Bio:

Nicki Mawby @HR-YourBusinessMatters

Working in HR for nearly 10 years and with many more years in management before that, I have the commercial and operational acumen to understand how businesses work. The advice and support I provide will be a natural extension of your business. My main focus is to take the hassle out of HR, no jargon no nonsense, just straight talking guidance that ensures you get the best out of your employees in a way which suits your business.