Hello, and welcome to the latest update from FeRFA Business Shield.
I hope you’ll find the information useful and remember, if you have any questions or queries, please do not hesitate to contact me on 07854 938 693 or email firstname.lastname@example.org.
Barry Nicol, FeRFA Business Shield Account Manager
Running a family business can sometimes mean that policies and procedures may be treated as being ‘flexible’ and so we asked the team at FeRFA Business Shield to look at some of the challenges that a family business may face:
Nathan Jones, Director and Head of Health & Safety at FeRFA Business Shield
The size of the business can have a great impact on compliance, especially if there are less than five employees, as it usually means that a smaller workforce may mean lower compliance.
Some points to consider are:
- Research shows that over 70% of non-compliant businesses are owned and operated by family members, and when an accident happens it can be catastrophic; 80% of businesses fail to survive a major event.
- When a business is prosecuted for a breaches of legislation i.e. Health & Safety at Work Act 1974, the fine can be unlimited. If the business is convicted, it is also likely that it will be ordered to pay the court’s costs as well as its own legal fees. Taken as a whole, the totality of fines, legal fees and costs can be crippling, but when you add them to the costs and consequences arising from the simultaneous conviction of its directors or partners, many businesses do not survive.
- It is important to consider the fact that each individual director and partner and every senior manager is also liable for a breach of health and safety regulations, and may be personally prosecuted as well as the business. Where a death has occurred, that can include a charge of manslaughter by gross negligence.
- When an individual is convicted, the resultant fine (again, unlimited) is in addition to any fine payable by the business and the individual may also receive a substantial prison sentence. The individual’s legal fees will also have to be paid and so will any additional court costs.
- When one individual in a family is so exposed it is traumatic enough. When it is several members from the same family, it is even worse.
- Family-run businesses are more prone to health and safety failings because of the organic nature of their development and organisational structure. Generally, individual areas of responsibility are less well defined and the business operates on a system of traditions rather than on systematic policies and procedures. When it comes to health and safety, this leaves each individual exposed to the cracks.
FeRFA Business Shield can help to ensure that family run businesses are fully aware of their duties of care and the consequences of failing to discharge said duties. We can then offer sensible solutions to keep their business and their employees (family or not) safe.
Ben Crawford, Head of HR and Employment Law at FeRFA Business Shield
We deal with all types of employment issues, however, the most difficult situations tend to arise when the issue involves family members within the business. Managing family can become problematic, as it can be difficult to strike a balance between not being too harsh when dealing with a family member and not being too lenient, both of which could lead to further problems for the company.
Usually things can become very personal when dealing with issues involving family members and it can be difficult to separate business and personal lives. Employees can find it difficult to receive critical feedback from their Manager, this is even more apparent when that feedback comes from a family member. Failure to resolve the conflict swiftly and amicably could result in further damage to the business, such as creating a hostile working environment.
Alternatively, if a family member is seen to be receiving more favourable treatment than other staff with regards to promotions, pay, work performance etc, the practice of nepotism can have a huge negative effect on moral within the workforce and lead to a lack of motivation for non-family members of staff.
It is therefore vital that all employees, regardless of whether they are family members or not, are treated the same. This should start from the recruitment of new employees and continue right through an individual’s employment. All employees should undergo the same on-boarding process including:
- Having the company aims and goals clearly defined to them at the induction stage, so all employees are working towards a common goal
- Clear job descriptions for all employees, including KPIs and targets that should be fairly and consistently upheld
As well as this, all employees should be made aware of the company’s Grievance, Disciplinary and Performance Capability procedures, should the need ever arise during their employment for these procedures to be used. Managers should also receive the relevant training to ensure that all employees are treated in a fair and consistent basis.
FeRFA Business Shield are able to not only review and update contracts of employment, employee handbooks and all other HR policies and procedures to ensure that your company are not only legally compliant, as well as following best practice guidelines, but also give employment law advice and guidance on how to deal with issues that arise within the workplace.
If you’d like to find out more about FeRFA Business Shield or FeRFA Business Shield PLUS, contact Barry Nicol today on 07854 938 693 or email email@example.com