One third of bosses have been threatened with legal action from employees, according to new evidence from the 2005 Sage Heartbeat Survey.
With the march of compensation culture showing no let up, 71% of bosses feel that current employment legislation is tipped too far in favour of the employee. 19% of survey respondents even admitted they had considered giving up their business as a direct result of employment legislation and the potential legal hazards.
The blame culture means employees get away with breaking the rules because business owners are unsure of their rights, according to 36% of bosses. As a result, 19% of bosses have chosen not to fire an employee because of uncertainty over the law, while 69% believe the burden of proof on the employer is too great when it comes to disciplining staff.
In fact, the survey found that legislation has stopped 32% of businesses taking on additional people, with the situation in manufacturing seemingly worse. The solution, according to 71% of respondents, is that the UK should opt out of certain EU legislation to prevent the weakening of enterprise culture.
After issues highlighted in last year's Sage Heartbeat Survey, Sage HR Advice, a service providing customers with a detailed human resource and employment law website and access to qualified professionals, was introduced. Sage has now expanded its business advice service with the launch of Sage Health and Safety Advice.
The legally reliable services translate employment and health and safety law into plain English and promote best practice. In addition to a comprehensive website giving advice and document templates, the guidance includes email alerts, monthly newsletters, FAQs, telephone and email support to ensure that companies remain compliant.
As part of its commitment to the health of UK business and to coincide with the release of the 2005 Sage Heartbeat survey, Sage has set up an HR and Health and Safety information line on 0845 245 0268. Further information is also available at http://www.sagepresscentre.co.uk/heartbeat/sageadvice.
According to Jo Ray, Managing Director, Small Business Division, Sage (UK) Ltd, “Sage has been working with SMEs for 24 years and through our customer base of over 600,000 small businesses we understand the issues they face. Everything we do is aimed at helping business owners save time and money so they can focus on what they set out to do. While these findings are concerning, they show more than ever that businesses need help in dealing with the multitude of issues that they face in the UK.”
“Human resources, whether it be recruitment, employee motivation or compliance is vital to any business. However, many small business owners do not have access to reliable, practical advice. Sage’s HR and Health and Safety Advice services provide exactly that – they will help protect and grow your business, pre-empt issues before they occur and save time and money.
“The services are further evidence of Sage’s commitment to providing SMEs not only with the best business management software but also with outstanding customer support and advisory services.”
What is obvious is that company owners need all the advice they can get. According to Sage, UK bosses have particular problems in dealing with issues surrounding poor staff performance, long-term or unauthorised absence and redundancy. And getting it wrong can prove costly. Last year saw 115,042 employment tribunal claims brought against employers, representing a 61% rise over the past decade, according to figures from the CBI. The average unfair dismissal award (2003/4 figures) was £7,275; sex discrimination £12,971; disability discrimination £16,214 and race discrimination £26,660.
Deputy Director-General of the CBI, John Cridland, says: “With the compensation culture spiralling out of control, companies do not have confidence in the current tribunal system and are sceptical about the difference that government reforms will make.”
And claims against businesses are increasingly prevalent. Calls to Sage's HR Advice line indicate that the most common threats to employers by employees are to do with breach of contract and due to alleged sexual or racial harassment or discrimination.
“It has become a kind of lottery and you might as well have a go, even if you have been sacked for some gross offence,” says Tim Watts, Chairman of Pertemps employment agency. “One man walked into one of our agencies and asked for work. We told him we did not provide the kind of work he wanted so he left without filling in a form completely. Then he sued me for wrongful dismissal, even though I had never employed him! The court threw it out, of course, but it cost me £2,500 in legal fees.”
It is a story all too familiar to Duncan Cheatle, founder of entrepreneurial networking group The Supper Club.
“The concern among many entrepreneurs,” he says, “is that there are too many bad apples out there: those that abuse the system with spurious claims for unfair dismissal or discrimination.
“The perception that employment tribunals can be too sympathetic to the employee means that businesses who have done nothing wrong end up settling because they can't afford the time or cost of defending themselves nor the risk that a tribunal will favour the employee in spite of the facts. Any service that can provide affordable, practical advice is welcomed, especially from a company like Sage, which is widely trusted by SMEs.”
