As a small business, you may feel like you’re at less risk of being taken to an employment tribunal.
In our experience, that’s not the case.
1: Small businesses are actually at a higher risk of a tribunal claim because you often manage employee issues informally. That leaves you far more exposed compared to larger companies with stricter processes and policies.
2: The new Employment Rights Act has introduced significantly more red tape and made employing people far riskier, regardless of your size.
In this article, we talk you through the different changes you need to be aware of and how you can protect your business from future claims.
What has actually changed
The Employment Rights Act expands employee protection in several areas that directly affect how you manage people day to day.
Some of the changes include:
- stronger statutory rights from earlier in employment
- lower thresholds for certain types of claim
- broader enforcement powers, including through the new Fair Work Agency
- increased scrutiny on fairness and process in how decisions are made
On their own, each change is manageable. Together, they reduce the margin for informal management and increase the expectation that you can evidence how and why decisions were made.
Why this increases your exposure
More rights for employees means more routes to challenge a decision. That is not a criticism of the law. It is just a practical reality you need to plan for.
Where previously a short-service employee may have had limited options to bring a claim, the thresholds have shifte
Employees now have earlier access to certain protections and the Fair Work Agency has the power to take enforcement action on their behalf, including taking businesses to tribunal directly.
There are also fewer situations where a dismissal can be treated as low risk. Even in the early stages of employment, how you handle performance, conduct and expectations matters more than it used to.