Small businesses 'open to costly legal claims'

28-09-2006

Small businesses 'open to costly legal claims'
Too many small businesses are largely unaware of basic employment law, a leading workplace consultancy has claimed.

Croner said that too many small employers were putting themselves at risk of potentially costly legal claims by failing to follow procedures for employee misconduct, minimum pay and basic employment contracts.

One of the most common "management myths" credited by small businesses was that they were exempt from paying the national minimum wage to their staff due to their size, recently reported by HM Revenues and Customs as one of the top excuses for employers not paying minimum wage.

Employers also often erroneously believed that monthly-paid employees were only entitled to one month's notice, that a contract of employment was only valid when it was in writing and that an employee with less than one year's service could be dismissed for any reason.

Many employers believed that they could sack someone on the spot without following any form of procedure, leaving themselves open to an unfair dismissal claim, said Croner.

Employment manager of the Business Support Line at Croner, Alan Phillips, said: "While many small business owners often remark on the cost and time involved in complying with complicated 'red tape', it's actually the most basic employment principles that are tripping them up."



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