PO Box 28287
Telephone: 0131 662 6988
Fax:0131 667 8175

23 Cramond Glebe Rd
Cramond Village
Telephone: 0131 336 1619

Free EnquiryEmployment Law Insurance

Should you insure your business against employment disputes?

The combination of pressures exerted by the recent Spending Review and the overhaul of the Employment Law system has caused a marked increase in the number of employee disputes. Figures released by the Forum of Private Business (FPB) revealed that over 30% of calls received by its employment helpline related to employee disputes and redundancy issues. The majority of redundancy issues were flagged up by the news that the coalition Government expects 490,000 public sector jobs to be axed by 2015, as a result of its dramatic spending cuts. However, Employment Law seems to be exacerbating the issue. Tony Parry of the FPB said that “Employers must be given greater freedoms to make staffing decisions based on aptitude, attitude and performance without the fear of huge bureaucratic costs and being taken to a tribunal. At present, much of the employment law that is supposed to protect workers is a significant barrier to job creation for many small firms.”

While the mechanics of the issues raised by the Spending Review and the Employment Law overhaul can only be assessed on their individual circumstances, the results for employers have a common thread. They disrupt the flow of business and the concentration of manpower can become diffuse as employers draw on their resources to try and resolve employee disputes. As a consequence, many companies in the UK are reviewing their business insurance policies to try and minimize the negative effects of these disputes on their firms.

A buffer for businesses.

Business insurance is a blanket term that covers a number of policy types. In essence, and as with any form of insurance, it is a form of financial protection designed to offer a buffer in the event of unforeseen events. Types of cover typically include cover against damage to property and contents, liability in the event of employee negligence, health insurance and insurance for vehicles used for business purposes. The policy that many employers are likely to be interested in during the current climate is Business Interruption Insurance.

Business Interruption insurance.

Business Interruption Insurance insures against loss or damage to the cash flow and profit of a business caused by the business being unable to operate because of interruption. In the case of employee disputes, the employer may find the employee is unwilling to work until the dispute is resolved – and is perfectly within his rights to do so. In such a situation, the employer may be in a situation where the employee is a key member of staff and his role cannot be temporarily filled by anyone else. In order to prevent the business incurring serious losses, the Business Interruption policy can be used to act as a financial plaster until the dispute has found a positive resolution.

There are many types of business insurance, each designed to deal with different eventualities. With the full extent of the Spending Review’s effects still waiting to be uncovered and the controversy that seems to be dogging the Employment Law overhaul, business owners would be well advised to take the necessary steps to prevent their business becoming a casualty of the political climate.

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"Faced with a complex industrial dispute involving three parties, Callander Golf Club called on the expertise of The Work Ethic to help resolve the situation. Sound legal advice backed by high-level negotiating skills led to an out-of-court settlement to the satisfaction of the Firm’s clients."

J Morrison, Callander Golf Club

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