The legal ramifications for employers in the mid-corporate sector
Authored by Allianz
The mid-corporate sector is exceptionally varied, but one factor they all have in common is being employers. The economy means some firms are putting a hold on their expansion plans or even planning redundancies, something that must be carefully handled with expert guidance.
Environmental, social and governance (ESG) issues are increasingly on the agenda and Barclay says many companies are already embedding this into their business.
Environmental risks can be around managing responsibilities regarding climate change and sustainability as well as reducing the likelihood of any polluting activities. Social risks tend to focus on issues such as diversity and inclusion, managing data privacy and ensuring the workplace is well run with good community relations. Governance relates to a company’s policies and the integrity of these, its approach to transparency and avoiding all forms of corruption meeting its tax obligations.
“Companies want to understand where their risks lie, and we’re expecting to see more litigation in this area. But it can improve business practices, and has an impact on tendering, and customers’ buying decisions.”
Hybrid and remote working has already been highlighted. However, there can be risks with compliance and problems with monitoring and health and safety. Setting up clear policies and seeking advice early should be a priority. Employers are also likely to need guidance on so-called ‘family friendly’ rights and a private members’ bill is currently passing through parliament that should provide clarity on the ability to request a more predictable working pattern.
Kerpner comments, “It can be harder for larger firms to manage hybrid structures and they need to ensure they provide consistency, rather than an ad-hoc approach. Home-working can benefit productivity, but there can be downsides. They should also be clear on what devices home-based workers are using, and take data protection seriously. Cyber is a fast-growing area within insurance for good reason.”
Meanwhile, research from IBM Security recently showed that data breaches cost UK businesses an average of £3.4 million.
The UK currently has relatively low levels of unemployment, which can allow more employees who’re dissatisfied with their job to switch to another employer. But, where there are more serious issues, they may seek to act via an employment tribunal. Delays in the system are bad news both for the employee and the employer, which is why companies may be looking to agree more settlement agreements in future.39 These legally binding contracts can be used to resolve matters without the need to go to court.
Another issue for employers is immigration compliance, workforce shortages may prompt employers to look at bringing in staff from overseas, but it’s essential to ensure these employees have the legal right and correct documentation. If not, the company can face substantial fines, which have been increased recently.
Meanwhile, looking at the wider picture, the current trading environment is exceptionally tough. A slight fall in inflation may be signalling possible recovery, even if we’re yet to see confidence return. Notably, the British Chambers of Commerce marginally upgraded its 2023 GDP forecast to 0.4%, although it still sees weak activity throughout 2024 and 2025, a slight glimmer of hope.
Even so, the mid-corporate sector looks likely to have some difficult waters to navigate for many months to come and insurance protection in all its forms makes more sense than ever. In terms of legal threats, these can affect businesses in myriad ways and are both growing and can develop quickly. Therefore, now more than ever, businesses should seek comprehensive support to deal with the unexpected through the reassurance of legal expenses and ready access to expert counsel.
