SMALL businesses in Worcester are not protecting themselves against compensation claims from disgruntled employees, says the Forum of Private Businesses.
The FPB, which influences the law and policy that affects small business, carried out an e-mail survey that revealed four in 10 businesses were not protecting themselves.
Firms with 20 or more staff are legally obliged to have their own formal procedure to deal with staff grievances,
However, the FPB recommends all small businesses should have one to encourage employers and staff to reach an amicable settlement themselves.
"Because claimants can now receive up to £50,000 compensation, an entire company can be brought down by a single disgruntled employee," said Alison Fletcher of FPB's research department.
"Obviously there is a need for clarity and guidance for small businesses with limited resources," added Garry Parker, FPB's head of policy.
"Whilst employees should be protected against unfair treatment and dismissal, they should be discouraged from taking employers to tribunal just to try and get money out of them."
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