Issue 6 Spring 2015
Safeguarding your business With external pressures growing, this issue focuses on how we can help you protect your business
Legislation update
Membership improvements
page 2
page 3
Policy news
Business ethics
page 6
page 7
One of the Forum’s main aims as an organisation is to help your business cope with all the issues you face. From the threat of tribunals and cyber crime to late payment and cash flow crises, the challenges can seem insurmountable. In this issue we explain new legislation, show you how we can help you protect your business from the cyber threats you may be unaware of and look at how our policy team is focusing on the ethics of doing business and challenging bullying behaviour by big businesses.
Having your say... Giving us your views means we can lobby effectively on your behalf and also helps us to develop the products and services your business needs. Enclosed is our quarterly survey for members which this quarter is on the cost of complying with legislation. Complete the survey and return it in the envelope provided or complete it online at www.fpb.org/ referendum212 by 11th May.
Forum of PrivateBusiness
improving your membership Page 3
cyber risks to your business Pages 4–5
Remember – we’re here to help and advise you whatever your business challenges. Call us on 0845 130 1722
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Legislation update With the April Common Commencement date passed, we take a quick look at the recent changes to employment legislation and summarise the changes on the horizon. Changes to statutory sick pay, maternity and redundancy pay
More rights for surrogate and adoptive parents
On 6th April the rate for statutory sick pay rose to £88.45 per week. Maternity pay, ordinary, additional paternity and adoption pay have also increased from £138.18 to £139.58. The maximum amount of a week’s pay for calculating statutory redundancy pay has also changed to £475.
Parents taking adoption leave now have the same eligibility requirements and statutory pay as employees taking maternity leave. Surrogate parents are also eligible for adoption leave.
Shared parental leave Employees who become parents now have the right to request shared parental leave and pay. A couple can now share some of the mother’s entitlement to maternity leave by opting into shared parental leave (SPL). Each eligible parent is able to submit three notices booking periods of leave. Employees can request they alternate the 12 months leave available between them, potentially on a monthly basis. In addition to this, parents taking SPL will also be able to share up to 20 optional ‘in touch’ (SPLIT) days, as well as the 10 KIT days women can get on maternity leave. Parents will take standard maternity/adoption and paternity leave and pay unless they choose to opt in to SPL instead. A birth mother must still take at least two weeks’ leave following the birth of a child – this is not exchangeable. Fathers can also take two weeks’ statutory parental leave and pay in addition to any shared parental leave. It is advisable to discuss the application in depth with the employee before they formally submit a request as repeated applications will be very time consuming to assess. Employers have no right to reject an application for continuous leave; shared parental leave can only be rejected on a similar basis to the objections to flexible working. You cannot penalise parents for using SPL, or put any pressure on them to cancel or change it.
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Parental leave extended The right to unpaid parental leave has been extended to parents of any child under 18 years.
New compensation limits for employment tribunal costs The limit for a week’s pay has increased to £475 when calculating compensation for unfair dismissal, making the new maximum compensation amount £78,335.
On the horizon – changes to managing sickness absence The new health and work assessment and advisory service is set to start operating in the next few months. It will provide advice and support to help employers who have staff members with sickness absence lasting over four weeks to get them back into work. Following an assessment, employees will be given a return to work plan, which will provide evidence of fitness to work. Remember that it is a good idea to seek advice ahead of taking any action. As well as providing regular updates, the Forum’s business advice team can give advice on all employment-related issues. For further information visit www.fpb.org or call 0845 130 1722.
Improved membership benefits for all Ian Cass, the Forum’s Sales Director, explains the recent improvements to your benefits package… In recent months we have been developing the Forum membership package to give our members what we feel is the best support package on the market; the changes reflect your feedback on the issues you are currently facing as business people. First of all we have moved to one level of membership and improved our standard insurance cover from 10 areas of cover to 12. The two areas of cover we have added are contractual cover/disputes and directors’ and officers’ liability cover, both invaluable to any business. We have also improved the tax protection cover we offer and most significantly of all we have managed to remove the 51% win clause from our employment dispute cover; we can genuinely say that if you take our advice you are 100% guaranteed cover at a tribunal – something that our competitors cannot do. In April we will be introducing an enhancement to membership which provides an even greater level of insurance cover suitable for members who employ larger numbers of staff or require a more comprehensive level of insurance cover. Members opting in to this product will also receive our comprehensive guides to employment and health and safety legislation including over 100 document templates, and an annual healthcheck of their employment contracts. With cyber crime on the increase (see pages 4 and 5), we now have a cyber security tool, provided free for one year to all of our members which will boost your confidence that you are taking all the steps you can to protect your business. We have had numerous calls from members concerned about staff and third parties causing breaches, for example by taking business contacts off site on a memory stick. An additional threat is from hackers getting into your phone system so that after you leave your office on a Friday night your phone lines are ringing out all weekend and you return on Monday to
find you have run up a huge phone bill without your knowledge. To back up the cyber protection tool, members can now take advantage of our new cyber crime insurance policy. As a member you have access to an improved service from our product partners; most significantly we have added a partnership with Toyota Lexus, which offers members significant discounts on vehicle purchases, something our competitors will be looking at with envious eyes. We have also recently introduced a recruitment service with a 15% discount provided by our partner 360 Recruitment. It’s a service we at the Forum use and highly recommend it to our membership. We look forward to adding some more partners in the next few months to offer our members even more benefits in terms of saving time and money. Finally, we will continue to improve the service to our members in line with the membership’s needs and issues, so please do feed back to us your experiences – both good and bad – as well as any ideas you may have that will help us to improve our service. If you have any questions about your membership and the benefits attached please contact the team here at head office.
For further information call
0845 130 1722 or email
info@fpb.org www.fpb.org
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Cyber security – is your business at risk? It has never been easier to do business from anywhere, at any time, thanks to online, mobile and cloud technologies. From day-to-day business functions like accounting and filing taxes to creating new sales channels online, the internet offers smaller businesses opportunities to do things smarter and faster. But at the same time, the risks to small firms from cyber threats are on the increase. Government research has found that 60% of small businesses have reported a security breach (Information Security Breaches Survey 2014). The report also found that the severity and impact of attacks has increased, with the average cost to a small organisation now between £65,000 and £115,000. Figures we can independently verify, with three Forum members experiencing losses exceeding £310,000 in the last six months alone. Worryingly, despite this increase, 82% of smaller firms in the UK think they are not a target for attack because they’re too small or don’t have anything worth stealing (Kaspersky, 2014). While a Symantec report in 2013 found that a third of attacks were targeted specifically at SMEs as criminals know they lack sufficient protection.
What are the risks? Cyber risks occur at every point where your business uses technology, including computers, smartphones and tablets, storage devices, email, social media and even phone systems. Aaron Yates, CEO at cyber education company Cyber AMI®, says that smaller firms are particularly at risk. “Most SMEs are not at the stage where they can recruit dedicated personnel to manage IT security, neither do they have dedicated HR staff to manage cyber-related training. As a result, many are wide open to threats and in the difficult position of feeling they’re unable to afford to adequately protect themselves, whilst recognising that they can’t afford not to.”
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And whilst all businesses need to be alert, some need to be particularly aware. “Professional services organisations, such as accountants and solicitors hold significant amounts of sensitive information that is highly attractive to malicious individuals. While companies that operate ecommerce websites, or have a large online marketing presence, may also be a larger target,” says Yates. With the latter, you need to consider whether you can afford to take on a new member of staff. Alternatives could include fixed-term contracts or outsourcing.
The cost to business Loss of client accounts and irreparable reputation damage Direct theft of monies from an organisation’s bank accounts – one Forum member lost £200,000 this way Penalties of up to £500,000 by the Information Commissioner’s Office for breaches of your customer data Potential for indeterminate operational downtime and loss of earnings Legal consequences in regulated professions Redundancy and business closure.
Emerging risks
Protect your business
To make things even more complicated, as technologies develop all the time, so do the hidden risks associated with them.
So what can owners do to protect their livelihoods? Yates recommends owners start thinking about cyber threats in the same way we automatically think about other security.
“The growing prevalence of a new variant of the Cryptolocker virus is particularly worrying,” says Yates. “It’s a nasty piece of ‘ransomware’ that encrypts the contents of your hard-drive and holds it to ransom for money.
“We know we have to set the alarm every day, test the smoke alarm, and lock the front door on the way out. We do them without thinking, but we’re still playing catch-up on the cyber equivalents. Small business owners need to consider where they put the locks and alarms in place for their ‘virtual’ properties.”
“But to make matters worse, the new version can now follow network connections, which means it can spread to both cloud-synced and network-connected drives so that a single infected machine plugged into the company network can result in the entire company being crippled.”
As well as the obvious external threats from shadowy cyber criminals, one of the biggest risks for a business is its own employees. At least 77% of 1,500 data breaches investigated by insurer Beazley in the first eight months of 2014 had a human element.
While fixes to external problems, like installing anti-virus software and strengthening passwords, may seem an obvious – though often overlooked – answer, there is a lot that can be done inside your organisation to create a culture of best practice. This starts with educating yourself and your staff in cyber risks. In particular, making them aware of potential exposures may reduce the likelihood of common, opportunistic ‘drive by’ incidents, like fraudulent telephone calls from those pretending to be from a bank which are on the rise.
“Employees can cause both accidental and malicious damage to a business,” warns Yates “including deleting important files, using a weak password, posting inappropriate material on social media, accidentally sending emails to the wrong recipients or attaching the wrong files, or even leaving their laptop unattended on a train.
Putting in place acceptable usage policies for IT and social media will also make it clear to employees what is expected of them. By being proactive about cyber security with staff, you will begin to build in security considerations to everyday operations, in turn delivering a more resilient business.
The human factor
“The consequences of even a simple slip in best practice can have devastating consequences on revenue and reputation.”
Helping you protect your business • ALL members get 12 months’ free access to Cyber AMI® tools and checklists (worth £120) to ensure you’re doing all you can to be secure – plus 10% discount after one year. • An additional cyber insurance policy is available to offer even more protection for as little as £50 a year. www.fpb.org
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News from our policy team
Ethics focus for Forum campaign Premier Foods, Diageo and B&Q are just some of the big names that have featured in the business press recently for abusing their relationships with small business suppliers. This trend of supplier bullying is nothing new, but in the past two years John Lewis, Halfords and Debenhams are just some of the major players that the Forum has exposed as seeking to demand payments or rebates from their suppliers. Halfords, for example, called on its existing suppliers to invest significant sums of money in the growth of its business, by requesting a rebate outside of already agreed contractual payments whilst suggesting such payments might not be a one-off.
Research shows impact of poor business ethics The results our last Referendum survey – summarised opposite – showed that many of our members, who already feel unfairly disadvantaged by rising costs and red tape, feel held back from growing by bad business practices. When dealing with large business customers 51% of you admitted that you had had one or more problems with poor payment, while 46% feel unable to negotiate terms. Politicians are all too aware of the increasing concern among the small business community about the unethical business practices being adopted by some of the nation’s big hitters and are keen to make moves to tackle the issues. However, what’s becoming clear is that a lot more needs to be done to tackle an issue that is of increasing concern to many of our small business members, and the solution will not be found/achieved overnight. Small businesses are the backbone of the British economy; and as such their interests must be represented and articulated. With an election on the horizon, it is now time
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to put even greater pressure on politicians to scrutinise the unscrupulous practices of big business. Business ethics must now be placed at the top of the political agenda.
Making business ethics a key priority To that end the Forum has recently launched a wide reaching campaign ahead of the election that seeks to hold the future government to account on business ethics, and stimulate a rethink of the relationship between big and small business for the good of the UK economy. In the coming months we will be calling on responsible corporates operating in the UK to show their support for this cause – together forming a partnership that will showcase the best of British business and cut out a culture of abuse that risks damaging the long-term competiveness of UK plc.
Working with you to highlight the very worst in business ethics Our Hall of Shame has been instrumental in highlighting the worst payment practices of some of the UK’s most famous names over the past twelve years. We are now looking to widen the focus from late payment to challenging large businesses on any practices we feel take advantage of their small business suppliers. We want to hear from small businesses up and down the country as to the current situation. Your views count and by visiting www.fpb.org/businessethics and completing the survey you can help shape the ongoing debate. All responses will be treated in the strictest confidence.
Levelling the playing field
96%
of SMEs think fair treatment of their own suppliers is important.
SMEs already unfairly disadvantaged by rising costs and red tape are held back from growing by bad business practices. How responsible are larger organisations?
80%
Family-owned large businesses
24% Banks
17%
Multinationals/PLCs
What SMEs want from the next government
Impact of bad practices on small businesses
large businesses
87%
87%
Reduce legislation, focus on individual responsibility
Encourage use of local suppliers
82%
76%
13%
Utility companies
Strengthen the Prompt Payment Code
Tackle excessive tax avoidance
51%
one or more problems with poor payment
46%
unable to negotiate terms with clients
45%
think tax burden on SMEs is excessive
Small firms want open, honest, long-term relationships with big business, banks and the public sector. In our Business Ethics Pledge, we’re calling on government and big business to help us achieve this by promoting responsible business in the UK. Find out more at www.fpb.org/businessethics.
Have you been affected by bad business practice? Enter a firm into our business ethics Hall of Shame at www.fpb.org/hallofshame.
www.fpb.org
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Key dates & events to be aware of in the small business calendar
General election
7th May
State opening of parliament
27th May
Auto enrolment for businesses with up to 30 staff (certain PAYE refs)
1st June
Health & safety week
15th-19th June
Stay safe Did you know? Failure to comply with health and safety legislation can lead to an investigation and fines averaging £28,301*. We can provide you with health and safety expertise that you can rely on, with step-by-step guidance to ensure that you are not only legally compliant but are also providing a safe working environment for your employees and customers. It’s all covered as part of our comprehensive Practical Health and Safety package, designed to give you peace of mind when it comes to health and safety matters in your business.
With checklists, flowcharts and templates of key documents, including risk and fire risk assessments, it will form the basis of health and safety compliance in your business. The latest Health and Safety Guide is now available and will be delivered to subscribers soon. Don’t risk a heavy fine; call us now to subscribe 0845 130 1722.
*HSE
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