Working Theory

by Michael Reed


I do employment law for the Free Representation Unit.


michael at


Stress and the small employer

13 June 2012

One of the things people say when they talk about employment rights is that dealing with employees, their rights and the possibility of tribunal claims causes employers a lot of stress, especially in small businesses, and that this needs to be stopped.

The was a point made several times in the 2nd reading of the Enterprise and Regulatory Reform Bill.1

Dealing with difficult employment situations, and tribunal claims in particular, is indeed very stressful. I’ve seen a lot of Respondents who were clearly finding the whole process miserable.2 It does all soak up time, money and energy.

But I do think there is something slightly odd about the implicit assumption that something that causes employers stress must be a terrible, unacceptable thing that requires immediate drastic action.3

Running a business is a stressful thing to do. It just is. All sorts of things are going to cause you stress: your customers, your competition, your bank manager, Her Majesties Revenue and Customs, and so on.

I think most employers would feel fairly silly complaining to their MP about that having to keep up with their competition made them stressed. I’m not quite sure why stress caused by employees and employment law should be regarded as such a different thing.

The fact is, deciding to run your own business is a trade-off. There are plenty of good points. You get to be your own boss, with all the freedom that implies, you get to build something that you can be proud of and you probably hope to make more money than most employees in the same line of work. The downside is that you’re probably going to take on much more risk, responsibility and stress. Part of that is that you will probably have to manage employees and some of that will be difficult. Sometimes it will be difficult because one or more of your employees is being unreasonable, but that is one of the risks you have to accept.

People can argue about whether the current system of employment law and employment tribunals causes employers too much stress, either because the balance of employee rights vs employer rights is askew or just because the system is bad for both employers and employees.

But I think managing employees would be difficult, even if we abolished all employment law tomorrow. An under performing or misbehaving employee isn’t going to be an easy situation to cope with, even if there is nothing in the law to prevent you sacking them on the spot. And there are whole swathes of employee management – selecting good people, training them, helping them work as a team – that are only vaguely related to employment law anyway.

And, if we’re going to have any sort of system of employment rights and protection, that is almost certainly going to cause employers additional stress of some sort. It would probably be less stressful dealing with your employees, if you knew you could sack them at any time for any reason.4 On the other hand, it would be quite a lot more stressful for the employees. A balance has to be struck.

We then get into arguments about where the right balance is, and there reasonable people can disagree. Discussion needs to begin, though, with the recognition that there is no perfect solution where all employees and employers are all going to be completely relaxed, all of the time.

  1. HC Deb 11 June 2012, vol 546, cols 64–133 

  2. Although I have to say, I’ve rarely encountered a Claimant who was having a barrel of laughs either. 

  3. It’s noticeable that many of the MPs who were concerned that employment rights cause too much stress for business felt the Bill did not go far enough. 

  4. Although it might not be. In part, individual employment rights like unfair dismissal came about as an alternative to employees taking widespread industrial action in response to individual disputes. Removing that safety-valve might have unexpected consequences of all sorts – some of which might cause quite a lot more stress than the existing system. 

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