Small businesses: dealing with train delays and staff shortages

David Prosser looks into what small firms can do about persistently late workers.


It's not just commuters who suffer small businesses do too
(Image credit: Credit: Lee Thomas / Alamy Stock Photo)

What can small firms do about persistently late workers?

As delays on the railways continue into the summer after the botched introduction of new timetables, the focus has understandably been on the plight of passengers. But the crisis also has a significant impact on employers, with staff routinely arriving late for work, or even unable to get there at all. For small and medium-sized enterprises (SMEs), this can have a disproportionately damaging effect.

However, while all the train companies at least have policies in place to compensate passengers inconvenienced by disruption, no such help is in place for their employers. If, say, you run a caf that opens two hours late or you are struggling to get products out to customers on time because of employees' persistent lateness, there is no right of redress.

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Employers should know their rights too

This puts employers in a very difficult position. You are allowed to try to recoup some of your losses from your staff, even where their lateness clearly isn't their fault, but the financial arguments for doing so may be outweighed by the potential hit to morale. Still, the law is clear on employers' rights. Unless your employees' contracts say otherwise, you don't have to pay them for the time they've missed from work because they're late. You can also insist they make up this time if they want to receive full pay. Similarly, if staff can't make it into the office at all, employers may demand that the day is taken as unpaid leave. Alternatively, you could ask them whether they want the day off as paid holiday, but you can only insist on this if you give them proper notice by law, this is at least two days for every day off.

Bear in mind too that while you must give reasonable consideration to staff requests for flexible working, that doesn't mean you always have to accept them. If your employees want to start later or work from home to get around rail delays, say, it may be in your interests to let them do so; but they don't have an automatic right to different working arrangements, which won't always be practical for you. Ultimately, employers are entitled to dismiss staff who persistently arrive late for work, as long as they only do so after following the disciplinary process set out in employees' contracts. This may sound callous given the problems on the railways aren't of your staff's making, but SMEs dependent on their employees to stay open and profitable can only afford so much goodwill.

In practice, most SMEs will do their best to help staff through a difficult period. But if the problems on the railways persist and some think they will last for months businesses that are adversely affected need to consider their options. In the absence of any means to seek redress from the organisations responsible, they may need to take tough action to protect the business, and all its employees.

Fraud probe is taking too long

Lloyds Banking Group is facing calls to speed up the pace of an investigation into a scam at its subsidiary HBOS resulting in the collapse of hundreds of the bank's small and medium-sized business customers.

The bank has commissioned an independent review of the affair at the Reading branch of HBOS, for which six people were convicted last year. The fraud, which took place between 2002 and 2007, involved bankers pressuring customers to take on a firm of shady turnaround consultants, with many companies consequently getting stuck with towering debts and eventually being asset-stripped. Although the chair of the review was nominated 14 months ago, Lloyds expects the inquiry to take a further 12 to 18 months.This is "disappointing", say MPs sitting on the Treasury Select Committee. They have, however, welcomed the offer for them to receive an unredacted copy of the report, which may result in it being made public.

Although the fraud took place before Lloyds bought HBOS in 2009, it has already set aside £100m to compensate victims of the fraud. While more than half of those affected have already accepted payouts, some victims have complained that Lloyds has not been fair with them and that compensation should be much more generous.

David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.