Small businesses across Boston and Lincolnshire are being warned that they face the highest exposure to employment tribunal claims this year, as expanded employee rights and tighter regulations increase the risk of costly disputes.
Local HR consultant Katharine Nundy, who runs The HR Branch Ltd, says that smaller employers are disproportionately affected because they are more likely to rely on informal management, less likely to have updated policies and rarely have access to in-house legal support.
"Most tribunal claims don't come from employers acting in bad faith," Katharine said. "They come from well-intentioned decisions that weren't documented, weren't handled consistently or were left unresolved for too long. That's exactly how most small businesses operate day to day."
With the updated Employment Rights Act now in effect, employees have broader protections and more grounds on which to raise formal complaints. Katharine warns that this shift, combined with informal management styles, creates gaps that tribunal claims fall through.
"When you don't have a dedicated HR function, issues get missed," Katharine explained. "A grievance goes unacknowledged. A flexible working request gets turned down without a valid reason. A performance conversation happens verbally and nobody writes it down. Each one of those is a potential claim."
According to Katharine, the financial impact of a tribunal claim hits smaller businesses hardest. Legal costs, management time and operational disruption all land on fewer people, and the reputational damage can be difficult to recover from.
"A larger business can absorb a claim. For an SME, it can consume months of leadership time, cost thousands in legal fees and damage the employer brand you've worked hard to build."
To help local business owners to reduce their exposure, The HR Branch recommends five practical steps:
1. Train managers on key employment law responsibilities so that they can recognise issues early and respond appropriately.
2. Review and update policies to reflect the changes under the Employment Rights Act and make sure that employees can access them.
3. Identify grievances early and deal with them through mediation or a formal process before they escalate.
4. Document decisions consistently, including performance conversations, flexible working responses and sickness management.
5. Audit exit interviews and employee feedback to spot patterns that could signal future claims.
"You won't eliminate claims entirely, but you can dramatically reduce the ones that come from avoidable mistakes, delayed decisions or gaps in your processes," Katharine added.
To support local employers, The HR Branch works with small businesses to assess their current exposure to employment risks and identify where practical changes can make the biggest difference.
Contact us today to see how we can support your business.
The HR Branch was established in 2020 and works with small businesses in Lincolnshire and across the UK, providing practical HR advice, compliance support and proactive people management.
