Good employers lose tribunal claims too. Here's how to not
Most claims against small businesses don't come from bad employers. They come from decent ones who did the right thing the wrong way.
By Robert Festenstein, Head of Legal
Updated 18 June 2026
7 min read
The short version
- Employees and workers are entitled to written main terms on or before day one.
- A small core of clear policies prevents most day-to-day problems.
- A fair, documented process is what protects you when you have to act — not being 'right'.
- Exits are where the risk concentrates. Rush one and it costs you.
Contracts and written terms
Every employee and worker is entitled to a written statement of the main terms on or before their first day. That's the legal floor. A proper employment contract does far more — it nails down notice, confidentiality, who owns the work they create, and (where it matters) whether they can walk out and take your clients with them. Sorting that at the point of hiring is easy. Trying to impose it after someone's already in post is a battle.
The policies you actually need
You don't need a filing cabinet of policies. You need a small core that earns its keep: a disciplinary and grievance procedure so problems get handled consistently, and clear positions on sickness, holiday and equality. This isn't box-ticking. When something goes wrong, a policy you actually followed is often the difference between a defensible decision and an expensive one.
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It's the process, not the decision
This is the single most important thing to understand about UK employment law, so I'll say it plainly: it's usually not what you decide that gets you into trouble — it's how. You can have a rock-solid reason to dismiss someone and still lose a claim because the process was unfair. Investigate properly. Hold the right meetings. Let the person put their side. Give them an appeal. Follow a fair process, write it down as you go, and even the hard decisions become defensible. The Acas Code is the benchmark to work to.
Where it gets expensive
When someone leaves — resignation, dismissal, redundancy, agreement — the exit is where the risk piles up. Redundancies need a genuine reason and a fair process. Agreed exits usually run through a settlement agreement, which has to meet strict legal requirements to actually bind. And there's a tax angle to exit payments that's easy to fumble — another reason to get advice before the money moves, not after.
Frequently asked questions
Do I have to give employees a written contract?
You must give employees and workers a written statement of the main terms on or before their first day. A full contract does far more — notice, confidentiality, IP, post-termination restrictions — so it's well worth having a proper one rather than the bare minimum.
Can I dismiss someone who isn't performing?
Often yes — but the process is what counts. A dismissal can be fair in substance and still unlawful if you skip the steps: investigation, meetings, a chance to respond, an appeal. Follow a fair, documented process in line with the Acas Code and you're on solid ground.
What's the most common mistake small employers make?
Acting before following a fair process. Good employers with genuine reasons still lose claims because they moved too fast or missed a step. Early advice on a tricky situation is a fraction of the cost of defending a claim.
Sources & further reading
This article is general information, not legal advice. The law changes and depends on your circumstances — always take advice on your specific situation before acting. Last reviewed 18 June 2026. Buzz Solicitors is a trading name of AD Solicitors Limited, a recognised body regulated by the SRA (no. 8011228).
A solicitor with more than two decades' experience in commercial law, dispute resolution, insolvency and judicial review. Robert acts for businesses, directors and individuals on the matters that carry real consequence — and leads Buzz Solicitors.
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