How to be a model employer while protecting your interests

Kelvin_TayTNAs a business owner, you want to nurture a team that is open, trustworthy and reliable, but it is also important to have systems which safeguard your business, argues Kelvin Tay.

As a business owner, you want to nurture a team that is open, trustworthy and reliable, but it is also important to have systems which safeguard your business, argues Kelvin Tay.

As your business grows it is worth giving careful thought to how funds and confidential information are being managed and circulated among your personnel. In the past year, a number of businesses have had to seek legal advice because of matters related to their own employees. These included:

  • Making an interlocutory injunction application in court against a newly established business and ex-employees to restrain them from using and disclosing confidential information (possessed without consent) and approaching customers of their former employer.
  • Advising a business on remedies available after losing substantial funds, siphoned out by its own employee.
  • Addressing concerns of potential loss and exposure of confidential information and intellectual know-how to competitors after departure of employees.

These scenarios revolve around two aspects – company funds and confidential information (which includes customer information, financials, business plans and intellectual property). Such situations can create undesirable stress for any business owner and also impinge negatively on the company's operations and morale, translating into lost time and revenue.Kelvin_TayLG

Obviously, not all employees are dishonest. However, in order to reduce the risk of loss to your business, you can implement some simple safeguards. The ideal is to mitigate risks without being overbearing or tyrannical towards your employees. The challenge is to cultivate a positive work environment, striking a balance between building relationships with staff and implementing safeguards in a prudent and sensitive manner. Here are some processes that can be implemented in the early stages of a business.

Clear role descriptions
It is not uncommon to have employees juggle multiple tasks and responsibilities. Spell out those responsibilities and roles to avoid uncertainty, so that tasks are performed by the appropriately authorised person. This will hopefully avoid unwanted variations of roles and promote accountability. It also inspires confidence and certainty when employees understand their role within the organisation.


Employment agreements and policies
Rather than just being a strict list of things not to do, employment agreements and policies can be a helpful tool to guide and inform employees (and employers) of their duties. Employment agreements and policies should detail employer and employee obligations. They should address the employee's ongoing duty to protect confidential information and applicable restraints.


In addition to introducing agreements and policies in writing, you should consider introducing simple protocols that can be implemented in the day to day routine of the business without too much difficulty. For example, whenever a cheque is to be rendered from an office account, it should be a requirement that the cheque is sighted and signed off by two directors or owners, or an owner and an authorised senior executive.


Data protection
Re-examine how data is being stored and shared. Technology today has made it very easy to store and disseminate information both internally and externally. This means you need a higher level of vigilance to manage and protect your confidential information. Consider assigning access to specific employees as required. For example, not every employee necessarily requires access to all information pertaining to finances or business plans.


Email and remote access
You should ensure that all business-related communication is done through your own email system. Set up a reliable email system and ensure that you have the means to address system breakdowns immediately to avoid employees having to resort to using an alternative email address.

Finally, going on vacation is always warranted and well deserved by busy business owners. However, it is also worth having remote access to office emails to check on communication during your absence.

Kelvin Tay is a solicitor in the corporate and dispute resolution team at Colin Biggers & Paisley.

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