Supporting insolvency practitioners through turbulent times

Men and women sitting in circle supporting each other

As an insolvency practitioner, navigating those tricky, high risk, cases, can often take a toll on your, and your employee’s, mental health.

By definition, your work requires the ability to balance various duties and handle pressure from concerned creditors, anxious or unhelpful directors, and distressed employees. It can be a distressed and distressing environment in which to work.

Amidst the current cost of living crisis, not to mention the impact of the global pandemic, it’s never been more important to shine a spotlight on mental health. As it can impact you, your business, and the businesses you support in many ways:

increased rates of long-term sickness,
lower morale,
lower productivity,
higher staff turnover, and
increased issues with attracting and retaining talent.

As a defacto employer, you may want to give consideration to supporting a workforce with their mental health and wellbeing through solutions such as;

employee assistance programmes
digital mental health training programmes
financial education.

You’re not alone

If you’re a sole insolvency practitioner, looking after your own mental health can seem a little more complex.

Whilst your sole employment offers purpose and freedom, it carries additional stresses, instability and isolation. It can sometimes be difficult to recognise how work affects your mental health, so checking in with yourself on a regular basis is a good idea. Explore Mind’s support page to get access to tools and the assistance you need.

Take care if tough decisions lie ahead

Redundancy, with all of its associations of uncertainty and anxiety, is a word that employees dread. So being the person initiating redundancies in a distressed business is never pleasant, and being on the receiving end of any abuse will only further add to your stress.

Here’s some steps you can take to protect yourself while dealing with their employer’s insolvency.

Defending against the fallout following redundancies

There are strict rules on consulting staff facing redundancy. Employers must follow the letter of the law in this area or they may be subject to an employment practices liability (EPL) claim(s) related to unfair dismissal. This can lead to a costly, time consuming and disruptive legal process, as well as negative publicity, particularly on social media.

Risks associated with redundancy

Employment and workplace relations are governed by complex and rapidly changing laws and regulations. Standard policies, procedures and training are not always enough to protect employers from employment-related litigation. The removal of Employment Tribunal fees in 2017 has also made it much easier for employees to bring a claim and there has been a sharp escalation of claims against employers ever since.¹

Businesses of any size can find themselves entangled in an employment-related claim; every business with employees has an exposure. Directors, senior executives and officers can also find themselves exposed to potential litigation from staff following redundancy.

Defending against claims of unfair dismissal

Many SMEs in particular do not have the same breadth or depth in terms of resources available to larger companies. While HR departments often specialise in dealing with redundancy matters; there is a limit to the intervention and support they can offer. If we are to see an increase in the number of claims relating to unfair dismissal in 2023, such an environment means that insurance solutions will become imperative.

Key takeaway

Employees are one of the most important assets a business has, but they also pose one of the greatest sources of risk. Regardless of the size of your business, value-driven employee wellbeing can improve business resilience, organisational growth and create engaged, loyal and productive talent in your workforce. So be intentional, keep it personal, make it easy and where possible, look to the long-term.

When it comes to employment practice liability (EPL) claims, standard policies, procedures, and supervisory training are no longer enough to protect companies from the high costs of employment litigation, and so a transfer of this risk to insurance should be considered.

What can you do?

Speak to your local Marsh contact for more information and a range of solutions.

Sources:

aig.co.uk/employment-practice-liability

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