What you Need to Know About Competition Law

Competition law promotes or seeks to maintain market competition by regulating anti-competitive conduct amongst companies. Any company that fails to comply with UK or EU competition law will meet with serious consequences.

In April 2014, the UK Office of Fair Trading and the Competition Commission merged to form the new Competition and Markets Authority (CMA). Since then, any business operating in the UK has been subject to a more robust level of enforcement of the rules, including increased fines and more criminal prosecutions where relevant.

Every business, regardless of is size, industry sector or legal status, must make itself aware of how competition law works so that its obligations can be met and fines and prosecutions therefore avoided, and on the other side of the coin, so that it can protect its market position.

There are two sets of competition rules in operation in the UK and they run concurrently. One concerns UK-wide trade and this is covered by the Competition Act 1998 and the Enterprise Act 2002. For anti-competitive behaviour that extends outside of the UK to other EU Member States, this is covered by Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU).

What is Prohibited?

Both UK and EU competition law prohibit two key types of anti-competitive behaviour. This includes anti-competitive agreements, and abuse of a dominant market position.

Agreements, arrangements and business practices which prevent, restrict or distort competition or aim to, and which affect or may affect trade in the UK or EU will be considered a breach of the legislation.

What are the Consequences of a Breach?

Companies in breach of anti-competition law can face fines of up to 10 per cent of group global turnover. Companies will also expose themselves to possible actions for damages and may also find their agreements unenforceable. Directors could face disqualification or criminal sanctions if the breaches are serious.

The new Consumer Rights Act 2015 provides that businesses that find themselves at a competitive disadvantage from breaches in competition law will be offered swift, low-cost remedies.

Suffice it to say, all businesses must make themselves fully aware of the provisions of competition law. Your bookkeepers will be able to explain the fundamentals, and your lawyers will help you word your agreements in such a way that they comply with the law.

How Employee Referral Schemes Could Help you Find the Right Staff

If like a significant number of employers you find it a challenge to source the right calibre of personnel for your business and have exhausted all the traditional avenues such as advertising, recruitment consultants and social media, there is another initiative you may wish to try.

Employee Referral Schemes have become increasingly popular UK-wide and, says the Institute of Personnel and Development, 47% of UK companies run them.

How Employee Referral Schemes Work

The schemes work by encouraging employees to refer potential candidates for vacancies. In exchange for a successful introduction, they are rewarded either with a financial bonus, or other benefits such as additional holiday.

One of the key benefits of Employee Referral Schemes is that they are less costly than traditional recruitment methods. Additionally, employers tend to find that new team members recruited through this avenue will be especially motivated to perform to the very best of their ability as they will be mindful of how this will reflect on the person who referred them.

Advantages & Disadvantages

And then there’s the fact that new recruits that join a business through employee referral are likely to need a shorter settling in period because they already know some of the existing team.

When an existing employee discusses a referral with a potential candidate, they are always going to give them an honest view of the company that could become their employer. This will start the new recruit off on a good footing as their expectations will be realistic.

So far so good but, as with anything, there will be disadvantages. Firstly you have to consider what would happen if things do not work out with the new employee, and how that would affect the relationship between you as the employer and the referring member of staff. Employee Referral Schemes can also limit the flow of fresh ideas into the business because referrers and referees will tend to be like-minded.

What Makes a Good Scheme?

The best Employee Referral Schemes are well thought through so they catch employees’ attention. Finding out what employees really want in return for referrals is essential: Cash? Days off? Gift vouchers? Of course what you offer needs to be cost effective.

Keeping the scheme simple is also important. If it’s not understood, employees won’t engage with it. You’ll also want to keep its administration straightforward too so that it doesn’t drain your resources.

So you have your scheme, now you need to tell your staff about it. The more reminders they have, the better. So aside from an initial email, fix posters in the kitchen, by the water cooler and anywhere else they tend to gather. Encourage them to use their social platforms to network any vacancies. LinkedIn is probably the most effective, but Facebook and Twitter can be just as good.

And finally, once there has been a successful referral, make sure everyone knows about it. This will serve to inspire others to do the same.

If you’ve been thinking about introducing an Employee Referral Scheme into your business and would like to discuss in more detail how it would work in practice, why not approach your local bookkeepers for advice?

How to Guard Your Small Business Against a Cyber Attack

The very recent major website cyber breach suffered by TalkTalk has left businesses exceptionally worried. And with the increasing use of the cloud to store confidential data and information, it is no wonder.

Whilst it seems the larger companies appear to be the key targets for cyber criminals, the fact is, the threat extends to companies of all sizes, including the smaller business.

Unfortunately, small businesses tend to lack the resources and policies that are designed to defend against such attacks. Yet because they are increasingly using cloud based services, they still face the same level of risk as larger companies.

So what to do? You need to focus on minimising your vulnerabilities, and implement policies and initiatives that are rolled out throughout the business, including to any remote workers.

Start with Email

By encrypting emails and other communications, you force potential hackers into a fight against a secondary layer of security. Generally they won’t bother, preferring to move on to an easier target.

Be Strict with Password Policies

Set a companywide policy on passwords and ensure everyone who uses technology is trained. Introduce them to smart passwords that contain unusual characters and a combination of letters and numbers. NEVER use any passwords that can be associated with a user such as dates of birth and always vary passwords across different platforms. Needless to say, passwords should NEVER be written down. It is important to keep check of passwords so that you are in full control so think about using a management platform such as LastPass, PassPack or 1Password.

You may also further strengthen security by using a dual layer password system where possible, so that users have to enter a second set of characters in order to login. Wherever available, enable these features.

Be Aware of and Train on Warning Signs

Make sure that each and every member of staff is trained to identify potential cyber threats such as bogus emails or phishing scams. Email providers are getting better and better at detecting dubious emails, but some still find their way past the junk folder. Train staff to be on their guard for emails that ask them to click on a link to verify their account details, or enter bank or credit card information. They should be wary of suspicious looking attachments, in particular zipped up files that could contain malicious software. And emails filled with bad spelling are a big warning sign too.

Make sure these emails are never opened or actioned and that all bogus emails are reported as spam. The domain can also be blacklisted from your email settings. It is well worth considering using an email scanning system such as Avast or AVG. 

Choose a Robust Firewall

It is imperative that every device, including PCs, laptops, tablets and mobiles, is installed with firewall and anti-malware and spyware software so that any potential threats can be quarantined and deleted before they turn into a problem.

Don’t forget that hackers can get through mobile apps, and also telephone systems through tollfraud, which is something we’ve covered previously.