Crab Insight September 2020

Red Tape Busters Volume 7, Issue 12, Reassurance

Welcome to the September edition of Crab Insight

Our focus this month is on outsourcing. The business practice of engaging an external party to perform services or create goods that traditionally were done in-house by the company’s own employees. 

For example, a business may take the decision to outsource bookkeeping duties or the functions of human resource departments, such as payroll or recruitment, or health and safety activities as doing so may be more cost-effective than retaining an in-house specialist for each area or for a business owner trying to become an expert in each.

When used properly, outsourcing is an effective strategy to reduce expenses, and can even provide a business with a competitive advantage over rivals.

Whatever your outsourcing strategy you need to make sure that the company carrying out the work you require will not present additional risks to your business.

Claudia Crab’s September Focus

Claudia the Crimson Crab icon

To make sure you do everything possible not to get let down by someone else, do your diligence before selecting an outsourcing partner.

Robert Briggs – Compliance Director Crimson Crab

Outsourcing can be used to reduce labour costs, together with the cost of overheads, equipment, and technology.

Skill and knowledge gaps can be filled using third party experts.

Outsourcing may also be used to focus on the core aspects of the business, trusting the less critical operations to outside organisations.

On the downside, communication with the outside provider can be hard, and security threats can escalate when multiple parties access sensitive and personal data.


Top tip – A great starting point to find out where you are, is our Business MOT


F2 Business Huddle Online

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Friday 9 October 2020

12 noon to 2 pm

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F2 Business Huddle

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All the favourite features that you have come to know and love at the F2 Business Huddle – online

Reputation Advocates

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We love to receive feedback and it really helps us to improve our services for everyone.

Until next month look after your reputation!!

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Workers' Status

The Court of Appeal have decided that a plumber was a worker for the purposes of the Employment Rights Act 1996 and the Working Time Regulations 1998 as well as an employee within the extended meaning of the term in the Equality Act 2010. This was in spite of the plumber’s contract labelling him as an independent contractor.

There is significant interest in worker status at present, especially following the employment tribunal decisions in the Uber and CitySprint situations and in light of the ongoing Taylor review into modern working practices.

(Pimlico Plumbers Ltd and Mullins v Smith [2017] EWCA Civ 51)

Thinking of outsourcing : do your diligence!

This time of year many business owners look to outsourcing certain activities. This can be a great way of reducing the burden or growing the business.

On the other hand the wrong outsourcing partner can cause mayhem and add to the stress levels. Not an ideal solution!

To reduce the risk do some basic diligence:

  1. Do they have appropriate qualifications – this could be a recognised qualification or qualification by doing. In other words do they know what they are talking about?
  2. Are they experienced – have they done the work (or similar work) in the past and can you talk to a previous client about their experience?
  3. Do they comply with the relevant legislation – they need to know what laws apply to their business and be compliant with them. A great example is data protection. You don’t want to have an issue because your outsourcing partner doesn’t understand their responsibilities with your data!
  4. Are they insured for the work they will be doing for you – insurance is a safety net for you and may influence your bargaining position over rates!

The extent of the diligence you do clearly relates to the value of the contract but remember it is your reputation to lose!

If you are going to rely on recommendations from others, always ask yourself why the person is giving the recommendation. For example is it because:

  • they have experienced the service and found it to be satisfactory?
  • they know someone from a networking meeting?
  • they know someone from social media?
  • they are going to receive some form of payment for the introduction?

The rationale for the introduction is important to your decision making process.

If it helps Crimson Crab can carry out diligence on potential outsourcing partners read more…

Our Reputation Advocates have been checked against the membership criteria, so that some of the diligence legwork has been done for you. They also work to our Ethical Trading Policy and Code of Conduct to give added peace of mind. The directory of members is here.

My web designer makes sure that my website complies with the law, don't they?

It’s really important to remember that the responsibility is with the executives of the business e.g. the owner, partners or directors of a limited company.

It you are investigated by a regulator it really isn’t much of a defence to say “My web designer said it was OK” as the British Pregnancy Advice Service found out to its cost. Read more…

If other people produce or manage your website the buck ultimately stops with you.

Our Website MOT will disclose compliance vulnerabilities.

Our Data Protection MOT will help strengthen your approach to data management.

Do I need a written data protection policy?

It very much depends on what you do in your business.

If, for example, you process personal data on behalf of other businesses then it makes good sense. It demonstrates that you are aware of the legal requirements and that you take appropriate care of their data. This can help give confidence and reassure them that you are the right person to handle their data.

If you have employees it sets the scene and explains your thoughts on how personal data should be handled.

If you have any doubts about data protection then check out our Data Protection MOT, it may be just what you need?


The three top risks to reputation

After receiving a poor performance review, an employee takes to social media and speaks negatively about the organisation and its leaders, creating a dialogue around the organisation’s culture that goes viral…

A cybercriminal discovers a vulnerability in an organisation’s security system, steals the Social Security numbers of millions of its customers, and demands a ransom payment for the decryption key needed to recover the sensitive data…

A third-party vendor fails to follow regulations when handling client records and inadvertently releases sensitive customer information, resulting in negative media attention and a steep fine for the organisation…

Read more in the source article: Triple threat: How to handle three top risks to reputation | Compliance Week

Can I terminate the contract I have with a supplier who has not supplied what they said they would?

At law, the right to terminate a contract for breach arises if there is a substantial failure to perform.

Any defect in performance must attain a certain minimum degree of seriousness to entitle the injured party to terminate.

A failure in performance is substantial when it deprives the party of what they bargained for or when it goes to the root of the contract.

For less serious breaches, a right to damages may arise, but not a right to terminate.