Family businesses: Getting relationships right

In family-owned businesses, the nature of the employment relationship is often agreed on an informal basis and the implementation of contracts of employments, directors service agreements and staff handbooks are overlooked, to the detriment of the business.

Situations can arise where one family member is looking to remove another due to a breakdown in the family relationship, an act of misconduct, or an issue with poor performance, so it is important to have these documents in place.

In addition, care should be taken to avoid special treatment. Family members must follow the same policies and procedures, usually set out in the staff handbook, as others, including standards of conduct, absenteeism and claiming expenses.

Inconsistent treatment could result in claims of discrimination or constructive dismissal if, for example, a non-family member is subjected to a disciplinary sanction more severe than a family member.

When hiring or promoting, employers should select the most qualified individual for the position, regardless of family status. A fair recruitment policy should be drafted and followed.

A family member’s role and all other workers’ roles should be set out in job descriptions where responsibilities should be clearly defined, which is likely to reduce conflict. Just because an employee happens to be the business owner’s sister, for example, may not mean she has the authority to appoint or dismiss staff.

All employees should undergo the same performance process. The business and the family member will benefit from honest feedback about areas for improvement and strengths. Where possible, include input from non-family members to limit the perception of bias.

Enjoyed this? Read more from Sally Eastwood, Farleys

Latest news

1

Inspired plc acquired by HGGC Inspired logo

Inspired plc acquired by HGGC

19 Aug 2025

2

Lancashire uniform provider acquired in £12.5m deal Trutex images

Lancashire uniform provider acquired in £12.5m deal

19 Aug 2025

3

Burnley aircraft firm sees profits soar Safran Nacelles

Burnley aircraft firm sees profits soar

19 Aug 2025

4

Lancashire marina bought by Aquavista Fettlers Wharf Marina

Lancashire marina bought by Aquavista

18 Aug 2025

5

Work starts on new business units at Enterprise Zone Danny Pinkus Cllr Mark Smith and Robert Pinkus at Phase Two Of Enterprise Court

Work starts on new business units at Enterprise Zone

15 Aug 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
Sub36 Networking - Follow the signs
Sub36 Deaf Village Social1200
Networking
17 Sep 2025

Sub36 Networking - Follow the signs

The Deaf Village, Blackburn, BB2 5EN

10:00 - 12:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

The Business Network Central & East Lancashire
LBV Header (24).png.png
LBV Hub Networking
21 Aug 2025 - 21 Aug 2025

The Business Network Central & East Lancashire

Mytton Fold, Langho, BB6 8AB

11:30 - 14:15

Morecambe Bay Walk
Walk.jpg.jpg
LBV Hub Awards
30 Aug 2025 - 30 Aug 2025

Morecambe Bay Walk

Arnside, CARNFORTH, LA5

09:30 - 14:00

Tri-Site Survey Equipment Showcase
Linkedin Cover.jpg.jpg
LBV Hub Seminars
03 Sep 2025 - 03 Sep 2025

Tri-Site Survey Equipment Showcase

Harewood House , Leeds, LS17 9LG

09:30 - 16:00

Longridge Soap Box Derby
Screenshot 2025-06-10 090035.png.png
LBV Hub Fundraisers
14 Sep 2025 - 14 Sep 2025

Longridge Soap Box Derby

Berry Lane, Longridge, PR3 3WH

10:00 - 16:30

Preston Tech Connection - The Ultimate Tech Quiz!
Preston Tech Connection Sept 25.png.png
LBV Hub Networking
16 Sep 2025 - 16 Sep 2025

Preston Tech Connection - The Ultimate Tech Quiz!

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 19:00

Cumbria Business Expo 2025
https---cdn.evbuc.com-images-880461633-4862066883-1-original.20241022-110415.jpeg.jpg
LBV Hub Exhibitions
19 Sep 2025 - 19 Sep 2025

Cumbria Business Expo 2025

Carlisle Racecourse, Carlisle, CA2 4TS

09:00 - 15:00

Preston Freelancer Meet-Up: September
Sept Freelancer (1).png.png
LBV Hub Networking
23 Sep 2025 - 23 Sep 2025

Preston Freelancer Meet-Up: September

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

Speed Networking with BNI
2.png.png
LBV Hub Networking
24 Sep 2025 - 24 Sep 2025

Speed Networking with BNI

Chorley Football Club, Chorley, PR7 3DU

16:00 - 19:00

Help to grow management course
Help to grow - barriers to growth.png.png
LBV Hub Seminars
26 Sep 2025 - 16 Dec 2025

Help to grow management course

Preston Campus , Preston , PR1 2HE

09:00 - 15:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV 123 Online Graphic
Subscribe now

Weekly news bulletin