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

Driving your business forward with electric Linz Pic 2

Driving your business forward with electric

30 Oct 2026

2

Lancashire businesses react to Autumn Budget UK Parliament

Lancashire businesses react to Autumn Budget

30 Oct 2026

3

Council shake-up decision early next year County Hall Gates

Council shake-up decision early next year

29 Oct 2026

4

Mayoral authority pathway for Lancashire revealed County Hall in Lancashire

Mayoral authority pathway for Lancashire revealed

28 Oct 2026

5

Healey looks to deliver ‘breathing space’ Johnhealeyofficialcabinetportraitjuly2024cropped2

Healey looks to deliver ‘breathing space’

28 Oct 2026

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
LBV131 November/December Magazine Networking Event
LBV131 Magazine Launch Social720No Text 19 Nov 2026

LBV131 November/December Magazine Networking Event

The Landmark, School Lane, Burnley, BB11 1UF

08:30 - 10:30

Lancashire Business Day 2026
LBD26 WW Logo720 27 Nov 2026

Lancashire Business Day 2026

Burnley Football Club, BB10 4BX

12:00 - 17:00

Sub36 Reunion & Networking
03 Dec 2026

Sub36 Reunion & Networking

Burnley Football Club, BB10 4BX

15:00 - 17:00

Lancashire Net Zero Conference 2027
NZC27 Social 1200x800Generic 11 Feb 2027

Lancashire Net Zero Conference 2027

The Wellbeing Farm, Edgworth, Wheatsheaf Hill Farm, Plantation Road, BL7 0BY

09:30 - 02:00

Help to Grow: Management Course
Help To Grow 25 Sep 2026 - 15 Dec 2026

Help to Grow: Management Course

University of Lancashire, Preston, PR1 2HE

09:30 - 12:00

Chamber Breakfast Networking – November
Lancaster And Morecambe Logo 1 03 Nov 2026

Chamber Breakfast Networking – November

Porsche Centre South Lakes, Carnforth, LA6 1FW

08:30 - 10:30

Funding Unlocked
IMG_3058.jpeg.jpg 04 Nov 2026

Funding Unlocked

Accrington Stanley FC, Accrington , BB5 5BX

10:00 - 12:30

Clubhouse Business Network sponsored by Orca Finance - November 2026
Club House Padel 05 Nov 2026

Clubhouse Business Network sponsored by Orca Finance - November 2026

Clubhouse, Blackburn, BB1 3NT

14:00 - 16:00

Napthens' Cumbria Clay Shoot - for Penny Conservation Charity
N123_1200x400px_Title&Subtitle (1).png.png 12 Nov 2026

Napthens' Cumbria Clay Shoot - for Penny Conservation Charity

Leighton Hall Estate Storrs Lane, Carnforth, LA5 9ST

09:00 - 16:00

The Business Network Central and East Lancashire
12 Nov 2026

The Business Network Central and East Lancashire

Longridge House, Preston, PR3 2TB

11:30 - 14:15

Lancaster District Business Support Expo
Logo.jpg.jpg 18 Nov 2026 - 18 Nov 2026

Lancaster District Business Support Expo

The Platform, Morecambe, LA4 4DB

09:00 - 13:00

Great Winter Pie & Pea Social
Logo.jpg.jpg 19 Nov 2026

Great Winter Pie & Pea Social

The Royal Hotel & Bar, Lancaster, LA1 1YD

17:30 - 20:00

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 LBV130 Online GraphicWebsite
Subscribe now

Weekly news bulletin