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

Why job boards are only part of the recruitment picture Laura Leyland

Why job boards are only part of the recruitment picture

09 Oct 2026

2

Forbes and Barclays back as Red Rose Awards headline sponsors Red Rose Awards

Forbes and Barclays back as Red Rose Awards headline sponsors

09 Oct 2026

3

Chiptech appoints managing director Paul Shead Chiptech Uk Managing Director And David Hammond Chiptech Europe Ceo

Chiptech appoints managing director

09 Oct 2026

4

EG On The Move makes further French acquisitions Imo Lavage French Network Photo 1

EG On The Move makes further French acquisitions

09 Oct 2026

5

Trident Utilities strengthens team with two appointments Trident New Starters Madeleine And Alex

Trident Utilities strengthens team with two appointments

08 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
All In One Network
LBV Website Events GraphicAll In One Network 15 Oct 2026

All In One Network

The Leisure Box, Northlight, Glen Way, Brierfield , BB9 5NH

14:00 - 16:00

Sub36 Awards 2026
Sub36 WW Logo720 16 Oct 2026

Sub36 Awards 2026

Park Hall Hotel & Spa, Chorley, PR7 5LP

18:30 - 00:30

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

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

Blackburn Darwen Youth Zone Annual Quiz
BDYZ Quiz 15 Oct 2026

Blackburn Darwen Youth Zone Annual Quiz

Accrington Stanley FC, Accrington, BB5 5BX

17:00 - 13:46

The Business Network Central and East Lancashire
LBV Website Events GraphicBusiness Network 2 15 Oct 2026 - 15 Oct 2026

The Business Network Central and East Lancashire

Mytton Fold, Langho, BB6 8AB

11:30 - 14:15

Seriun Cyber Security Conference
Seriun 15 Oct 2026

Seriun Cyber Security Conference

Turf Moor, Burnley, BB10 4BX.

09:00 - 13:30

Preston Tech Connection Coworking Day
PTC Coworking Day long banner Oct.png.png 15 Oct 2026

Preston Tech Connection Coworking Day

Society1, 9-10 Cross Street, Preston, PR1 3LT

09:00 - 17:00

Chamber Business Lunch with Leanne Lucas, Founder of Let’s Be Blunt CIC
Lancaster And Morecambe Logo 1 16 Oct 2026

Chamber Business Lunch with Leanne Lucas, Founder of Let’s Be Blunt CIC

Lancaster Golf Club, Lancaster, LA2 0AJ

11:00 - 14:00

Building Brands (and workplaces) That Are Accessible For Everyone
Wyqfi3-wowjag-heczop.jpg.jpg 16 Oct 2026

Building Brands (and workplaces) That Are Accessible For Everyone

Neuro Spark Training Solutions, Burnley , BB11 2AS

09:30 - 16:00

St Catherine's Skydive, October
Skydive 17 Oct 2026

St Catherine's Skydive, October

Black Knight Parachute Centre, Lancaster, LA2 0DY

09:00 - 17:00

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