Edmonds Judd

business

Personal grievances

Commercial, Your Own Business
0

Employers must act in good faith

In today’s ever-changing employment landscape, employers face a myriad of challenges. A single misstep can lead to (amongst other things) personal grievance claims, a fractured workplace culture and tainted reputations. Understanding the risk of making a blunder is essential.

If one of your employees has a complaint about their employment, they can raise a personal grievance claim against you. The grounds for a grievance are almost limitless, but common grounds include complaints about being unfairly fired, discriminated against, bullied or disadvantaged in some way.

Employees have 90 days (or 12 months in the case of sexual harassment) to bring a grievance. This begins on the date that the action allegedly occurred or came to the notice of your employee, whichever is later.

As an employer, you can agree to a grievance being raised late or you may inadvertently do so by responding to it (i.e.: it has been raised out of time, but you mistakenly legitimised it by responding to it). The Employment Relations Authority (ERA) can allow a longer period, but only in exceptional circumstances and if it is just to do so.

Good faith

As an employer, you can reduce the risk of grievances by having a sound understanding of your responsibilities. The key is to always act in good faith. This means acting reasonably and honestly, and communicating well with your employees about anything that may affect their employment.

It is not always obvious, however, what good faith requires in practice. It often goes wrong if you want to end your employee’s employment. You must be able to point to good reasons for their dismissal and demonstrate that a fair process has been followed. If you trip up on either part, a successful grievance for unjustified dismissal can result.

All employers also have a range of statutory duties that must be followed, such as:

  • Providing safe work and a safe workplace
  • Paying the agreed wages or salary, and paying at least the minimum wage
  • Providing rest and meal breaks, and
  • Ensuring you provide minimum leave entitlements.

Consequences

The consequences of getting it wrong can be severe for a business. These include:

  • Legal costs
  • Time and cost of taking part in mediation and/or a hearing in the ERA (and a potential appeal)
  • Cost of settling a grievance, including being ordered to pay compensation, lost wages, legal costs or other monetary penalties by the ERA
  • Negative publicity and reputational damage, and
  • Disruption in your workplace, and negative impacts on your workplace culture.

Compensation awards have been trending upwards in recent years. In June 2023,[1] for example, the Employment Court awarded an employee $25,000 in compensation as well as three months’ lost wages following a successful unjustified dismissal claim.

An issue in that case was their employer had included Tikanga practices and values into its employment framework but failed to comply with them when undertaking its dismissal process. The court found the failure to do so was a breach of their employer’s good faith obligations.

However, it’s not just mistakes in dismissal processes that can lead to successful grievances. In a very recent case,[2] the ERA ordered an employer to pay $13,720 to their employee; they had failed to keep accurate leave records, pay proper holiday pay and a dispute had arisen over bereavement and other leave. Their employee was unjustifiably disadvantaged.

In another recent case,[3] an employee was awarded $105,000 in compensation for bullying, unjustified suspension and unjustified dismissal. Their employer was also ordered to pay more than $32,000 for lost wages and to pay a $1,000 penalty. Although this was at the high end of the compensation awards range, this case not only shows us what can happen when an employer gets it wrong, but also the range of potential awards the ERA can make and punishments that can be imposed on an employer.

Be proactive

All employers should navigate the risks of grievances by being proactive. If you are unsure about your workplace processes and/or have a potential personal grievance claim on the horizon, do talk with us early on. That is always better than the ambulance at the bottom of the cliff.

 

[1] GF v Comptroller of the New Zealand Customs Service [2023] NZEmpC 101 EMPC 317/2021.

[2] Stringer v McBride [2024] NZERA 59.

[3] Parker v Magnum Hire Ltd [2024] NZERA 85.

 

DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

Invoices not being paid on time?

Commercial, Your Own Business
0

A steer for debtors and creditors

The continued rise of input costs, finance costs, labour shortages, ongoing material shortages and compliance costs are forcing many businesses to tighten their belts. In this article we give some advice to assist both creditors and debtors with managing their business relationships and financial accounts when it comes to unpaid invoices.

Protecting your business from outstanding invoices

Terms of trade and contractual terms: Having robust terms of trade is one of the best ways your business can protect itself from bad debtors. Including clauses for default interest and the recovery of your legal costs means that you are less likely to be left out of pocket if you need to take action to recover an outstanding debt. You should also consider whether your business should take security over your customer’s personal property or land assets, or a guarantee (backed up by a security); these are highly recommended where substantial amounts are involved, or where a customer has few assets and/or extensive liabilities.

Invoicing discipline: Nobody likes getting one large invoice at the end of a contract; it also presents a risk in terms of cashflow if your debtor cannot pay you in full and on time.

Your business should regularly review its billing practices to improve the way it invoices. Do you require deposits? Can you issue interim invoices? Should you seek payment in advance and, if so, in full or in part? Are you invoicing in accordance with your industry’s best practice? And for businesses in the construction sector, are you issuing valid payment claims to take advantage of the construction contracts regime?

Accounting software is a lifesaver for businesses; it enables easy tracking of outstanding invoices and cashflow. Invoices and payments should be tracked promptly to give an accurate projection of cashflow and ensure no payments slip through the cracks. Ensuring your staff are trained in how to use your accounting software, and to report on cashflow, is just as important.

If you aren’t motivated to invoice work or chase payment in a timely manner, the chances are your customer won’t be motivated to pay on time. For creditors, invoicing your work promptly can assist in resolving issues before they arise. The longer you wait to invoice your work, the more likely your customer is to complain about receiving the invoice and it’s less likely they will have funds ready to pay the invoice by the due date.

Coordinating cashflow: Your business will rely on prompt payment from your customers to pay your own suppliers. If your business can’t afford to pay your suppliers’ invoices on time then it risks getting stung with penalties and default interest.

You should coordinate your business’s income and expenditure to reduce the risk of default. If, for example, your business has outgoing payments due on the 20th of each month then it would be sensible to require your invoices to be paid by the 15th of the month, or a certain number of days after the invoice is issued. You should also consider building up a business contingency fund to act as a buffer if your incoming invoices aren’t paid on time.

Why pay invoices on time?

Credit ratings: Missing or defaulting on invoice payments will adversely impact the credit score of your business and therefore its ability to obtain finance. Some lenders look back through years of financial reports to assess your ability to pay, so even if you don’t think you’ll need a good credit rating now, it is important to stay on top of your outstanding bills.

Business reputation: Businesses pride themselves on their reputation among customers – for quality work and/or friendly customer service. But they also need to have a good reputation in their industry. Consistently failing to pay bills on time may cause suppliers to stop working with you and, depending on your industry, word of mouth can travel fast.

Reputation is also important for creditors. If you have a reputation for litigiousness rather than acting in a reasonable manner, businesses may be hesitant to work with you. On the other side of the coin, if your business has a reputation for not chasing outstanding debts, then your customers may try to take advantage of you.

Compounding debts: The failure of many businesses can be attributable to having compounding debt – that is, invoices going unpaid for months while more invoices to be paid pile up. Having the discipline to be on top of debt by paying invoices regularly can help to keep your finances manageable and preserve your business relationships.

Disputes are costly: There is a range of legal methods available to creditors to enforce outstanding debts, including obtaining or enforcing a security interest over property, issuing a statutory demand or bankruptcy notice, or starting court proceedings (including liquidator appointments) against a debtor. Debt collection agencies might also be engaged.

Some methods (notably caveats and security interests) can have a detrimental effect on a debtor’s business operations. They can be a great bargaining chip for creditors, but potentially disastrous for debtors if enforcement of those interests is pursued. As well, a creditor’s terms of trade will often state that debt recovery costs will be borne by the debtor, so it is very much in the debtor’s interests to pay invoices on time to avoid costly legal disputes and disruption.

Be upfront: If you aren’t sure how much a job is going to cost, it is wise to ask for an estimate or quote before you enter into an agreement. If costs escalate during a contract (either from your supplier or for your customer) or you find yourself cash-strapped, it is generally best to talk with them early on about that too.

Negotiating a compromise with an element of commercial nous, such as a payment plan, rather than forcing disruptive cancellations or costly court proceedings is often a better outcome for both sides.

Possible reform

In 2023, the Business Payment Practices Act 2023 was passed that would have required large public and private entities to publish information about how long it takes them to pay their invoices and their payment terms.

The new government, however, has repealed the Act and will replace it with a voluntary code to ensure SMEs are paid in a timely manner. While we are unlikely to see the effects of these changes for some months, the impact of large market players paying invoices on significantly extended payment terms appears to be front of mind for politicians. We are also likely to see improvements in the way public service entities pay their invoices, resulting in quicker payment times for suppliers. Businesses should be mindful of possible changes being implemented in the future.

Need a hand?

If you find yourself being pulled into a dispute or are unsure how to protect your business then it is always best to talk with us, whether it be in relation to developing or reviewing contractual documents, or with initiating or defending a claim for payment of money. Your accountant or financial planner will also be able to help with any cashflow issues or with advising how best to manage your finances.

 

DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

Bonding agreements

Your Own Business
0

Helping employers recoup training costs

Bonding agreements can be an incredibly useful tool for ensuring employers can recoup costs incurred for training staff.

Used improperly however, bonding agreements may be unenforceable and – in some circumstances – be a clear breach of the Wages Protection Act 1983 (WPA). We look at two of the most common issues with bonding agreements as well as what should be considered for enforceable agreements.

What is a bonding agreement?

A bonding agreement is a benefit given to an employee where you agree to pay for some or of the all the cost of further training in exchange for your employee agreeing to stay under your employment for a period of time; this is usually around one to two years after the training is complete. The result is an upskilled employee who has better qualifications and future employment prospects, and your business has the benefit of a more valuable employee who usually will stay for the period of the bonding agreement.

These arrangements can be recorded in the original employment agreement or in a subsequent document both the employer and employee sign which records the bonding agreement as a formal variation to the employment agreement that is already in place.

Wages Protection Act 1983

Section 12A of the WPA states that an employer may not ‘seek or receive any premium’ for employing a person. In a 2016 case[1], it was found that bonding employees to recoup recruitment costs, such as skills testing, was considered a breach of s12A as it was the employer who primarily benefitted, not the employee. Any bonding agreement for training, testing or costs incurred by the employer only would likely

be considered a breach of the WPA.

Workplace health and safety

All employers are responsible for ensuring that they provide a safe environment for their employees. For most businesses this means that, at a minimum, each workplace must have some staff trained in first aid. In more dangerous workplaces there must be additional measures, such as training employees in handling combustible materials or dangerous goods.

As an employer, if you have insufficient staff members trained in workplace safety and are required to provide training to up-skill existing staff in this area, it is unlikely that you could use a bonding agreement to recoup the cost of that training, as it is your responsibility to provide a safe workplace in the first instance. If any additional training goes above and beyond the requirement for safety, and significantly improves your employee’s future employability, a bond may be valid.

Making clauses work

There are many circumstances in which bonding agreements are appropriate and enforceable.

When considering a bonding agreement, the following three basic principles are a good guideline.

  1. Mutual benefit: the additional training being undertaken by your employee must be of a mutual benefit to you both. Another acceptable, but rare, situation is where the additional training is of sole benefit to your employee, such as up-skilling in a different field while continuing to work in the current role.
  2. Transparency of cost: costs should be agreed as much as possible up-front, including how and when those costs will be repaid if your employee leaves during the bonded term. If the costs cannot be recorded clearly in the agreement, for example accommodation costs while on training, your employee should be given reasonable notice of the cost before it is incurred and the opportunity to opt out or for you both to choose a cheaper alternative.
  3. Reasonability: the bonding term and repayment schedule should be reasonable in consideration of the costs incurred by the business. For the majority of bonding terms, a reasonable timeframe is somewhere between six months and two years, though there are certainly some circumstances where longer bonding terms are appropriate.

Like many elements of employment law, bonding agreements are very case specific. This means that in this article, we cannot cover all the issues that arise with them. Any issues in the workplace such as harassment or constructive dismissal can shake the foundation of a bonding agreement. Even when an agreement is considered enforceable, there is no guarantee you will be able to recover the funds from an employee who leaves your business.

If you are considering a bonding agreement, whether you are an employer or an employee, please contact us to discuss your specific needs.

[1] Labour Inspector v Tech 5 Recruitment Limited [2016] NZEmpC 167 EMPC 114/2016.

Business briefs

News
0

Unfair contract terms regime extended to small business contracts

The Fair Trading Amendment Act 2021, which was passed into law in August, bans unconscionable conduct in trade and prohibits businesses from having unfair contract terms in their small business contracts.

The Act amends the Fair Trading Act 1986 in two key ways.

  1. Unconscionable conduct: The legislation prohibits unconscionable conduct in trade. It does not define what ‘unconscionable conduct’ is, but it does provide a list of factors for the court to consider when assessing unconscionable conduct, including:
  • The relative bargaining power between the person engaging in the conduct and the person affected by the conduct
  • The extent to which the trader and an affected person acted in good faith, and
  • Whether unfair pressure or undue influence was used.
  1. Unfair contract terms: The Act extends the existing protections against unfair contract terms in standard form consumer contracts to include small business contracts.

The legislation defines this as a contract for the provision of goods or services between businesses where the value of the relationship between the businesses is less than $250,000 (including GST).

These two changes will come into force on 16 August 2022. This gives businesses just under one year to review their small business contracts to ensure they comply with the new requirements. The Commerce Commission is expected to release guidance on what unfair terms might look like for small business contracts.

Be aware, however, that some minor changes in the legislation are already in force.

If you would like some guidance on how this legislation affects your business, please feel free to contact us.

Many welcome new sick leave provisions

One employee’s sick leave may have doubled, but another employee’s sick leave may still only be five days. How does this work?

On 24 July 2021, minimum employee sick leave entitlements increased from five days to 10 days per year[1]. Key points for employers are below.

When does the entitlement start? Not all employees will get the increase in sick days at the same time. Employees will get an extra five days’ sick leave when they reach their next entitlement date. This is either after they reach six months’ employment or on their existing anniversary.

For example, if your employee’s anniversary date was 10 June, they become entitled to 10 days’ sick leave on 10 June 2022, but until then, their entitlement remains at five days.

What remains the same?

  • Employees who already get 10 or more sick days a year will not be affected by this change
  • The maximum amount of unused sick leave that an employee can be entitled to accrue remains at 20 days, and
  • The change applies to all employees whether they are full-time or part-time.

Remember, it’s your obligation as an employer to ensure you’re aware of your employees’ entitlements.

Changes to the retention money regime for construction contracts

The new Construction Contracts (Retention Money) Amendment Bill proposes to change the way contractors hold retention money under construction contracts.

The current regime allows contractors to mingle retention money with working capital, which can result in subcontractors missing out on money owed to them if the contractor goes into liquidation. This happened in the liquidation of Mainzeal Property and Construction Limited in 2013.

The proposed legislation aims to put clear rules in place around how retention money is to be held to provide protection for subcontractors.

Key changes: The Bill proposes that contractors must:

  • Place retention money on trust as soon as possible and keep it separate from other money or assets, and
  • Hold retention money in a trust account in a registered bank in New Zealand or in the form of complying instruments (such as an insurance policy or a guarantee).

The Select Committee is expected to report on the Bill in November 2021. Contractors will need to be prepared for the changes when the Bill passes, as failure to comply could result in significant fines.

[1] Holidays (Increasing Sick Leave) Amendment Act.

Climate Action Toolbox

News, Your Own Business
0

We all need to do our bit to reduce carbon emissions and look after the planet better than we have previously

In late March, the Climate Action Toolbox was launched in a major collaborative effort involving the Sustainable Business Network, a number of government agencies and some private sector businesses.

The Climate Change Commission had identified a need for tools to help smaller businesses take action on climate change. Its goal is to help businesses create a tailored step-by-step plan they can use to reduce emissions.

Many small to medium-sized businesses want to do their bit, but are unsure on how to start or what could make the most impact. The Climate Action Toolbox provides tailored advice and support around moving people, moving goods, office operations, site operations and equipment, and designing and making products.

Businesses can work through a self-assessment to identify which areas are relevant to them. Under each area you can choose from a range of specific actions to improve the climate impact of your business. Activities range from limiting non-essential travel, using heating and cooling options efficiently, buying sustainable products, recycling and reducing what goes to the tip, buying products produced locally, using equipment efficiently and upgrading to cleaner technology where possible.

To find out more about how your business can reduce its carbon footprint, go here.

Post-Covid working world

Your Own Business
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Keep employment agreements and policies up-to-date

Over the past 18 months, we have seen significant changes to employees’ hours of work, rates of remuneration and the expansion of flexible working arrangements as businesses have adapted to the Covid economy.

With most sectors of our economy recovering, and despite some occasional changes in alert levels, both employers and employees should ensure that any agreed post-Covid terms of employment or changes to the workplace are accurately recorded in their employment documentation.

Changes to hours of work and remuneration

In 2020, a significant proportion of businesses reduced their employees’ hours of work and rates of remuneration in response to the economic impact of Covid and claimed the government wage subsidy.

While many employees have returned to their previous hours and rates of pay, there is still a significant number who have not. It is important that employees’ rates of pay and hours of work are formally recorded; this will help avoid uncertainty and clarify how long the new hours/pay are intended to stay in place. The best way to achieve this is to prepare a variation letter for them to sign and return. This sets out an employee’s new hours of work and/or remuneration. They should of course seek independent legal advice.

Working from home

Covid has been extremely disruptive to our traditional ideas of what it means to be ‘at work’ and has been a catalyst for many businesses to introduce, or expand, flexibility for their employees. The introduction of working from home means that your employee’s home should also be recorded as a place of work in their employment agreement. This re-classification, however, raises some other issues that should be worked through.

Health and safety is important. For home-based workers who can perform their roles remotely, the main issue is whether their home is adequately set up to be a place of work. For example, are their desk, chair and computer screens ergonomically correct? If not, you should consider whether your business is prepared to subsidise or cover the cost of purchasing this furniture.

We recommend you consider whether the health and safety provisions in your employment agreements are fit for purpose in light of your employees’ homes being treated as a place of work.

Another issue is working from home expenses, such as internet and phone usage. You may wish to consider whether a weekly/fortnightly allowance is appropriate to subsidise employees’ expenses when working from home. Tax consequences will also need to be taken into account.

You will also want to ensure that sensitive business information remains confidential despite being in your employee’s home, and to ensure you have policies in place to address these issues.

What ‘flexible working’ looks like for a particular workplace is a major consideration. While many employees appreciate the flexibility that comes with working from home, you must take into account how allowing a large proportion of staff to work that way impacts your workplace culture and cohesion.

We recommend employers consider introducing flexible working policies in consultation with their staff in order to identify how often their employees can work from home and the rules and expectations around how they will stay connected while they are out of the office.

Overseas travel

With travel bubbles open (and sometimes closing) with Australia and the Cook Islands, both employees and employers must be mindful of the possibility of employees being unable to return from overseas trips due to unanticipated Covid outbreaks.

Employers should develop overseas travel policies, in consultation with staff, to establish the process for authorising or declining an overseas travel request. If overseas travel is allowed, employers should consider whether their employees should take their work computer with them (if they are capable of working remotely) so there would be minimal business disruption if they are unable to return for some time.

Final thoughts

Covid has thrown a spanner in the works in the way we carry out our day-to-day business. It has, however, given us all an opportunity to work in different ways. It is important to ensure your employment documentation reflects your workplace’s new normal.

Property briefs

House, Latest news, News
0

Government housing package: other notable points

The big ticket items of the government’s recent housing package included the extension to the bright-line test as well as landlords no longer being able to offset their tax with interest paid on their rentals. We have covered these two items here.

There are, however, a number of other features of the package that may make it easier for New Zealanders trying to get onto the property ladder and to help increase the housing supply.

Increases to income and price thresholds for First Home Grant

Since 1 April 2021, more New Zealanders can qualify for government assistance to buy their first home. Income thresholds for singles applying for the First Home Grant have increased from $85,000 pa to $95,000 pa as well as an increase for a couple’s combined income from $130,000 pa to $150,000 pa.

Similarly, the price thresholds for both new homes and existing homes in many areas of the country have also been increased. With the rapid rise in house prices leaving the scheme’s original house price caps desperately out of kilter from the real-time housing market, first home buyers have suffered. Some had to rely on parents for additional funding or others have been completely priced out of their local housing market where prices had risen well above the threshold for government assistance.

The increases vary between regions and differ depending on whether you are looking to buy a new or existing home. There is a full list of the changes to the house price thresholds in your region here. With more people now being eligible to apply for the First Home Grant to subsidise the purchase of their first home, we hope that more Kiwis will get the assistance they need to help get them on the property ladder.

Housing Acceleration Fund

Property developers will also get a helping hand from the government’s housing package. A $3.8 billion boost to development has been announced and will subsidise the cost of providing services and infrastructure to ‘build-ready’ land. In subsidising these significant upfront costs which often slow housing development, the government hopes to increase the supply of a range of affordable, public and mixed housing.

The Housing Acceleration Fund is available to a range of key stakeholders in both the private and public sector but it will rely on local government playing its part in opening up suitable land to allow more housing development projects to take place. Developers involved in housing development should speak to their local council first for more information about whether they are eligible for assistance from the fund or for what stages of housing development the fund is available.

Kāinga Ora Land Acquisition

The government continues to support affordable housing by lending Kāinga Ora an additional $2 billion to assist with land acquisition for social housing development projects. The increased capital is expected to see the rate of acquisition of land increase which, along with the funding boost for development of public and mixed housing, aims to increase the supply of housing across the country.

Apprenticeship Boost

Finally, the apprenticeship subsidy scheme (Apprenticeship Boost) is extended for a further four months. Employers taking on apprentices can access a $1,000 per week wage subsidy for first year apprentices and $500 for second year. This extension will help ensure that enough skilled tradespeople are trained to take advantage of the government’s plans to increase housing supply by not only enabling a greater workforce to achieve the government’s affordable housing goals, but also by providing private developers with a sufficient pool of skilled workers to draw on to keep up with housing demand.

Whether you are a first home buyer trying to find your feet in the property market, a property developer looking for a financial boost to kick-start your latest housing development project or an employer with apprentices, the government’s housing package will help address the supply issues affecting the housing market and will give a financial leg-up for those working to increase supply.

Business briefs

News, Your Own Business
0

Mainzeal: lessons for directors

Mainzeal Property and Construction Ltd was a New Zealand construction company placed into liquidation in 2013. The liquidators brought proceedings against the directors of Mainzeal, alleging a breach of directors’ duties, including reckless trading and allowing Mainzeal to take on obligations that the company could not perform. The High Court found the directors were personally liable for reckless trading. The decision was appealed to the Court of Appeal.

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Cyber security 101 for business

News, Your Own Business
0

Some practical tips

You arrive at work to find that files with sensitive commercial and client information held on your computers have been hacked. This is the situation the Reserve Bank of New Zealand (RBNZ) found itself in earlier this year. In January, the RBNZ encountered a data breach of its global file-sharing application Accellion FTA. This application was once used by the RBNZ and its stakeholders to share personal and commercially-sensitive information.

It is alarming to contemplate having to negotiate with hackers who have stolen your business information for ransom. All businesses can learn from the RBNZ’s incident to increase awareness of cyber security and minimise the risk of a hacker attack. Prevention is the best solution.

Install antivirus software

Antivirus software helps detect, quarantine and remove malicious software from computers. Although Windows 10 comes with Windows Defender built-in, this only provides a baseline level of protection. Hackers are constantly inventing new viruses and threats, and it’s important to have up-to-date antivirus software. It’s worth paying for reputable antivirus software; free antivirus software programs can be fake and/or harbour viruses.

Use a virtual private network (VPN)

If you connect a device to free public Wi-Fi networks at, say, local cafes, you’re running a business risk. If hackers access that network, they can see everything you do on the internet, including logins and passwords. A VPN helps to protect you from these risks. A VPN provides online privacy, anonymity and security by creating a private network connection. Like antivirus software, it is worth paying for VPN software to ensure you receive a higher quality product.

Implement patch management

Patch management ensures that all operating systems and software on your business computers are up-to-date so the likelihood of a known security risk being exploited on your computers is reduced.

Although it is tempting to delay notifications that say ‘Windows needs to restart your computer to install the latest update’, installing those updates is critical to maintain security.

Older operating systems such as Windows 7 are easier to hack than the later version (Windows 10) because Microsoft no longer provides updates and support has ended. As a result, there are known security vulnerabilities which have not been fixed.

Regularly back up data

Your IT systems, including all data, should be backed up to a secure location, so that business can be restored quickly if it is cyber-attacked or there is another data loss event. Typically backup and business continuity plans are developed to ensure downtime is minimised. Often this will include backups taken at multiple times on any given day and at day end, and stored in multiple locations. Backups should be held for a reasonable period to avoid replicating viruses or other harmful codes.

Implement email filtering system

Emails are a big threat to cyber security. An email can purport to be from a genuine company but have fake credentials, could have been compromised by a hacker or have malicious attachments.

Downloading such emails could give a virus access to your computer. It is advisable to prevent programs from being run inside email attachments without permission. Email filtering system features are available with some Microsoft products but you may need to ensure these are turned on.

Web filtering

This technology stops web pages from being accessed that are known to contain harmful or restricted content. Web filters rely on constantly updated databases that record websites known to be associated with harmful or restricted content.

Train your staff

Staff members should be trained on cyber-attack risk and its protection. Even with the best measures in place, staff can unwittingly present security risks, such as clicking on email attachments from spam emails.

Don’t forget the basics

It’s easy to forget IT fundamentals. Have a screen lock. Create a complex password; ensure it is different for each account and change it frequently. Install two-Factor Authentication (2FA) that adds an extra layer of security by requiring users to provide two layers of information to gain access to a computer or network (such as inserting a password as well as code texted to your mobile phone).

Have an IT adviser

Unless your core business is IT, employ (or have on call) an IT adviser who can assess the risks to your business and implement the above steps. We also recommend you engage them periodically to undertake audits and to expose any weaknesses before a cyber-criminal exploits them.

Protect your business

Cyber security and cyber threats are now global problems. Failing to put in place measures to protect your business from these threats can easily lead to business failure. It should be a priority in your business planning.