Case Study: When Kindness Turns to Conflict

When kindness turns to conflict: a Rebox HR case study

Close, family-style relationships between small business owners and employees are common, and usually positive. The trouble starts when the lines blur and the employee begins to take advantage. This real Rebox HR case shows how a good-natured employer ended up paying SSP, discretionary sick pay, and a generous COT3 settlement before the matter was finally closed through Acas conciliation.

Having worked with SMEs for years, I have seen this pattern more than once: kindness in, conflict out. The lessons below are the ones I most often repeat to owners after the dust has settled.

The situation

According to Acas, around 1 in 4 workplace disputes that reach early conciliation involve absence, conduct, or a breakdown in working relationships (Acas, 2024). This case ticked all three boxes. We were approached by a small family-run business for support with an HR matter. The employee had been with them for over two years, and a close personal bond had formed along the way.

They were treated like family. They were even gifted a holiday at one point. After a while, though, the employee began refusing basic tasks, the odd delivery, minor ad-hoc jobs, on the basis that the work was "not in their job description". These were reasonable management requests. The employer was astounded, and felt that the closeness of the relationship was being exploited.

The owners decided it was time to raise the issue and called the employee into a meeting. Part way through, the employee stormed out, refused to continue the conversation, and did not turn up for work the next day. Attempts to check in went unanswered, except for a doctor's note signing them off work for a month. The employer could not really afford it, but started paying SSP and topped it up with discretionary sick pay anyway.

Two months passed with no communication from the employee. During this time, colleagues began reporting that the employee had been posting abusive and derogatory comments about the business and their co-workers on social media. That was the tipping point. The employer picked up the phone to Rebox.

Structuring the case

I reviewed the case in depth and agreed that the employee had been taking advantage of the employer's good-natured approach. My advice was to start the formal process by writing to the employee and inviting them to a meeting with me and the clients to discuss the ongoing absence.

Before the invitation went out, I made sure the clients were comfortable with the planned meeting format. I would run the meeting as an intermediary, acting on their behalf but leading the conversation. I built a clear timeline of events and documented every step the employer had taken to reach out since the original fall-out.

This is the point where following the Acas Code of Practice on Disciplinary and Grievance Procedures really matters. Tribunals can uplift awards by up to 25% where the Code has not been followed (Acas). Even when an employee refuses to engage, the employer still has to show they tried.

For SMEs without in-house HR, this kind of framework is exactly where our HR project support and disciplinary and grievance support come into play.

The meeting

I have to say, we were all very surprised when the employee actually arrived for the meeting. I sat alongside the clients and opened by taking the employee through their legal and statutory rights, making sure they understood them. That first step always helps me identify any risk to the employer that can be minimised later.

The employee then claimed to have mental health issues. This had not previously been disclosed to the employer. Mental health is never something to take lightly. It is largely unseen, and it can cover a wide range of mood and behavioural changes. Even where it is raised in the middle of a dispute, it has to be handled with care and diligence.

I asked the employee how the business could support them in light of this information. The mood in the room changed immediately. The employee became verbally abusive toward the employers and toward me. They stated that their health was a private matter and launched into a sustained torrent of abuse, including threats against the employers and the business itself.

The clients were shocked. We all tried to stay calm to defuse the situation, but it was clear the conversation could not continue productively. I wrapped the meeting up and brought it to a close.

After the meeting I suggested a private debrief with just me and the clients. We discussed what had been said in detail, and with their blessing I wrote to the employee confirming that the business was doing everything it reasonably could to support them. I also included information on further support available, including signposts to professional mental health resources.

The employee's response was another doctor's note, signing them off for one more month. I advised the clients to move to SSP only, not out of malice, but to limit further financial exposure to the business. They also arranged cover, because the situation had already started to affect morale and workload across the rest of the team.

The aftermath and settlement

The employee continually refused to meet again regarding the matter. It was clear at this point that the employment relationship had broken down. Both sides said, in writing, that they no longer wanted to work together. The threats of tribunal continued.

The clients were emphatic: they did not want a tribunal. They asked me to explore alternatives. We opened a "without prejudice" conversation and offered a settlement agreement. The response was a further, increased level of abuse. Despite the generosity of the offer, the employee refused to engage with the paperwork.

The offer was withdrawn after two weeks of negotiation. Together we then contacted Acas, a body of impartial workplace experts, to use their early conciliation service. After three further weeks, we finally settled the case, and I drafted a COT3 agreement.

A COT3 is a legally binding contract entered into during Acas conciliation. Once signed, the matter cannot be taken to tribunal. It is one of the two statutory exceptions under section 203 of the Employment Rights Act 1996 to the rule that employees cannot waive their statutory rights. It was signed off and the case was closed.

In theory, my clients could have disciplined and potentially dismissed the employee. They simply did not want the stress or the hassle. I am convinced they were holding out for the person they used to know to return after whatever episode they were going through. Only when enough really was enough did they force action.

Key lessons for SME employers

According to the Chartered Institute of Personnel and Development, 76% of employers have had at least one formal grievance or dispute in the last two years, and disputes involving absence or conduct take the longest to resolve (CIPD, 2023). This case is a classic example. The following lessons come up again and again:

• Set clear boundaries from day one. Kindness and warmth are fine, but the employment relationship is still an employment relationship. Expectations around tasks, flexibility, and behaviour should be explicit in the contract and job description.
• Follow the Acas Code even when it feels excessive. Writing to the employee, inviting them to meetings, and documenting every attempt at contact is what keeps you safe if the matter ends up at tribunal.
• Treat mental health disclosures seriously, but keep the process moving. A disclosure does not pause fair process. It does mean considering reasonable adjustments, occupational health, and adjusted timescales. See our guide on managing employee absence.
• Social media abuse is a conduct issue. Derogatory posts about the business or colleagues can amount to misconduct or gross misconduct, and should be investigated using your normal grievance and investigation framework.
• Document everything. Dates, times, who said what, what was offered, what was refused. Contemporaneous notes win cases.
• Know when to accept a settlement over a "win". A COT3 or settlement agreement is not a defeat. It is a commercial decision that buys certainty and closure.
• Get HR involved earlier rather than later. The cheapest point in this case would have been the very first "that's not in my job description" conversation, not the COT3 stage.

How the law handled this case

Four separate legal frameworks shaped how we navigated this dispute:

Acas Code on Disciplinary and Grievance

The Code sets the minimum standard for handling conduct, absence, and grievance issues. Failure to follow it can lead to tribunal award uplifts of up to 25% (Acas). Even where the employee refused to engage, we still followed the process our end.

Statutory Sick Pay

SSP is governed by the Social Security Contributions and Benefits Act 1992 and related regulations. From 6 April 2026, SSP becomes payable from day one, with no lower earnings limit, at £123.25 per week or 80% of average weekly earnings, whichever is lower (GOV.UK). Contractual sick pay is separate and governed by the employment contract. Our employer's guide to SSP covers the detail.

Equality Act 2010 and mental health

Mental health can be a disability under the Equality Act 2010 where it has a substantial and long-term adverse effect (12 months or more) on the employee's ability to carry out normal day-to-day activities. Where that threshold is met, the employer has a duty to make reasonable adjustments. See also our bullying and harassment guide.

Acas early conciliation and COT3

As of December 2025, Acas early conciliation runs for up to 12 weeks, extended from the previous 6 weeks (Acas). A COT3 reached during this period is legally binding, cannot be re-litigated, and is one of the two recognised exceptions under s.203 ERA 1996 to the rule that employees cannot contract out of statutory rights.

What you can do before things escalate

The best cases are the ones that never become cases. A few things consistently help SME employers avoid the situation above:

Clear job descriptions and contracts

Vague job descriptions are the most common root cause of "that's not in my job description" standoffs. Review contracts every two years, and make sure flexibility and reasonable management instructions are covered.

A practical boundaries and social media policy

You need a short, plain-English policy that covers professional conduct, social media, and confidentiality. It is the document you will rely on if you ever need to address off-duty posts about the business.

Performance management that is actually used

Most SME performance issues are not addressed until they are already severe. Regular 1:1s, light-touch appraisals, and written warnings when needed are what stop a small issue becoming a COT3.

Early intervention and a clear grievance route

The moment a relationship starts to sour, get the issues on the table in a formal but non-threatening way. Early conversations, clearly documented, change the outcome.

Ongoing HR support

Retained HR support gives you someone to call on day one rather than month three. Our retained HR service is built for exactly this.

How Rebox HR Can Help

Situations like this are stressful, but they do not have to be handled alone. Our HR project support gives you an experienced adviser who can attend meetings, manage correspondence, and guide you through to resolution. Whether the situation calls for a disciplinary and grievance process or a settlement agreement, we handle the process step by step so you can focus on running your business.

If you are dealing with a difficult employee situation, book a free consultation or call us on 01327 640070.

Further reading

• Acas Code of Practice on Disciplinary and Grievance Procedures
• Acas early conciliation
• Statutory Sick Pay (GOV.UK)
• How to handle an employee grievance
• Workplace investigations guide for employers
• Settlement agreements guide for employers
• Managing employee absence guide for SMEs
• Workplace bullying and harassment: employer's guide