Legal Implications Of Employing Staff

One thing that often puts people off starting their own business is knowing they will need employees to deliver a good service, but are afraid of being an employer.

It is a risky time for any business, but as with most things, once you know what to watch out for, it’s something you will be better prepared to tackle.

There’s a lot to know about the legal side of employing people and it’s the main area where small businesses either knowingly or unknowingly fall foul of the law.

The story begins before you even have anyone to employ. When you’re thinking about who you want for a job, you have to be careful not to be guilty of any form of discrimination. Hopefully, you will be aware of this in relation to gender and race. But with relatively new age-related discrimination laws now too, to put in a job ad for someone “experienced” or “young” may land you in an equal amount of hot water too. Whoever you ask for, you must be able to justify your reasons objectively.

One way of achieving this is by opting for a “blind” initial selection process where you do not ask for any real personal details to begin with, apart from their name and a contact number (i.e. no age or photos).

Seek advice on the way you set up your premises for interview – is the interview room accessible to someone in a wheelchair, are fluorescent lights going to create a problem for someone suffering from a light-sensitive condition such as epilepsy? Warn candidates of any conditions you think may create a problem.

When you get to the job offer stage, consider if a probationary period is necessary or desirable. Equally, consider if a fixed term is appropriate for your particular candidate.

What pension provisions will you offer? What job-related benefits will be available immediately and which will be phased in over time?

Sufficient information about the role should be included with the job offer so the candidate can assess their own suitability for the role. This should not serve as the main contract, however. Draw up a separate one.
Every employee has a right to a written statement of employment within two months of starting work. This should be done by a professional and it should cover any matters which are not included in the office or company employees’ manual.

Areas which must be covered by law include: name of employer, employee’s name, date of commencement of employment, job title, address of workplace, remuneration and its frequency, working hours, and holiday entitlement.

On a separate sheet, you should also include details of sickness, injury and sick pay details, period of employment, notice periods, details of overseas employment if for a month or more, collective agreements (such as those brought about by trade unions), pension details and disciplinary and grievance procedures.

There should also be details included about contractual bonuses, commission payments and obligations for an annual salary review.

If the job offer is for a senior role, or high level management, you should also include issues tackling confidentiality, fidelity, including adequate restrictions once they’ve left your business, periods of notice required and garden leave, if appropriate.

Although fairly unusual, you can amend a contract, preferably in writing. This is usually necessary through the results of collective bargaining or if an employee performs new duties without objection.

In the unlikely event that your working relationship with a member of staff goes wrong, there are a number of pointers to consider.

Every employer has to adhere to a three-step disciplinary and grievance procedure – you can’t just lose your rag and sack someone on the spot… at least not legally!

If a member of staff has a fixed term contract and you fail to renew it can be unlawful. If a series of renewed fixed terms take the employee’s spell at your business to in excess of four years, the fixed term is then deemed to be permanent. Don’t underestimate the grievance powers of any temporary, contract or consultant workers you employ.

Read up on the Equal Pay Act before you decide to deduct any money from an employer’s wages. And likewise, with holiday and sick pay, make sure a clear and consistent policy is in place. If there isn’t one, Statutory Sick Pay applies.

And if you are thinking of dismissing someone, never fail to seek legal advice first, or it could get messy…and expensive.

Of course all of the legal information contained here is not a replacement for professional legal advice.