EMPLOYMENT - A Business Perspective

It is difficult for an employer to keep up to date with the vast amounts of legislation and case law, including European Court of Justice decisions and European Directives. The introduction of our employment legislation alone now occurs twice a year in April and October.

As we are becoming a more litigious society businesses need to manage their risks to ensure, as far as possible, that they are protected. In addition to this, employment law requires you to comply with certain essentials, regardless of the size of your business.

Terms and Conditions of Employment

Did you know that every employee is entitled within two months of starting work, to written terms and conditions of employment? The law sets out what should be included as a basic minimum. If you do not provide these, an employee can apply to an Employment Tribunal and be awarded up to four weeks’ pay as compensation. In addition, you will also be in the position of having the Employment Tribunal tell you what those terms and conditions are!

The minimum terms and conditions should include the following:-

1. The names of the parties
   
   
2. The commencement date of the employment
   
   
3. Job title/brief job description
   
   
4. Place of work
   
   
5. Remuneration
   
   
6. Hours of work
   
   
7. Holidays
   
   
8. Sickness absence
   
   
9. Pension
   
   
10. Notice of termination of employment
    
    
11. Whether there are any collective agreements applicable to the employment
    
    
12. Whether the employee is required to work outside the UK
    
    
13. Any disciplinary rules applicable
    
    
14. Any grievance procedures applicable
    
    

Please note since October 2004, you must also issue the employee with a written statement of the Statutory Dispute Resolution Procedures.

Contract of Employment

A contract of employment includes the above terms and conditions but also addresses other matters which can protect your business. For example – restrictive covenants!! When properly drafted, these can prevent business/customers being taken away by a former employee. Service agreements (more sophisticated employment contracts) are recommended for senior employees and directors and these documents recognise the importance of their position within the company.

Policies and Procedures

Are yours up to date? These are usually found in the company or staff handbook. Some are essential to comply with the law and to protect your business:

Disciplinary and Grievance – these must comply with the Statutory Dispute Resolution Procedures.

Equality and Diversity/Bullying and Harassment/Equal Opportunities – All employees are different and it is important that you and your employees treat each other fairly and do not discriminate on the grounds of gender, race, colour, national or ethnic origin, disability, sexual orientation, gender reassignment, religious or other philosophical belief (and age from October 2006!).

If you have such policies and train your employees, you will have the benefit of a defence to any discrimination claim. If you don’t and a successful claim is brought in the Employment Tribunal, there is no limit on the amount of compensation that can be awarded.

Some other policies which are key to helping you manage your business are:

Leave of Absence. This deals with everything from holidays to parental leave and time off for jury service.

Maternity/Paternity/Adoption – this is a very complex area of the law but relatively straight forward to follow once it is written down! It provides an excellent guide for employees and their line managers.

Absence Management – sickness absence is one of the biggest costs to employers. In 2004 it cost British Industry £1.7 million per week! There are two main types of sickness absence which need managing – intermittent and long-term. You also have to be wary of falling foul of the Disability Discrimination Act 1995. An Absence Management Policy can help you effectively manage sickness absence and reduce its impact on your business.

Other policies which you may wish to consider are Sickness, Flexible Working, Data Protection, Redundancy, Public Interest Disclosure, Recruitment and Internet/email use.

Redundancy/Dismissal

Get it right and you will be protected! Large scale redundancies have to comply with statutory requirements. Small scale redundancies (less than 20 employees) don’t but you still have to:-

1. Consult with employees
   
   
2. Follow statutory dismissal procedures
   
   
3. Follow a fair and reasonable selection process
   
   
4. Give the employee the right of appeal
   
   
5. Comply with their contractual or statutory notice requirements
   

When things go wrong and you no longer want the employee working for you but don’t want the risk of litigation, a compromise agreement may be the answer. This is an agreement whereby for a sum of money an employee agrees to waive their rights to pursue legal action. Beware, however, of how you negotiate one. Case law demonstrates that offering a compromise agreement can constitute grounds for unfair constructive dismissal! Diplomacy is the watch word here. Obviously we will advise you on how to approach this.

Employment Tribunal Claims

Statistics from 2005 show that they are on the rise, although the recent introduction of new claim forms seems to have discouraged the number of applicants making claims (although I am sure the Employment Tribunal would disagree claiming their new pre-application resolution procedures are working!!).

You cannot prevent an employee from bringing a claim. However, you can reduce risks regarding your liability by having (and implementing!) the correct policies and procedures. As the Employment Tribunal are making more awards for costs against parties, there may also be the opportunity to claim part of your costs from an unsuccessful Claimant.

If you have any concerns regarding your business, or if you want to attend one of our employment seminars which we hold in April and October, please contact:-

November 2005