Employment - from the employer's point of view

Managing the risks

Most businesses need employees. However, over recent years the burden of employment regulation and legislation has consistently increased to the extent that every prudent business must now actively managing the resulting risks, or pay a high price when things go wrong.

We live in a claims and complaint culture where your staff are aware of their 'rights' and they will be actively encouraged to pursue these, if they feel they have grounds to do so. It is therefore essential for businesses to put in place systems and documentation that from the very beginning minimise the inevitable risks, and set out appropriate codes, ground rules and procedures. Every business is unique and what suits one will not be right for another.

Below are some of the areas you need to consider. Properly dealing with these and other relevant matters will be a very sound investment for years to come and will give you the peace of mind that you have done your best to manage this area of risk to your business.

Selection and interview

You are running real risks if you cannot prove that you operate transparent and fair selection and interview procedures, particularly if you are accused of discrimination by a failed applicant. Compensation for discrimination related claims is now unlimited and some awards are very high.

Contracts, codes and procedures

It is mandatory that you provided basic written details of employment. However it is really essential to provide your staff with a more comprehensive Contract of Employment, or Service Agreement in the case of senior directors and employees. These will need to be tailored to your business and the way you operate, and they may be accompanied if appropriate by other Codes, Procedures, Staff Handbook, etc. Some of the areas which need to be covered include:

• Maternity/paternity/'family friendly' flexible working arrangements - your policy on these, which is compliant with the latest regulations, should be clear.
• Anti-discrimination codes and procedures - anti-discrimination legislation is wide ranging and the areas to which it relates is going to increasingly expand and certain requirements are mandatory. This is a minefield with very expensive consequences if things go wrong.
• Working time directive - this affects the hours your staff can work, unless you have specific opt out agreements in place.
• Grievance procedure - this is where well drafted and operated procedures can often head off problems before they escalate into expensive claims and waste of management time.
• Disciplinary procedures - again if these are clear and well devised and properly operated they will greatly reduce your risk of getting things wrong when disciplinary issues arise.
• Sickness policy and procedures - all employers are at substantial risk from mishandling matters when staff are absent due to illness, particularly when this is prolonged or could become a disability leading to particular dismissal problems. Do you have clearly set out and agreed policies and procedures for this?
• Termination - what notice applies? When can you dismiss and for what? What documents and information must be returned? Can you pay wages in lieu of notice? Can you send your employee on 'garden leave'?
• Trust and confidence - do you need restrictive covenants, or a separate Trust and Confidence agreement, to protect your business? If you get the scope wrong it will be ineffective.

The above list is not exhaustive but it illustrates the minefield in which businesses in the UK operate. A leading employment law barrister has been quoted as saying that if you think things have already gone too far "you ain't seen nothing yet". Things are going to get more onerous rather than easier, and risks will unfortunately increase at the same time. They are very real but can be substantially reduced.

Investing in putting comprehensive up to date employment documentation and procedures in place is a vital part of managing the very real risks of employing your staff.

Redundancy, termination and dismissal

These are areas each with its own problems all of which need approaching with care. Careful planning and timely advice will again be a wise investment.

Transfer of undertakings

If your business acquires or is acquired by another business there are strict regulations on how your staff must be treated and these are neither logical nor obvious. Again you should seek advice on this issue.

Employment claims

Unfortunately even the best run and organised company may from time to time face a claim to the court and/or an Employment Tribunal. This is when you will be pleased you invested in putting appropriate systems and policies in place. The burden of proof is often on the employer to prove that they operated properly and demonstrating that you worked to appropriate and sensible procedures can be a vital part of that defence.

Claims are now potentially very expensive and you will need good advice and representation if you are unfortunate to find yourselves facing one.

We can help you with all the above. For more information contact Deborah Boylan or Sally Togher