Employment law advice for start-up businesses

Employment law advice for start-up businesses

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Date15 Feb 2013
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Posted ByAdmin
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Once a business becomes established and begins to grow, it may well need to take on its first staff in order to cope with all the duties. This is not as straight forward as it may seem, with an array of constantly changing employment laws that start-ups must take into account and keep up to date with. If these are misunderstood or ignored, it can have serious implication for the business and its employees.

When taking on staff, one of the most important things to remember is to not let prejudice impact any decision making. Discrimination is illegal and, therefore, it is important to take note of any reason why one candidate was picked over another.

Furthermore, when someone accepts a job offer the contract of employment begins there and then, regardless of the terms and conditions being in writing or not. If there are still some things to check over, such as looking at references, make sure the contract is conditional. The written contract must then be provided within the first two months of employment, outlining the job title, description, pay and holiday entitlement, among other formalities. It is important to include a right to amend job descriptions and an employee's place of work, or else it may be a breach of contract.

Once an employee has started, it is imperative to ensure the job meets what has been laid out in the contract. They also have certain other rights, such as to a reasonable degree of privacy, protection against discrimination, and a secure and safe working environment. Staff must also be provided with a statement of their pay, including gross pay, deductions and net pay to guarantee transparency when it comes to wages.

When it comes to sickness, businesses must pay statutory sick pay for up to 28 weeks, which the employee qualifies for after being ill for four days. The employee must also earn more than the lower earnings limit of £107 a week to be eligible. 

If a firm has to dismiss a member of staff, they must have proof that they were acting appropriately and had reasonable cause, such as continual or gross misconduct or inability to do the job. If these processes are not carried out properly, it could end up costing the company a large sum of money.

Adrian Hoggarth, head of employment law at Prolegal, explained to Smallbusiness.co.uk that there are a number of changes to legislation in 2013, largely benefitting small operations.

An employment tribunal fee paid by the claimant is to be introduced , which should prevent some opportunistic former employees from unfairly seeking compensation. It will now cost those seeking a tribunal £250 to issue a claim and a further £950 to have it heard, serving as a worthwhile deterrent. Furthermore, claim payouts for unfair dismissal have now been capped at £74,200 or a full year's gross pay, whichever is lower.

A new form of employee contract is also to be introduced that will allow small businesses to benefit from a much more flexible workforce. They give staff a tax-free share in the company in exchange for some of the benefits standard employees expect, such as redundancy pay and the right to request training.