Three Top Employment Law Tips for Small Businesses
We recognise many busy, small businesses do not have sufficient time or resources to dedicate to employment law issues. We also know that mistakes can be costly. Therefore, our employment law specialists have put together their top tips to assist small businesses with their employment matters.
1. Get It Right From the Start
Under the terms of the Employment Rights Act 1996, employers are required to provide employees with, at the very least, a written statement within their first 2 months. This statement must contain a number of things including details about pensions, holiday entitlement and a brief job description. Whilst oral contracts are binding, it can be difficult to prove the terms of the contract. Therefore, writing down the terms, from the beginning will help set out what you expect from your employee, and what they can expect from you. This minimises the potential for later disputes.
2. Keep Up to Date with Changes to Legislation
Employment law is constantly changing. As a result, it is vital to review contracts of employment and internal policies to ensure that they are compliant with current legislation.
You may have noticed the widespread news coverage regarding the recent introduction of the compulsory National Living Wage. From 1 April 2016, all workers aged 25 and over are legally entitled to £7.20 per hour. However, other important legislative changes have also occurred recently which have not received the same publicity but which will still affect small businesses in our area.
Given our location in the Lake District, many of the small businesses that we work with at Arnold Greenwood are in the tourism industry. Whilst these businesses form the bedrock of our local economy, they can be more susceptible to the impact of seasonal trade. Zero hour contracts are widely used to control labour costs; offering flexibility to both the employer and employee. However, employees under these contracts are now being afforded greater protection. These employees are, at the very least, entitled to statutory employment rights, including paid annual leave and the national minimum wage. An employee who is dismissed for breaching a term in their zero hour contract which prevents them working for another employer can now bring a claim for unfair dismissal. Since 26 May 2016, these types of terms have been unenforceable so probably shouldn’t be there. If they were included, it is correct that an unfair dismissal claim could be brought.
3. Ensure dismissals are fair
Claims in the Employment Tribunal for unfair dismissal can be especially stressful and costly for small businesses. If you are contemplating dismissal, you must ensure that you dismiss lawfully i.e.
1. There must be a fair reason for the dismissal;
2. The employer must have followed a fair procedure;
3. The employer must dismiss reasonably.
The size of an organisation is considered by the Tribunal, but small businesses must still act reasonably in the circumstances. Taking legal advice before you do anything will give you peace of mind and minimise the risk of a potential claim later.
For further advice, please call (01539)720049 to make an appointment.
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