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Employment law and HR issues - the misconceptions of a small business owner - Myth No.2

This is the second of our myth-shattering series of blogs about practical employment law and HR issues and business.

Myth No.2 – Why bother putting things in writing for my employees – there’s no point!

The Q&A below will shed some light on common employment law and HR issues for small business-owners.

Q: I am a small business, and there is no point putting documents in place for my employees. I have a high turnover of staff, and it is just a waste of time for people who may only stay with me for a few months.

A: Getting an employment lawyer to draft legal documents is a way of protecting your business. If you put documents in place such as contracts, policies and procedures, then apart from updating them if new legislation requires, you can use them over and over again. You therefore get excellent value for money. On a practical note, if you have high turnover, have you thought about how you could do more to retain your staff? If employees feel valued then they are more likely to stay. There are lots of other ways besides salary to reward staff and provide a nice place to work!

Q: It will cost me a lot of money. I am better off investing in my business instead.

A: It may cost less than you think! Solicitors often offer fixed prices so you know how much to budget for. In any event, getting legal advice IS investing in your business.

Q: If you ensure that all your documents are up to date, then you are laying the foundations for good employee relations. If you are sued for unfair dismissal or discrimination, then a well-documented paper trail to show the sequence and reasoning behind decision making is essential for reducing the risk of losing in an employment tribunal. For those employers with legal expenses insurance, you might be refused cover if you don’t keep proper personnel records (check your policy). Remember - Prevention is always better than cure, and usually much more cost effective!

Q: I can get by with just agreeing things with my employees verbally. I don’t need to put anything in writing.

A: An employment contract can be verbally agreed and therefore binding. However, this often leads to “he said, she said” situations and ensuing misunderstandings. Employers who have clear policies and procedures in place find it more straightforward to discipline staff for misconduct, because behaviour guidelines are set out in the Disciplinary Policy. Likewise, the employer can follow the simple steps set out in the Disciplinary Procedure. Similarly, employers are often at a loss to understand how to deal with a complaint lodged by an employee, and a clear Grievance Procedure will give guidelines to both parties.

Q: There is no legal obligation to give my employees written contracts, so why should I bother?

A: There is no legal obligation to provide a contract of employment, and this can be agreed verbally, however there is a legal obligation to provide as an absolute minimum a “written statement of particulars of employment”.

Going a little bit further and having ALL the terms of the agreement set out in an employment contract is helpful to avoid misunderstandings. It also enables the employer to include extra provisions, such as the ability to deduct money from wages in certain circumstances, how overtime is calculated, probationary and appraisal provisions, and opting out of working time restrictions.

Some employers might want to go even further and include things like post-employment restrictions on employees working for competitors or poaching the company’s clients.

Q: I don’t have to have written policies. I can just rely on ACAS guidelines

A: ACAS have produced a Code of Practice, but this is guidance for employers and not a replacement for company procedures. Disciplinary and Grievance Policies are essential, and it is a legal requirement to have a Health and Safety Policy if there are more than 5 employees.

Gelbergs Solicitors in Islington, London N1 offer a comprehensive multi-disciplinary HR advice and employment law service to employers. We would be happy to hear from any business owners who would like a free assessment of their existing employment contracts, and HR policies and procedures. We can also draft employment contracts and procedures at all levels for a fixed fee.

Call us on 020 7226 0570 and ask for Emmajane Taylor-Moran or Jane Manville. Our website can be found at www.gelbergs.co.uk and twitter at @gelbergs.