Mitigating Employment Risk While Building a Team
Employment Law Advice for Employers
Hiring the first employee is a monumental moment for a startup. It often means that founders take a first step towards freeing up some time, getting specialist expertise into the business and building out the team that’s going to drive scale.
However, if an owner-operator doesn’t consider some crucial factors and meet certain obligations, being an employer could quickly turn sour and lead to costly and time-consuming disputes and potential litigation. Get it right, however, and you could find your employees not only help drive your business forward but make significant contributions to the culture and identity of your business.
Here we outline some key considerations from our employment solicitors in London for building out your team.
Employment Contracts & Handbooks
Every employer is required to give each employee a written statement of particulars like employment contract or employee policy handbook. This sets out the employer’s understanding of the main terms and conditions of the person’s employment. Although not required by law, this is usually achieved through a contract of employment. A contract of employment provides clarity on what has been agreed upon and can also contain express terms which protect the business. This could include terms relating to restrictions post-employment, confidentiality, or perhaps intellectual property. Long term, these are crucial to get right to protect shareholders interests and mitigate risk.
There are some employment rights that cannot be overridden by terms contained in the employment contract. These are statutory rights and will automatically apply to employers and employees regardless of the contents of the employment contract. The following are examples of statutory rights:
That the employee will be paid at least the minimum wage.
The employee will be entitled to family-friendly leave entitlements such as maternity, paternity or adoption leave.
The employee will receive annual leave entitlements.
The employee will receive other minimum entitlements as part of working time rules.
Leave Entitlements and Daily Events
All workers are entitled to 5.6 weeks’ statutory annual leave. This minimum entitlement can include bank holidays. For an employee who works a five-day week, 9 am to 5 pm, Monday to Friday, this translates to 28 days in an entire annual leave year. Many employers choose to be more generous in their contracts of employment and provide employees with greater holiday entitlement than the statutory minimum.
Employees who take regular holidays can be more motivated and perform more effectively than those who do not. They are less prone to accidents and are less likely to suffer from stress because they have regular opportunity to rest, which means they may take less sickness absence.
Managing annual leave will be one of many day-to-day management activities that an employer will have. Routinely, employers will need to manage other time off requirements, such as antenatal appointments, adoption leave, maternity leave, paternity leave or shared parental leave.
Employees are also allowed to take a reasonable amount of unpaid time off during working hours to deal with an emergency involving a dependent. Employees also have the right to request flexible working, and employers need to ensure that this is dealt with correctly, whilst not falling foul of any discrimination issue.
Building awareness of an employer’s obligations towards employees and their entitlements is crucial to avoiding disputes.
Disputes
If disagreements do arise, they can often be sorted out through informal conversations. However, if the issue is too serious or informal resolution fails, there is an ACAS Code of Practice of Disciplinary and Grievance Procedures. This provides practical guidance on, and principles for, handling workplace disciplinary and grievance situations.
Although a failure to follow the code does not make an employer liable to proceedings, employment tribunals will take the code into account when considering relevant cases. An unreasonable failure to comply with a provision of the code may result in an adjustment of up to 25% in any compensation awarded. This may be up or down depending on which party is at fault.
In a nutshell, the code requires in the case of disciplinary procedure, that a reasonable investigation of the complaint is made, the evidence should be used to invite the employee into a disciplinary meeting using a letter, the employee should be given a full opportunity to put forward their mitigation and the decision should be given in writing with a chance to appeal.
For grievances raised by the employee, the employer should invite the employee into a meeting using a letter, fully investigate the complaint and provide a written response and chance to appeal.
In Summary
Hiring that first employee and then building out the team with subsequent hires is an exciting opportunity for a startup. However, like any opportunity, it is really important to be aware of the risks involved and to put measures in place to mitigate those risks. There are various tools available to employers including:
Robust employment contracts and handbooks that protect the business.
An awareness of leave entitlements and strategies to motivate and engage staff
Dispute resolution best practices to resolve disagreements efficiently and amicably.
Whatever your employment law problem, whatever employment law question you need to ask, Dragon Argent’s employment solicitors in London has the answer. For a no-obligation, initial discussion of how we may be able to help, please book an appointment with one of our Employment Law Solicitor now.