By Matt Gingell on Small Business UK – Advice and Ideas for UK Small Businesses and SMEs
Before taking on any employees, it’s important to grasp the basics of UK employment law. Otherwise, you could become unstuck. Here are some of the things you need to know.
Employment contracts
There is no legal requirement under UK employment law to provide a written employment contract but it is advisable to have one so the terms of employment are recorded.
Employees are legally entitled to a written statement of the main terms and conditions of employment if their employment contract lasts at least one month or more. The employer must provide the written statement within two calendar months of the employee starting work. The written statement must include a number of details including, among other things, the name of the employer, the employee’s name, job title and start date, the amount of pay and timing, hours of work, holiday entitlement, flexible working policy, notice periods and place of work.
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Protecting the interests of the business
Businesses need to think about protecting their interests such as confidentiality, client connections, staff, suppliers and intellectual property. Any relevant provisions should be included in the employment contract.
Depending on the circumstances it may, in certain cases, for example, be appropriate to include clauses preventing employees for a certain period on leaving from competing, soliciting or dealing with clients or poaching staff. Any post-termination restriction must, however, go no further than is reasonably necessary to protect the legitimate interests of the business and each case will be different.
As part of the Government’s Smarter regulation to grow the economy policy paper, the Government has proposed to limit the length of any non-compete clause to three months. The change would allow employees greater flexibility to join a competitor or set up a rival business after they have left their employer. Employers may have to consider other ways to protect their business.
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Unfair dismissal
Generally, an employee must have at least two years’ service to bring an unfair dismissal claim. Therefore employers do have more leeway to dismiss difficult employees prior to an employee reaching two years’ service. Usually, employers would only have to provide notice.
There are some claims that employees could bring without a continuous service requirement such as whistleblowing or discrimination. It’s therefore advisable to follow some form of process in all dismissal cases.
Also beware that an employee can take the minimum statutory notice into account in calculating two years’ service – which is one week for continuous employment less than two years but more than a month.
After two years’ service employees have general unfair dismissal rights and employers have to tread more carefully. Employers can only dismiss for a fair reason, such as for example, redundancy, performance or misconduct. The employer must also follow a fair procedure. The procedure to be followed will depend on the reason for the dismissal and the circumstances of the case.
Similarly after two years’ service, if an employer breaches a fundamental term of the employment contract, such as a pay term or the implied term of trust and confidence, providing the employee resigns swiftly as a result of the breach, the employee could claim constructive unfair dismissal.
Discrimination
It’s against the law to discriminate directly against a job applicant or employee because of the following protected characteristics: age, being or becoming a transsexual person, being pregnant or on maternity leave, being married or in a civil partnership, disability, race including colour, nationality, ethnic or national origin, sex, sexual orientation and religion, belief or lack of religion/belief. There is also protection from discrimination for being associated with someone who has a protected characteristic or for complaining about discrimination. There are other types of discrimination, too, such as harassment relating to a protected charaterstic.
Personal data
Employers need to be aware of their obligations under the General Data Protection Regulations (GDPR), which came into force on 25 May 2018. Personal data must, for instance, be processed lawfully, fairly and in a transparent manner. This includes employers being required to provide detailed information to their employees about processing of personal data.
Other aspects of UK employment law could be applicable to your business, too. Areas could include business transfers, whistleblowing and monitoring to name but a few.
This article is intended for guidance only and should not be relied upon for specific advice
Matt Gingell is managing partner of Lombards
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