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A guide to employment law for new businesses

If you’re taking on staff for the first time, it’s crucial to get to grips with employment law.

Employment law encompasses dozens of different laws and acts in relation to the rights of employees, including disability discrimination, health and safety, and contracts – to name but a few! This is a huge field to get your head around. Our advice? Speak to the experts, and we just so happen to know some!

We’ve teamed up with Ellis Whittam to get their advice on how to get started:

1. Check that all employees have the legal right to work in the UK before they start employment

By demonstrating that you have conducted an appropriate online check, you will have a statutory excuse against liability for a civil penalty if it later comes to light that an employee has been working in the UK illegally, or that they were not permitted to undertake the type of work they were employed for.

You can do this using the online Right to Work Checking Service on GOV.UK. You should keep copies of the documents provided as proof.

2. Provide employees with a section 1 written statement of employment terms within two months of starting work

The section 1 statement must cover the following:

  • The names of the employer and employee
  • The date the employment starts, and the date the employee’s period of continuous employment began
  • Pay (or method of calculating it) and interval of payment
  • Hours of work, including normal working hours
  • Holiday entitlement and holiday pay
  • The employee’s job title or a brief description of the work
  • The employee’s place of work
  • A person to whom the employee can appeal if they are dissatisfied with any disciplinary decision relating to them, or any decision to dismiss them
  • A person to whom the employee can apply for the purpose of seeking redress of any grievance relating to the employment, and the manner in which any such application should be made

From 6th April 2020, the information required in the section 1 statement will increase and employers will have to provide the statement on the first day of employment.

3. Provide written details of your disciplinary rules and procedures

Best practice would suggest that this information should be contained in a complete Employee Handbook containing all of your workplace policies and procedures.

4. An employment contract comes into effect once a potential employee accepts an unconditional offer of employment

However, it’s standard practice to make offers conditional on certain requirements, such as satisfactory references. The contract may form prior to the employee starting work.

5. All employees must be auto-enrolled into a workplace pension into which the employer must contribute

Employees can opt out of this if they wish to.

6. You can only change contractual terms of employment if you have reserved the right to do so in the contract or have your employee’s agreement or consent

Any changes must be confirmed in writing within one month of the change taking effect.

7. Almost all employees are entitled to be paid a minimum wage including casual, part-time and agency workers

The National Living Wage applies to workers aged 25 and over and is currently £8.21 per hour. There are four hourly rates of National Minimum Wage:

  • £7.70 for 21 to 25-year-olds;
  • £6.15 for 18 to 21-year-olds;
  • £4.35 for 16 and 17-year-olds;
  • £3.90 for apprentices under 19, or apprentices over the age of 19 but who are in the first year of the apprenticeship. After their first year, apprentices must be paid the rate applicable to their age.

These rates are generally updated by the Government every April.

8. As a minimum, full-time employees are entitled to 5.6 weeks’ (28 days) paid holiday per year

Part-time workers are entitled to the same holiday on a pro rata basis. Entitlement to holiday starts to accrue from the first day of employment and continues to accrue during periods of absence (for example, maternity leave or sick leave).

9. Unless an opt out is signed, workers over 18 are not permitted to work more than 48 hours per week

If working over six hours, workers are entitled to a rest break of at least 20 minutes. Workers are entitled to a daily rest break of at least 11 hours, in other words they should work no more than 13 hours in a day, and a weekly rest break of at least 24 hours, both uninterrupted.

10. It takes two years of continuous service before an employee has the right not to be unfairly dismissed

Prior to that, employees can be dismissed with relatively little risk, but advice should always be sought from an Employment Law specialist on specific circumstances. After that two-year period, employees can only be dismissed for one of five potentially fair reasons:

  • Conduct
  • Capability (this includes both poor performance and medical incapacity)
  • Redundancy
  • Illegality
  • Some other substantial reason (SOSR)

11. All applicants, workers and employees have the right not to be discriminated against in respect of the following protected characteristics:

  • Age
  • Disability
  • Gender reassignment
  • Marriage and civil partnership
  • Pregnancy and maternity
  • Race
  • Religion or belief
  • Sex
  • Sexual orientation

You should be aware of both direct and indirect forms of discrimination.

Direct discrimination occurs when a prospective or actual employee is treated less favourably than others because of a protected characteristic. For example, it would be unlawful to monitor absences from work due to morning sickness and count these towards triggers for action under your attendance management protocol, as this would directly discriminate against pregnant employees.

Indirect discrimination occurs when a company’s policies, procedures or rules which apply to everyone has the effect that people with a certain protected characteristic are put at a disadvantage when compared with those who do not share it. For example, if you introduce an incentive for good attendance, you must ensure that you don’t discriminate against those who are absent due to pregnancy or genuine health reasons.

Take the time to get clued-up

Ultimately, while the sheer amount of employment law legislation to get your head around may seem daunting, it’s important to grasp the basics before taking on employees, as this will help you to avoid a variety of legal pitfalls. With the number of Employment Tribunal claims continuing to rise it’s best to be prepared and lay the appropriate groundwork to reduce risk to a minimum.

How Ellis Whittam can help you

Ellis Whittam offers personalised HR and Employment Law support to take the hassle out of employee management and help to ensure your business is compliant. As part of an unlimited, fixed-fee service, you will have access to a qualified adviser, who will offer as much help as you require with day-to-day employment law and HR-related matters; from drafting bespoke contracts and handbooks to providing commercially-savvy advice on any employment issue.

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