Your workforce is the most valuable asset of your business and getting the right advice regarding employment law is crucial. Stephen Jackson, Head of the Employment Department at Harding Evans Solicitors answers some employers’ questions.

 

1. Do I have to give contracts to my staff?
You are required by law to give all of your employees with two or more months of service (even if you only have one employee) a document containing minimum particulars of their employment. If you don’t do so, and an employee complains to an employment tribunal, the tribunal can award compensation to the employee. You can comply with your minimum legal obligations by providing employment contracts to your staff and this provides an opportunity to set down terms and conditions which will protect you against tribunal complaints and actually save you money.

2. Do I have to give contracts to staff who pay their own national insurance contributions and tax as self employed people?
No, but it is worth getting contracts drawn up for anyone who is likely to work with you for any length of time. It is increasingly common for ‘self-employed’ workers to claim that they have been an employee all along and seek compensation at the end of the relationship. A well written contract can defeat such claims.

3. Do I have to tell an employee why I am dismissing them?
Any employee with more that one year’s service can request, and is then entitled to receive, a written statement of the reason for dismissal. The request can be oral or in writing. If you fail to provide the statement, an employment tribunal can order you to pay over £900 compensation.

4. How much compensation can be awarded for unfair dismissal complaints?
For any dismissal effected after 31st January 2006, the maximum compensation award increases to £58,400.

5. Does everyone have the right not to be unfairly dismissed?
No. The right to complain of unfair dismissal only arises after one year of service.

6. Does that mean I can dismiss anyone in their first year without worry of an unfair dismissal complaint?
Not quite. There are exceptions to this rule. For example, dismissals related to pregnancy or other unlawful discrimination, or because an employee has tried to assert statutory employment rights will always give an employee the right to complain, regardless of length of service.

7. What are the minimum statutory dismissal procedures that I’ve heard about?
This is essentially a three step process: step 1 - providing a written statement of the reasons why dismissal is being considered; step 2 - holding a meeting with the employee and step 3 - allowing an appeal against the dismissal decision.

8. Is there any penalty for failing to go through the minimum statutory dismissal procedures?
If an employee has more than one year’s service, the dismissal will automatically be regarded as unfair and, as a penalty, any compensation award can be increased by up to 50%.

9. Can I ignore dismissal procedures for employees with less than one year’s service?
Yes and no. Yes, because if you don’t owe the employee any money, for example because you make good any payment in lieu of notice or outstanding holidays, then a 50% increase on compensation of nothing will still be nothing. No, because it is often wise to establish and record a reason for dismissal which does not fall within one of the exceptions where length of service is irrelevant.

10. Must I consult over any proposed redundancies?
Yes. Although employees with less than two years’ service are not entitled to any statutory redundancy payment, a dismissal by reason of redundancy is still a dismissal. That means an employee with more than one year’s service can complain that a decision to dismiss, made without any consultation, was unfair. Consultation will include consideration of, for example, selection criteria and possible alternatives to dismissal. No matter how unavoidable the decision may seem to you, it is rare that an employment tribunal will say that a dismissal without consultation was fair.

11. Are there any minimum periods of consultation necessary?
If you are proposing to make 20 or more employees redundant, there is a minimum statutory collective consultation period of 30 days; if 100 or more, that is increased to 90 days. However, whether making one or 100 redundancies, the general rule is that consultation should be in good time to enable it to be effective. The longer you allow, the more difficult it will be for an employee to argue that consultation was not genuine or in good time.

12. When will I have to worry about age discrimination?
Don’t worry, but do review all company literature, external and internal, now. Although discrimination on grounds of age becomes unlawful only from 1st October 2006, tribunals may be unlikely to accept that your organisation has changed over night if behaviour and policies in existence throughout 2005 illustrate ageist attitudes.