7.1. Law - Employment law

Getting it right

Employment law is a complex area that is full of pitfalls. Getting it right means keeping in touch with developments, thinking out your policies and implementing them with care. Getting it wrong is easier, but could be extremely expensive.

In this briefing, we identify the main elements of current employment law likely to affect small to medium-sized businesses. It is intended as an introduction and an aide-memoire. There are cross references to other Directors’ Briefing titles that examine each area in greater detail.

The briefing covers:

• Recruitment.
• Terms and conditions.
• Employee rights.
• What to do when things go wrong.

A year of changes

This briefing provides an overview of the developments in employment law in the year 1999 that are most likely to affect small and medium-sized companies.

A separate briefing, New employment law in 2000, LA 8, covers new laws, regulations and relevant cases in 2000.

Developments in many other areas of business law, including tax, are covered in New business law in 1999, LA 7, and New business law in 2000, LA 9.

These briefings provide pointers to changes that might affect your business, but do not deal with issues in detail. If you need to know more, talk to your professional adviser, or follow the cross reference to the appropriate Directors' Briefing.

This briefing covers:

• New laws.
• New regulations.
• Key court and tribunal cases that highlight small business issues.

Case law sets the pace

This briefing provides an overview of the developments in employment law in the year 2000 that are most likely to affect small and medium-sized companies.

A separate briefing, New employment law in 1999, LA 6, covers new laws, regulations and relevant cases in 1999. See the margin note on page two for a list of the material covered in that briefing.

Developments in many other areas of business law, including tax, are covered in New business law in 1999, LA 7, and New business law in 2000, LA 9.

These briefings provide pointers to changes that might affect your business, but do not deal with issues in detail. If you need to know more, talk to your professional adviser, or follow the cross reference to the appropriate Directors' Briefing.

This briefing covers:

• New laws.
• New regulations.
• Key court and tribunal cases that highlight small business issues.

Keeping track of changes

This briefing provides an overview of the developments in employment law in 2001. It follows publications covering the same area for 1999 (LA 6) and 2000 (LA 8). Developments in business law more generally are covered separately, in New business law in 2001, LA 13. There are titles covering the same area for 1999 (LA 7) and 2000 (LA 9). These briefings identify changes that might affect your business, but do not deal with issues in detail. If you need to know more, talk to your professional adviser, or follow the cross reference to the appropriate Directors’ Briefing.

This briefing covers:

• New laws.
• New regulations.
• Key court decisions, in areas important to small businesses.

This briefing outlines the developments in employment law in 2002 that are most likely to affect small and medium-sized businesses. It follows publications on the same area for 1999 (LA 6), 2000 (LA 8), and 2001 (LA 12).

Changes to business law more generally are covered in New business law in 2002, LA 16. There are titles covering the same area for 1999 (LA 7), 2000 (LA 9), and 2001 (LA 13). These briefings identify changes that might affect your business, but do not deal with issues in detail. If you need to know more, talk to your professional adviser, or follow the cross reference to the appropriate Directors’ Briefing.

This briefing covers:

• New laws.
• New regulations.
• Key court decisions in areas important to small businesses.

Be clear

A contract of employment exists as soon as an applicant accepts your offer of employment. A clear, reasonable contract helps you to ensure that the employee understands what is expected, and to minimise the risk of disputes.

At the same time, you need to understand what your contractual obligations are, and what terms you can (and cannot) enforce.

This briefing outlines:

• The basics of employment contracts.
• The content of the written statement.
• What else forms part of the contract.
• Key issues to consider.

Avoiding problems

Contrary to popular wisdom, fair-minded employers have little to fear from employment protection legislation.

The issues are fairly straightforward and most problems can be avoided by following a few simple rules.

This briefing outlines:

• Dismissing employees for misconduct.
• Other forms of 'fair' dismissal.
• Unfair, unlawful and wrongful dismissal.
• Handling complaints.

Survival surgery

Redundancies are a fact of life in the smaller business, where carrying surplus staff is a short cut to disaster. A shift in the economic or business climate, a merger or a move to a new location can all make redundancies inevitable.

Redundancy is a complex issue, full of pitfalls. To avoid falling foul of employment tribunals, it is essential to follow demonstrably fair procedures.

This briefing covers:

• The timetable and procedure to follow.
• How to choose who to make redundant.
• Calculating statutory redundancy pay.
• How to avoid legal and practical problems.

Fair play

Although employees and employers can now choose to follow an alternative dispute resolution procedure, most employee complaints are still heard at an employment tribunal. You need to take tribunals seriously. If you have well-thought- out procedures, and follow them, you can prepare good evidence, making it easy to defend your actions.

The interpretation of employment law is moving in favour of the employee, and awards are increasing, so it is important to understand the system and the way tribunals operate.

This briefing covers:

• The tribunal process, from start to finish.
• How to defend a case.
• How to prevent disputes arising.

Do the right thing

Discrimination against any employees on any grounds other than their ability to do the job is a bad idea – and could also be illegal.

If an employee or potential employee brings a discrimination case against your business, you could be tied up in costly, time-consuming and unproductive legalities for months. If they win, you could be liable for unlimited damages.

This briefing explains:

• Which areas of discrimination are covered by law.
• What constitutes discrimination.
• How to cut the risks of unintentional discrimination.
• What to do if a case is brought against you.
• Legal exceptions.

Pay attention

Regulations covering working hours and minimum wages apply to almost every business.

Working time regulations aim to improve health and safety by controlling the hours employees work, while it is illegal to pay less than the minimum wage.

This briefing covers:

• The rules governing working hours, rest periods, annual leave and night work under the working time regulations.
• The minimum wage.
• How to keep your paperwork in order.
• How the regulations are enforced.

Your staff have a legal right to a minimum amount of paid annual leave. And working parents can often take different types of time off for the birth and care of their children. This briefing sets out your employees’ rights and your duties towards them.

It covers:

• Holidays.
• Maternity leave.
• Other ‘family-friendly’ leave entitlements.
• Time off for dependants.