Understanding The Basics Of Employment Law
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Whether big or small, just starting out or expanding, employment law is a complicated area that can trip anyone up if they’re not careful.
The fact is that, the employment relationship is one of business’s greatest threat of liability, and not getting to know statutory regulations and implementing them with care can result is hefty payouts. What’s worst about it all, however, is that any such problems can be avoided with a little foresight and effort on your part, and advice and guidance on behalf of the professionals.
In this short guide, we’re going to help you get familiar with the main elements of employment law. Consider it contents to ensure you have the basics covered and that you, your business, and your employees are protected.
Recruitment and discrimination
The key areas of recruitment law include potential discrimination, criminal records checks, the right to work in the UK, and data protection.
Discrimination applies throughout the whole length of employment. But it’s important to stress that from day one, you're liable. Any prejudice or bias in hiring — whether conscious or unconscious — can result in penalties.
With such severe consequences, it's vital to maintain records of all your hiring processes. Employees and candidates can request to see records of why you chose one over the other at any time. And, as a result, employers need to prove their focus was on the requirements of the job, regardless of sex, age, disability, marital status, etc. These are clear examples of where someone could be directly discriminated against.
However, you also need to be careful to avoid indirect discrimination. Indirect discrimination can occur if certain groups become at a disadvantage due to a 'provision, criterion, or practice’ that you’ve applied. What's more, the laws around discrimination involve many other specifics, including the victimisation of employees who’ve made a claim against you and your responsibility in investigating and resolving discrimination among employees.
From the moment a candidate accepts an offer of employment, although it may not yet be in writing, a contract is established. It’s essential, to be clear when an offer is being made, and when it's not yet being made, and then to write and deliver it within two months of this time. The written contract needs to include everything from the job title, job description and working hours to pay, holiday entitlement, and place of work.
As well as protecting employees, carefully drawn up employment contracts protect you too. For instance, they should include a clause that state the contract is conditional on the prospective employee providing adequate evidence like references. They should also stipulate that you reserve the right to amend the job description and the place of work in the event of relocation.
Working hours, leave, and pay
There are many detailed statuary requirements around working hours, leave, and pay, to which every business must adhere.
Starting with working hours, most employees, as default, don’t have to work more than 48-hours a week on average. With employees that have no fixed place of work, this includes time spent travelling to the first and last client of the day. Employees can agree to surpass this limit and work more hours, but it must be put in writing. This is what's known as an opt-out agreement.
The basic laws around rest and leave time starts with an employee’s right to at least one 20 minute break for every 6 hours of work and a minimum of 5.6 weeks paid leave a year. They get a little trickier, however, when considering working parents, flexible working agreements, and entitlements for specific types of employees, including those on, maternity, paternity, shared parental or adoption leave, unpaid parental leave, or leave for family reasons. It's important to note here too that part-timers hold the right to be treated like full-timers, say in receiving holiday on a pro rata basis.
Employment law ensures employees are compensated for the work they’ve done and, in many cases, expected to do. Currently (as of April 2017), the minimum National Living Wage for employees under 25 sits as £7.50 an hour. There are lower rates for younger employees as well as those who are enrolled in an apprenticeship, and whatever the rate, it doesn't include tips, gratuities, and cover charges.
As an employer, you must also give each employee a detailed wage slip — including details of gross pay, itemised deductions, and net pay — and deduct tax and NI contributions from their wages. You can do the latter using HM Revenue and Customs’ (HMRC) PAYE Online service. It was set up specifically for employers to send payroll reports to HMRC and pay any tax and NI contributions they owe.
Employee rights, dismissals, sickness, and disciplinary issues
As in areas like discrimination and holiday, employees have many other rights which automatically come into force under any contract of employment.
Some of these — under no circumstances — cannot be overridden by the contract. For example, the obligation to uphold a relationship of ‘trust and confidence’ between employees, the requirement to provide a safe, secure, and healthy working environment, the right for employees to have a reasonable degree of privacy, and the right to belong or not to belong to a trade union.
Employees also reserve the right to blow the whistle on employer’s wrongdoings. And in the case they are sacked or demoted for doing so, they can sue for full compensation up to an unlimited amount. Unfair dismissal can also come into play if an employee loses their job as a result of the business changing hands. In most cases, employees are entitled to keep their jobs under the same terms and conditions as agreed to in the original contract. (TUPE)
As a rule, employers must prove ‘good cause’ for dismissal. This could be, for example, persistent or gross misconduct or an inability to do a job due to frequent or prolonged absences. These grounds for which employees can be dismissed must be detailed in a company’s disciplinary and grievance procedures. Disciplinary procedures should enable employees to successfully make a dispute, include what offences merit disciplinary actions, and be designed to be ‘fair and reasonable’ in line with the Acas Code of Practice. The basic payout for unfair dismissal is up to £14,470, with no statutory upper limit on cases related to discriminatory reasons.
Another key area associated with dismissal is the notice period. The statutory minimum for noticing employees of a termination of contract is one week (after one month's service). This rises to two weeks after two years, and up to a maximum of twelve weeks after twelve years. Employers may choose to set a different length of time than the statutory amount, known as contractual notice, providing it meets the minimum notice period.
Similarly, when it comes to sick pay, they are also two types: company sick pay (also called contractual or occupational sick pay) and Statutory Sick Pay (SSP). Employers must pay the latter to all qualifying workers — including full-time, part-time, agency, and casual workers — regardless of their length of service. Statutory Sick Pay is currently £92.05 per week (2017/18) and can be paid for up to 28 weeks. Employees qualify for SSP after being off for more than four days in a row.
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