Small Business Employment Law For Dummies

Liz Barclay

• Publisher: For Dummies
• Year: 2011
• ISBN:
  9781119998129
• Edition: 1
• Topic: Business
• Subtopic: Small Business
• Index: Business

Includes sample documents for clear guidance and inspiration Understand your rights and responsibilities as an employer British small business owners can't afford to learn from their mistakes, especially as regards employment law. This book keeps you onside with the law and onside with your staff too. From hiring and firing through to dealing with wages, pensions, and maternity leave, you'll discover what to do, what not to do, and how to get it right first time. Discover how to
* Recruit and retain a happy workforce
* Draw up a fair employment contract
* Understand Health and Safety Laws
* Make redundancies the right way
* Manage staff holiday and disciplinary issues

Part I

Hiring and Firing

In this part . . .

I explain who has rights under employment law. I take you through the process of recruiting, from advertising or using an agency, to interviewing and checking references and convictions. The contract between you and your employees may be in writing, or some may be written down while the rest is implied. Written down or not, a contract exists from the moment you make a job offer and the candidate accepts it; so if you’re about to employ your first member of staff or replace someone who has left, this is the place to start.

I then look at why you might want to get rid of employees by making them redundant, because you don’t have any work for them, or firing them because they’re incompetent or have been guilty of some unpardonable behaviour.

The idea is to stay on the right side of the law at all times so that you don’t end up in front of a tribunal panel accused of unfair dismissal, discrimination, or having selected the wrong person to be made redundant. Be forewarned!

Chapter 1

Staying on the Right Side of the Law

In This Chapter

Understanding your employees’ rights under the law

Knowing who’s an employee and who isn’t

Determining the kinds of workplace policies you need to draw up

Managing without a whole lot of support systems

As a small business employer or in the management level of a small company, you may feel that staying on top of the law is just too much hassle. As long as you don’t do anything blatantly illegal, everyone should be content. After all, you’ve got a business to run and you have to make a living. While that’s true, if you get on the wrong side of the law the results can be devastating. You can end up seriously out of pocket because a tribunal or court finds in favour of a disgruntled, or even worse a seriously injured, employee and awards large amounts of compensation against you. Tribunals can award anything from a very basic amount up to a maximum of £56,800 in unfair dismissal cases (see Chapter 4). But if they decide that you’ve discriminated against someone (see Chapter 13) when you’ve dismissed them or made them redundant there’s no cap on the amount of compensation they can award. If they find that you didn’t follow, to the letter, all the new dismissal and disciplinary procedures that came into force in October 2004 (see Chapter 15) they can increase the compensation they order you to pay and there’s no upper limit in the case of a workplace accident or illness claim (covered in Chapters 10,11 and 12). Many small businesses can’t recover from that kind of a blow.

But it isn’t only the financial penalties that can be seriously damaging. When a dispute or an accident occurs in the workplace it affects everyone, not merely the employee directly involved. People lose trust in an employer if they see that things aren’t run properly and safely, or if the employer has no real respect for workers’ rights.

Employers frequently struggle to find suitable employees or have to train applicants from scratch. You can’t afford to lose employees because they have no confidence in the way your business is run. It costs a lot of money to recruit staff and train them. The more often people leave, the more time you spend fire-fighting instead of improving performance and increasing productivity.

Small business owners are always worried about the amount of legislation that applies to them. There are a lot of laws, regulations, and codes of best practice out there, and staying on the right side of the law can be a tough job. Knowing what the law says before setting up a business or before employing your first member of staff is important, and if you start out with all the information you need, it’s not as difficult or expensive to apply the law as you go along – and take it into consideration each time you make a business decision. Changing your habits later on can be much trickier.

Good employment practices encourage good employee–boss relationships. In turn that breeds loyalty and staff stay. People who are loyal work better. They have the interests of your business at heart because you have their interests at heart. Everyone’s a winner.

Cutting Through the Red Tape

‘Red tape’ is a term that conjures up images of bad regulations, strangling your business and making your life more difficult. Commentators sometimes blame the employment laws in the United Kingdom for putting too heavy a burden on business owners, but they’re really intended to protect employees from bad employers, not from good ones. These laws also help employers protect themselves.

The law isn’t a burden to good employers who want to do right by their employees; it’s a source of clear guidance that helps you to keep employees instead of losing them to better employers. When hard workers with the skills you need seem hard to find, your business’s success depends on your reputation as a desirable employer; rather than seeing the law as just so much red tape, think of it as a guide to becoming that kind of desirable employer.

Business people most often cite the National Minimum Wage and family friendly legislation about maternity, paternity and parental leave as causing them difficulties. Yet motivated employees who feel fairly paid and who know they can take the time needed to take care of family matters can increase your company’s productivity so it’s well worth your investment in sound policies. You can read more about making sure your business complies with the National Minimum Wage in Chapter 16 and maternity, paternity, and parental leave in Chapters 9 and 18.

Perhaps the biggest problem is that the legislation relating to small businesses is scattered around so many acts and regulations that keeping a grip on them can be difficult. Some acts, like the Data Protection Act or the Regulation of Investigatory Powers Act 2000 (detailed in Chapter 14), have such a wide scope that it’s easy to forget that they can apply to small businesses and their employees. The headache isn’t always so much the red tape as pulling it all together and knowing exactly what it means for your business.

Working Out What the Law Expects from You

Working out what the law expects from you can sometimes be quite demanding. Most employers wait until something has gone wrong or an employee has taken legal advice and made a claim against them before checking out where they stand legally. But forewarned is forearmed when it comes to small businesses and the law. If you’re setting up a business or about to take on your first employee, this is the time to get advice on your legal position. If you already employ people and you haven’t put a lot of thought in...

Table of contents

• Title
• Contents
• Introduction
• Part I : Hiring and Firing
• Part II : Working Hours and Taking Time Off
• Part III : Keeping Your Workers Healthy and Safe
• Part V : Paying Up – Everything to Do with Money
• Part VI : The Part of Tens