When you start taking on employees you will be faced with a fair amount of legal responsibilities. It’s important you understand all your obligations as an employer as if you don’t comply with UK employment law you can easily find yourself in front of an employment tribunal.
See also: Five areas of employment law small businesses must be aware of
You, the employer, must provide the written statement within two calendar months of the employee starting work.
- The name of the employer and the employee
- The employee’s start date, taking into consideration previous periods of employment which are counted
- The job title and brief description
- The pay which the employee will receive and how often it will be paid
- The hours which the employee will work, the place of work and end date if applicable
- The holiday, sick pay and pension entitlement provisions
- The length of notice required from the employer and the employee
- Disciplinary and grievance procedures
An employer may include information on other terms and conditions relating to employment, for example, notification of absence procedures, information about benefits, etc. and it is useful to include these in a separate employee handbook.
If you don’t do this, the employee can make a claim at an employment tribunal where compensation of 2-4 weeks’ pay may be awarded.
Also, if the employee has to ask for their employment contract this is called, “asserting a statutory right”, which could give rise to another claim.
Other key types of small business employment contract
Part-time employment can be appealing for those with childcare commitments, or other outside responsibilities.
A part-time worker works fewer contracted hours than a full-time employee.
However, part-time workers generally also hold permanent positions and their contracts contain many of the same details as their full-time counterparts. The number of hours they’re scheduled to work per week should be clearly visible within the contract but they may have the option to work overtime, if and when desired.
It’s important you don’t treat part-time staff any less favourably than your full-time colleagues.
This ruling is in the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000. It’s otherwise known as the part-time workers regulations.
For example, part-time workers can receive the same amount of holiday as a comparable full-time worker on a pro-rata basis. The same principle also applies when it comes to calculating holiday pay for part-time workers.
This contract includes an end date at which the contract will terminate. These are often used for an employer who require staff to complete a specific project after which there is no need for an employee to remain, or they are used for maternity cover.
Depending on the role, and an individual’s performance, fixed-term contracts can sometimes lead to longer-term positions.
Similar to fixed-term, temporary contracts are offered when a contract is not expected to become permanent. Benefits of temporary contracts include increased flexibility and the ability to manage work around study or other interests.
However, unlike fixed-term contracts, temporary contacts can be flexible when it comes to an end date.
Despite their short-term status, temporary workers are entitled to the same rights as any other member of staff.
Agency staff have their contracts agreed and managed by a recruitment consultancy or employment agency. They usually work on a temporary basis, and the length of their contract will depend on your needs as an employer, as well as their availability.
It is the agency’s responsibility to make sure their employees’ rights are protected. However, National Insurance contributions (NICs) and statutory sick pay will be paid by you, the employer, to the agency.
Freelancers and contributors
If you hire a freelancer, consultant or contractor it means that they are self-employed, which means they look after their own tax and National Insurance contributions (NICs) and they might not be entitled to the same rights as full-time or part-time/fixed-contract workers. However, you are still responsible for their health and safety.
Also known as casual contracts, zero-hour contracts specify that an employee works only when required by you, the employer. This is a contract that provides the utmost flexibility to you the employer if you cannot guarantee any level of hours to be worked. As an employer, you are under no obligation to provide a set amount of hours to work. And, similarly, the employee does not have to accept any work that is offered to them.
Zero-hour workers are, however, entitled to the same annual leave as permanent workers, and the employer must pay them at least the National Minimum Wage to work. And you are still responsible for health and safety of staff on zero-hours contracts.
How do you draft different employment contracts?
A contract of employment is a vital element to the employment relationship which all businesses must provide, so it is important that employers provide contracts which reflect their company, policies and culture.
Draft your own small business employment contract
The best way to get a contract which you can use with your employees is to draft one from scratch.
Pros: A self-drafted contract will be tailored to fit your company and reflect the policies and practices implemented in your workplace.
Cons: It may be time-consuming and some employers may not be aware off all the legal requirements which govern a contract.
Download an employment contract online
Pros: A much quicker and easier method than creating your own contract. You can have a contract on hand within a few minutes after a quick search and a few clicks.
Cons: The legal substance of contracts can quickly become outdated, and it can be extremely hard verifying whether the document you have downloaded is legally compliant. Even if the employment contract template you find is recent, it is often a mystery who the author is and whether they have any legal background and knowledge.
These types of general contracts will not fit most businesses and industry specific requirements.
Employ a solicitor
Pros: Solicitor drafted contracts are made to reflect your business. Solicitors have a profound knowledge of the law in the area in which they specialise and will be aware of industry-specific requirements. Employers can be sure that the contract they receive will be legally compliant.
Cons: This method may be costly and may not suit small businesses which may not be able to afford the fees.
Use an HR Consultancy
HR consultancies – such as Peninsula– work with a number of businesses in a variety of sectors and can provide a wide range of services to companies of all sizes.
Pros: Businesses can benefit from the different expertise and knowledge of a number of advisers. Contracts are drafted quickly as advisers are kept up to date with legislation. Contracts are also tailored to each company, understanding their business and reflecting their nature. As businesses are often long-term clients, contracts are updated when legal changes come into force, so businesses can be assured their documentation complies with all current employment regulations.
Cons: Some consultancies only offer one-off services such as drafting initial employment contracts with no follow-through if a small business employment contract needs to be redrafted or employment legislation changes.