Care Always Required With Redundancy

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At school in days past, it was a common joke to say you were learning the three r’s: reading, ‘riting and ‘rithmetic. But, in times of economic downturn, it’s common to learn a more chastening lesson about the two r’s: recession and redundancy.

Global recession has made redundancy a fear for many, and a lamentable fact for others. Naturally, there will be a rise in disputes over redundancy, so it pays for employers to make sure they are fully versed in their redundancy policies and procedures.

With statutory redundancy pay in place, there is less concern over pay-outs: these will be itemised and explained and follow fairly clear-cut procedures regarding maximum level of pay-outs, qualification periods and amounts payable without tax.

Problems are more likely to occur with employees feeling they have been treated badly or that their job isn’t been made redundant for the right reasons.

As a form of dismissal, redundancy can occur for many reasons: new technology making certain tasks redundant; relocation of a business, cost-cutting due to reduced revenues or the job you were employed to do has ceased to exist, which can itself be caused by numerous reasons.

Redundancy can be hugely distressing for some employees, and can understandably provoke an emotional response. After all, when someone is hit by the worry of how they’re going to feed their family or pay their mortgages to the way they’ve become used to, with a salary which is about to cease, it’s often difficult to be objective about ‘business needs’.

That’s why there is an onus upon employers to tread carefully, sensitively and follow procedure. Consultation needs to be carried out, with employees facing redundancy allowed to have their input and suggest alternatives. Failure to provide consultation can lead to unfair dismissal claims.

Another area for potential problems comes when a proportion of staff are being made redundant. Objective and fair assessment needs to take place backed by evidence throughout this process.

Beliefs that the criteria was unfair or people felt their selection was far from objective due to a misplaced comment or skewed criteria can again lead to unfair dismissal claims. And, the need to find alternative employment if it exists can also be highly controversial, with staff feeling demoted or pushed into unsuitable roles.

Clearly, there are sensitive footfalls to navigate, which is why guidance from correct procedure and being able to generate a papertrail of all communications with staff regarding redundancy is absolutely vital.

Papertrail, with its comprehensive and updated employer guidelines and unique ability to record trails digitally, is ideally placed to help employers comfortably traverse the often complex and contentious redundancy procedures, which sadly are often all too commonplace during periods of recession.

Bringing Businesses to Book – Online Staff Handbooks

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Papertrail will be a one-stop shop for all online employment template needs, providing protection for the employer and reference for the employee.

And, a key facet of both these particulars comes from the employee, or staff, handbook.

Legally, an employer needs only to provide a written statement of the key terms and conditions of employment.

But best practice – the kind of practices that can save employer’s from costly legal bills – favours the creation of full employment contracts and staff handbooks.

After all, companies like Papertrail have taken the headache and costliness out of embodying such good practice by providing online employment contract solutions.

Benefits of a Staff Handbook

As with the employment contract, the staff handbook makes clear – in more exhaustive and comprehensive detail than the contract- the policies, procedures and regulations at an employee’s place of work.

The provision of a staff handbook may not be a statutory requirement but it’s a sensible offering from the employer, helping to remove ambiguities by clarifying every aspect of the employment relationship down to the most minute aspects, such as pay and working hours, holiday entitlements, health and safety regulations, sickness regulations, security at work, and disciplinary and grievance procedures.

Such an outline not only helps protect the employer by documenting their compliance with employment law, it helps the employee to have a clear reference manual about all aspects of their working conditions.

Online Staff Handbooks

Given the clear benefits of bringing a business to book, namely having a comprehensive staff handbook, why do so many small and medium enterprises continue to operate without one?

Part of the answer is in the question, namely ‘comprehensive’. When there’s no legal obligation to provide a staff handbook, it can seem overly arduous to map every aspect of the employer-employee relationship.

Added to this, the mapping may soon be out-of-date if it references statutory aspects of that relationship which are subject to change.

Finally, there’s the cost of producing all this material – paying someone to write it, then have it printed, along with, possibly, an employment specialist to check it – which can prove a final and fatal obstacle to some businesses.

At least, it could until now.

The beauty of online staff handbooks, as will be provided by Papertrail, is they can take all this pain and procedure away at a minimum of the previous costs.

Now, there is little excuse not to embody best practice and provide all employees with a staff ‘bible’ to cover all aspects of the employment relationship - especially when this added transparency could reduce potentially costly conflicts in the workplace.

Preventative pain relief for HR Headaches

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Small medium enterprises are often at a huge disadvantage to their corporate brethren – they can’t afford a large, dedicated Human Resources department.

In the corporate world, there is always someone on hand to take you by the hand, and brief you before any sensitive conversation with a member of staff, concerning, for example, their productivity – or rather lack thereof – or their habit of being sick every Monday.

Managers are told what to say and how to say it, minutes are recorded to be forwarded to HR: everything is planned and premeditated to avoid any costly, legal comebacks – set procedure is always to be followed.

Further, employment law is a moving feast. New governments come and go each leaving a trail of new employment legislation from seismic changes to less spectacular change such as permitting more ‘frank’ conversations about certain sensitive subjects.

These changes are seamlessly integrated into employment procedures by HR – or should be – so managers can behave accordingly, non-the-wiser for changes in legislation.

But, even in the corporate world, well-staffed, well-versed HR departments can be an unaffordable luxury for many, especially in today’s tough trading conditions.

This leaves the non-corporate player with a number of headaches. Firstly, day-to-day interactions with staff can be a potential, litigious minefield. You may have, correctly, shifted your employees towards improved performance by introducing new goals and guidelines, but have you followed every step correctly to challenge non-performers without ending up at a tribunal?

And has every step been properly documented so you can prove that you’ve followed every step? To reduce such risk exposure, it’s common to seek the help of an employment lawyer or employment specialist, but do you have one on tap for every new initiative?

If you’re using them ad-hoc, is every pertinent point of new legislation channelled into current practises? And, how much time are you spending liaising or fretting about the minutiae of workplace legislation rather than doing what you excel at, running your own business?

These problems are commonplace, and as is equally common, when there are problems, it creates market demand. And where there’s market demand, solutions do become available.

Papertrail is such a solution, designed as pain relief for the headaches described above. Like other online solutions, it allows small and medium enterprises to take advantage of their own virtual HR department, generating relevant and bespoke employment documentation.

This clearly saves costs but would provide only partial pain relief as there’s still exposure to legislative changes to consider.

Plus, you may have all the guidelines in place but are they followed in a sufficiently robust manner to stand scrutiny at tribunal? These latter points are Papertrail’s own points of difference, providing full pain relief for all your HR headaches. And, that’s not just a cheesy ad-slogan.

The documentation is constantly updated by their own team of employment legal specialists, so you have access to the relevant, right material.

And, uniquely, the system allows for digital signatures to be recorded so there’s an audit trail for sensitive communications with staff. Ultimately, it is like having your own HR department at hand – just without the huge cost.

Why Employment Contract Templates Work

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If there’s a problem with your boiler at home, you call a plumber. After all, without their expertise and experience, trying to fix it yourself could lead to greater costs than those you were trying to save by not calling in a specialist.

Similarly, creating your own Employment Contract, can prove extremely costly. Make a fundamental mistake in traversing certain complexities, and legal costs could be a dire consequence.

It is imperative Employment Contracts are drafted properly but their creation can be prohibitive in price, whether that be cost or time spent on their creation, which is way certain Employment Contract templates prove a viable option.

Pre-prepared Employment Contract documentation save employers’ valuable time, and, ideally, will be designed with the requisite expertise in their DNA , satisfying all the legal requirements imposed by the Employment Act, 1996.

But, you need to be certain your chosen employment contract template satisfies the correct criteria.

What is a UK employment contract ?

There are certain statutory requirements that employers must meet towards their employees, covered elsewhere in detail on this blog. If an employer expects an individual to be working for the business for more than one month, they must provide a written statement of terms and conditions of the employment. A UK employment contract must be issued within 8 weeks of the start date of the employee.

What is an employment contract template?

Employment contract templates are designed to be labour-savers, with the emphasis on ease of use and accessibility. They should be compliant with current employment legislation and help employers to prepare paperwork. Most come as part of a kit and offer background information on relevant areas of employment law including advice on interviewing, recruiting and other matters.

UK employment contract kits may include reusable employment contract templates for different employment roles including full/part time employment, temporary/fixed term employment and even domestic employment.

Most should include an employee handbook, which can be tailored to each business. Employee handbooks cover key components, such as an employer’s Health and Safety policy, the Equal Opportunities policy, Dismissal and Disciplinary policies and procedures and Grievance procedures. Depending on the employment template kit, there could also be additional letters and forms that make the hiring of staff simpler, covering areas such as:

  • Alteration to Terms of Employment
  • Documents as Evidence of Entitlement to Work in the UK
  • Employment Application Form
  • Invitation to Interview Letter
  • Nanny Job Description
  • Offer of Employment Letter
  • Rehabilitation Periods
  • Rejection After Interview Letter
  • Rejection Before Interview Letter
  • Request for Reference Letter
  • Prescribed Statement re: Sunday Shop Work
  • Staff Handbook
  • Working Time Regulations Opt-Out Agreement

The benefits of UK employment contract templates

The key benefit is peace of mind in navigating what can be a complex area of law. Filling in the standard forms is simple and the instructions are easy to follow. Although these UK employment contract template kits should have been drafted by a team of lawyers and HR professionals, you must ensure that compliance with UK employment legislation is guaranteed.

Solutions that take the strain and pain out of Employment Contracts

The Paper Trail Employment Contract system by Presolved offers a full online solution and their in-house team ensure that as legislation changes your documents do not become dated. This can be a critical problem that often leads to employers falling foul of employment legislation and wishing, when facing a costly and time-consuming legal case, they had used companies like Presolved.

 

 

ACAS and Employment Contract Disputes

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The Advisory, Conciliation and Arbitration Service – commonly known as ACAS – is often the first port of call when trying to resolve conflicts in the workplace between an employer and employee prior to legal action.

ACAS is an independent UK body whose remit is to improve the working lives of employees and organisations through employment relations. They provide advice to employers on improving working practices and will offer help to employees to resolve legal disputes such as perceived breaches of employment contract.

An Employment Contract, whether verbal or written, is a legally binding agreement between an employer and employee. However, there may be times when either party believes the other party to be in breach of contract, precipitating dispute.

An employee who feels their employment contract has been reached, for example, being asked to work more hours without prior agreement, should always first check their employment contract, then try to gain resolution with their employer or line manager. Only when this isn’t possible, should an employee think about bringing in ACAS ahead of any legal action.

How ACAS can help

Resolving the dispute by recourse to the courts or employment tribunal can be cost and time-consuming, leading to mediation by ACAS as an attempt to prevent legal recourse when agreement cannot be reached. This process of conciliation is free but requires agreement by both parties to undergo the process.

The role of an ACAS mediator will be to show both employer and employee the legal issues behind the breach of employment contract, show what procedures will take place if the employment contract dispute goes to tribunal, show any possible grounds for settlement between the parties, and help to devise a new binding legal agreement should settlement over the employment contract dispute be possible.

As a neutral in the dispute, the mediator’s sole focus is brokering agreement between employer and employee in the breach of employment contract dispute.

Benefits of Using ACAS to Broker Agreement

There are a number of reasons why breach of employment contract disputes can be better served by undergoing conciliation with ACAS.
• Conciliation can save time and money for both the employer and employee. Legal disputation over employment contracts requires building cases and defences, and outcomes are by no means certain for either party, with one potentially having to foot a costly legal bill
• Using ACAS proves to be less stressful than fighting a legal case for both parties.
• A negotiated outcome by ACAS could be to the satisfaction of both parties, with a new agreement to the employment contract being drawn up. Such amicable agreements are rare with legal disputes, which tend to have a winner and a loser
• Both parties still have an element of control in resolving the dispute. This control is lost when recourse is taken to a tribunal or a court.
• Timely resolution of the employment contract dispute. Sometimes a mediator can affect an agreement over the employment contract dispute after a few meetings, saving a long, drawn-out legal dispute. These meetings may be done separately or with both parties present, but both provide speedier outcomes than otherwsie would have been possible.

Employment Contracts: Know your Rights

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Statutory Rights and Employment Contracts

All employees in the UK have certain employment rights enshrined in law. These are known as Statutory Rights, and it’s important for employers and employees to be aware of these rights to prevent or resolve any legal infringements.

Some Key Statutory Rights

• A statement in writing of the terms of employment

• An itemised statement of pay, including gross pay, net pay, any deductions, and amount   and method of payment.

• Compensation payment for redundancy

• Not to face unfair dismissal

• Not to face discrimination because of gender, race, sexual orientation, disability, age,   religion, religious belief, and membership or non-membership of a trade union.

• Maternity leave, maternity pay, and no unfair treatment due to pregnancy

• Notice of termination of contract

• Healthy and safe place of work

• Statutory sick pay in accordance with certain conditions

Employment Contract Rights

Employers and employees can agree to many rights beyond statutory legal rights, but an employer must never offer less than statutory legal rights. There exists automatic entitlement to legal rights regardless of the conditions written into the employment contract. If an employee thinks their legal rights are being violated, then they should seek advice to verify the violation before approaching their employer.

Employment Contract and Probationary Periods

It is often standard for an employee to start their employment on a period of probation. But what is less frequently understood, is while an employer can offer fewer rights than a fully instated employee, they cannot offer less than the statutory rights of any employee. And, any details of the differing rights of the probation period still need to be communicated verbally or in writing to an employee to be binding.

Summary

Whether on a probationary period or in normal employment, knowledge of your automatic entitlement to statutory rights regardless of Employment Contracts is vital for every employee. It is also vital knowledge for every employer to ensure their Employment Contract isn’t inadvertently violating any statutory rights.

Changes to Employment Contracts

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Changing an Employment Contract

Employment contracts are not fixed in stone but can be changed by either an employer or employee. Any change is conditional on agreement being reached by both parties.

Such agreement can be brokered informally after a conversation when neither party objects to the changes mooted. Alternatively, they may have to be brokered more officially via negotiation. It is vital for both employer and employee to prevent problems down the line by following correct procedures.

Why Employers Change Employment Contracts

There are many reasons why an employer may wish to change an employment contract: adverse trading conditions may lead to a need for longer working hours, or the ending of agreed pay incrementals; government legislation may require a redrawing of working conditions; or an employer may wish to re-locate or restructure their business. Regardless of motivation, changes typically necessitate an amendment to working hours, pay levels, duties and location.

How Employers can Change Employment Contracts

As previously stated, agreement is imperative to any redrawing of employment contracts.  The employer must advise the employee of planned changes and explain the rationale for these changes.  This consultation takes place either with employees directly or with their representatives such as a trade union or staff body.

They are also obliged to listen to any alternative suggestions from employees designed to meet the needs that are dictating changes to the employment contract. An employer cannot enforce the changes without agreement from the employee, however, failure to agree can lead to the employer terminating contracts and offering new contracts.

Depending on how this was handled, an employee can consult ACAS or their representative body to see whether this offer constitutes unfair dismissal.

Why Employees Change Employment Contracts

Ultimately, employers have more power when it comes to changing employment contracts unless they have violated statutory rights, in which case, employees have legal due process on their side. However, it is still possible for some employees to broker change.

How Employees Change Employment Contracts

They need to organise a meeting with their employer, attended by themselves or a representative, and detail the change desired, along with the rationale for that change.

The employee cannot demand change so it’s entirely due to the discretion of the employer, although lobbying for changes, by, for example, trade unions or staff bodies, can lead to industrial conflict in the workplace, and then an employer will decide whether the pressure being brought to bear should warrant change or whether they choose to withstand that pressure.

 

Breaches of Employment Contract

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Disputes in the workplace between employers and employees can be distressing, costly and detrimental to all concerned, so it is important to understand breach of contract.

The Employment Contract is a legally binding agreement between an employer and employee.

A breach of contract occurs when one or many of the agreed terms are viewed to have been violated by either party; for example, an employer asking an employee to work more hours without first negotiating agreement. Employment Contracts are not always written down, so this could be a violation of what has previously been verbally agreed.

 What to do if an Employer commits Breach of Contract?

An employee should first check their Employment Contract, if written, and try to resolve the matter directly with their employer. If they are certain a breach has taken place but they fail to gain agreement from their employer, then they should try to get the matter mediated by ACAS (the Advisory, Conciliation and Arbitration Service) or a staff or trade union representative.

Mediation tends to be tried before legal action as it tends to be quicker, less costly and less stressful than a legal case, with a trained mediator often being able to broker conciliation between the employer and employee. If mediation does fail to resolve the Employment Contract dispute, then a final recourse is to take legal action against an employer.

Due to the costs entailed, legal action should only be proceeded with if an employee is certain they can prove financial loss as result of breach of contract.  Legal action against employers tends to be pursued via employment tribunals or the civil courts. An employee can only pursue action through an employment tribunal once their employment has ended. An employment tribunal is a quicker, less costly way to achieve a resolution which is as legally binding as going to court.

There is no charge incurred in taking a case to an employment tribunal unless the employee is already paying a legal representative, however, if the case goes against the employee, then they will be liable for costs. The award an employment tribunal can give to a successful complainant is capped at £25,000.

It’s also important to note that an employment tribunal will only hear a case if it is within three months of an employee leaving employment or three months of the breach of employment contract taking place. If still employed, then civil courts are the only open legal path to take. While civil courts tend to take longer resolving breach of Employment Contract disputes, the awards they give are unlimited.

What to do if an Employee Commits Breach of Contract?

An employer should speak to the employee directly to try and get the breach of employment contract resolved. As with an employee, if any financial loss to the employer can be proved, they are entitled to make a claim against the employee for loss of earnings. Employers have to use county courts to sue against breach of employment contract unless an employee has already taken them to an employment tribunal, in which case, they can make a counter claim.

Damages will be awarded to the employer to compensate for any proven loss of revenue due to an employee’s breach of contract, for example,  an employee leaving without giving agreed notice, an employer can sue for the cost of hiring temporary staff.

 

 

Is an Accurately Drafted Employment Contract Vital?

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The UK Employment Contract is an agreement between two parties where one agrees to work and the other agrees pay for that work. A UK employment contract doesn’t have to be written to be binding. However, any employer who fails to put the terms and conditions of the role of his or her employee in writing can effectively be playing with fire. Employers can leave themselves open to dispute and could, if the problem is incapable of being sorted out amicable, end up being dealt with by a tribunal. This can be very costly and time-consuming.

What can wrong with employment contracts?

Imagine for the sake of argument that you run a small business employing a number of workers. These people have worked for the business but the arrangement is informal, so nothing was ever put down in writing. They claim at some point that they are due for overtime payments dating back several months. The claim is based on a promise they say you made some time ago. You disagree with their contention, and therefore the case proceeds to tribunal. When the case comes to court, the judge will ask for proof of a valid written employment contract, or for the written terms of employment. As the business cannot provide this the chances are the court will find in the employees favour.

How can these situations be avoided?

Employers are obliged under section 1 of the Employment Rights Act, 1996, to provide as a minimum a written statement setting out the main terms and conditions of employment. This isn’t technically the same as a written employment contract, mainly because it doesn’t have to record all the terms and conditions. The statement has to be given to all new employees within two months of work commencing. Any employer who gives an employee such a statement will be looked upon favourably by the courts in cases of dispute, particularly if the employee did not question those terms at the time the statement was issued.

What should be included in a statutory statement of terms?

  • the names of the employer and the employee
  • the date when the employment (and the period of continuous employment) began
  • the level of remuneration and the intervals at which it is to be paid
  • the hours of work
  • the employee’s holiday entitlement
  • the entitlement to sick leave, including any entitlement to sick pay
  • details of any pensions and pension schemes
  • the entitlement of employer and employee to notice of termination
  • the job title or a brief job description
  • clarification about whether the employment contract is temporary: if it is, it must state the period for which the employment is expected to continue. If the employment is for a fixed term, it must state the date when it is to end.
  • the place of work or, if the employee is required or allowed to work in more than one location, an indication of this and of the employer’s address
  • details of the existence of any relevant collective agreements which directly affect the terms and conditions of the employee’s employment – usually referred to in the employee handbook.

What are the advantages of having a properly drafted written employment contract?

A properly drafted written contract adds certainty for both employer and employee. A statutory statement of terms is only evidence of what was agreed, whereas the employment contract itself will contain all the terms. An accurately drafted written contract will provide conclusive evidence about what the terms of employment are.

Many employers will want to insert anti-competition clauses into employment contracts. These are also known as restrictive covenants, and aim to restrict the employee’s activities for a period after their employment ceases: for instance it may preclude them form working for a competitor for a certain period of time, or from contacting any of the employer’s clients. Such clauses can be very effective, but they need to be drafted carefully and precisely. Otherwise they can prove to be impossible to enforce.

In certain industries there may be some disciplinary rules that need to be enforced rigorously. They may be so important that they will need to be written into the employment contract, for example road haulage industries will insist that employees are automatically charged with gross misconduct if they are found to have alcohol in their vehicles or test positive for a banned substance whilst at work.

From an employee’s point of view, having a written employment contract is also beneficial. They will have peace of mind from the outset. They may have to wait two months for the statutory statement, but they’ll know that every relevant term will have been included in the written contract. There may be generous terms like medical insurance or a compensation package to be paid on termination that do not form part of the statement.

The important thing to remember is that written statements and employment contracts have to be prepared and executed with care. Good advice is important, but properly drafted contracts are essential. Many companies now supply UK employment contract templates which make this process much simpler. They are drafted by experts and take all of the worry out of drawing up employment contracts.

 

 

How to Avoid Employment Contract Disputes?

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How can you avoid employment contract disputes? Sounds as though it should really be relatively straightforward. The simplest way to avoid potential difficulties is to create a robust employment contract framework that sets out the rights and responsibilities of all parties clearly. If an employer draws up a legally binding and correctly drafted employment contract when the contractual arrangement begins, then misunderstandings and confusion will be avoided later. Drawing up an agreement isn’t always easy or affordable. Constructing an employment contract can be time-consuming and often troublesome. It definitely requires expert knowledge, not just of legislation, but also case law.

Consequently employers feel obliged to turn to the services of these experts, but that can present another set of problems. Often the prices charged for drawing up these contracts can be prohibitive, and this can be a particular problem for smaller businesses. However, there is an answer to these problems: a much simpler and more cost-effective solution. Using an employer contract template, along with an employee handbook, can help to avoid future disputes and misunderstandings. The beauty of these templates is that they are drawn up by qualified lawyers, and yet are easily-customisable for every type of employment and circumstance.

So what type of information will UK employment contract templates contain?

There aren’t any formal rules about drawing up a legally binding employment contract. There’s certainly no requirement for the contract to cover every single aspect of all the terms and conditions: well, not initially at least. However, any written statement of employment particulars has to contain a certain amount of minimum information for it to be binding. It should contain:

  • the names of the employer and the employee
  • the date when the employment (and the period of continuous employment) began
  • the level of remuneration and the intervals at which it is to be paid
  • the hours of work
  • the employee’s holiday entitlement
  • the entitlement to sick leave, including any entitlement to sick pay
  • details of any pensions and pension schemes
  • the entitlement of employer and employee to notice of termination
  • the job title or a brief job description
  • clarification about whether the employment contract is temporary: if it is, it must state the period for which the employment is expected to continue. If the employment is for a fixed term, it must state the date when it is to end.
  • the place of work or, if the employee is required or allowed to work in more than one location, an indication of this and of the employer’s address
  • details of the existence of any relevant collective agreements which directly affect the terms and conditions of the employee’s employment – usually referred to in the employee handbook.

Additional information must be included if the employee is expected to work outside the UK for more than one month. The statement must also provide certain details of the employer’s disciplinary and grievance procedures, and state whether or not a pension’s contracting-out certificate is in force.  All the required particulars of employment must be given to the employee within two months of the date when the employment begins. If required, the information does not have to be given all in one document at the same time. Instead, it can be given in separate documents or instalments if this is more convenient, provided that certain particulars are collected together in one single instalment, referred to in employment legislation as the ‘principal statement’.

So what information will staff handbook templates contain?

A staff handbook sets out the framework for the whole employment relationship and formalises much of the information already contained in the employment contract. It promotes a better understanding between the parties and reduces the possibility of confrontation at a later date. Most staff handbooks will list both company policies and procedures and provide additional information for all employees about their rights and responsibilities. They normally include the following information:

  • capability procedures
  • disciplinary procedures
  • grievance procedures
  • maternity leave policy
  • parental leave policy
  • paternity leave policy
  • time off for dependents policy
  • adoption leave policy
  • flexible working policy ( if applicable)
  • equal opportunities policy
  • anti-harassment and bullying policy
  • electronic communication and internet access policy
  • data protection policy