One of the biggest milestones for any new business following company formation is taking on their first employee. There are a plethora of employment rules, and it’s the responsibility of an employer to ensure they are aware of the latest regulations and meet their obligations. In this blog, we will consider some of the basics of employment law.
One of the biggest milestones for any new business following company formation is taking on their first employee. There are a plethora of employment rules, and it’s the responsibility of an employer to ensure they are aware of the latest regulations and meet their obligations. In this blog, we will consider some of the basics of employment law.
Employment law during the recruitment process
Even before a business has employed anyone, they are still required to abide by employment regulations during their recruitment process.
Perhaps the most significant piece of legislation that applies to recruitment is the Equality Act 2010. This requires employers to ensure that employees – and potential employees – are not subjected to any form of discrimination on the basis of a “protected characteristic”, namely:
- gender
- marriage or civil partnership
- gender reassignment
- pregnancy and maternity leave
- sexual orientation
- disability
- race
- colour
- ethnic background
- nationality
- religion or belief
- age
Job advertisements should not state any requirements which depend on a protected characteristic in case this might be viewed as discriminatory. For example, the phrase “Looking for a young self-starter who is quick on his toes” references three protected characteristics and could breach the Equality Act.
Similarly, in a job interview, an employer should be careful to avoid discussing anything which could be perceived as potentially discriminatory. For example, asking an interviewee if they are pregnant or likely to have children in the next few years could lead to claims of discrimination on the grounds of pregnancy if they do not get the job.
Please note: There are a small number of exemptions in relation to protected characteristics rules, notably occupational requirements – such as a job advert for an actor who needs to look a certain way in order to fit the part.
Employment contract
Most employees have a contract of employment that outlines the main terms and conditions of employment, including the rights and responsibilities of both employee and employer. Although there is no legal requirement to provide an employee with an employment contract, they must receive a “written statement of employment particulars” on the first day that they start work, which includes:
- Names of employer and employee
- Job title or description of work
- Employment start date
- Amount and frequency of pay, along with any other employment benefits
- Working times – and if these might vary
- Amount of annual leave provided
- Location of work – and if relocation may be necessary
- Address of employer
- Length of contract (if applicable)
- Length of probation period, along with any relevant conditions
- Any required job training
Along with the written statement of employment particulars, there are several other pieces of information that must be provided on the first day of employment:
- Eligibility of sickness pay, along with the relevant company procedures
- Eligibility to any other paid leave, including maternity leave and paternity leave, etc.
- Notice periods required to be provided by the employer and employee
A wider statement of terms and conditions of employment must be provided within 2 months of the start of employment, which includes:
- Details of pensions and pension schemes*
- Collective agreements
- Rights to any non-compulsory training provided by the employer
- Disciplinary and grievance procedures
* Employers must ensure that they automatically enrol any qualifying employees into a workplace pension scheme – currently, this applies to anyone aged between 22 and the State Pension age who earns more than £10,000 per annum.
Health and safety
Employers have a duty of care for the health and safety of their employees. Under the Management of Health and Safety at Work Regulations 1999, the minimum an employer must do is carry out a risk assessment which:
- identifies any hazards that could cause injury or illness in the workplace, and who could be harmed;
- evaluate the risk and severity of any potential harm.
The employer should also take action to eliminate any hazards identified or, if elimination of hazards is not possible, control the risks. There should be a “competent person” with health and safety responsibilities in every business with employees.
Additionally, any business employing five or more people must have a formal health and safety policy and must officially record the results of health and safety assessments. There is a legal obligation to take out Employers’ Liability Insurance. Risk assessment templates and examples are available from the Health and Safety Executive (HSE).
Holidays, parental leave, and sickness pay
Employers need to be aware of the various rules relating to the eligibility of their staff to take time off for annual holidays, parental duties, and sickness – as well as the requirement to pay employees in respect of different types of leave. As a general guide:
- Full-time workers are entitled to 28 days of paid annual leave
- Statutory Maternity Leave is 52 weeks and Statutory Maternity Pay (SMP) is paid for up to 39 weeks
- Fathers are entitled to either one or two weeks of Paternity Leave, along with Statutory Paternity Pay
- Shared Parental Leave (SPL) is available for up to 50 weeks of leave and up to 37 weeks of pay between mother and father
- Statutory Sick Pay (SSP) must be paid to employees who meet eligibility conditions, for up to 28 weeks
Minimum wage and working time limits
It’s vital that employees are paid at least the rate of the National Living Wage or National Minimum Wage, whichever is applicable. The rates are updated annually and can be found on GOV.UK.
It’s also necessary to ensure that staff does not exceed the statutory working time limits unless they have opted out. This is currently: 48 hours per week averaged out over 17 weeks. For more information and certain exceptions to the rules see GOV.UK.
Disciplinary procedures and dismissal
Employees cannot be sacked unless they have gone through the relevant disciplinary procedures. Apart from the case of gross misconduct, this normally means that at least two disciplinary hearings should be held – the first one to provide a chance for the employee to rectify the problem. Disciplinary hearings generally fall into two categories: misconduct or capability.
At 1st Formations, we advise that employees who have completed at least two years of continuous service are typically eligible to bring a claim for unfair dismissal against their employer. However, there are circumstances where a dismissal may be deemed “automatically unfair” regardless of length of service — such as when an employee is dismissed while on maternity leave, for raising health and safety concerns, or for whistleblowing.
