40 | DECEMBER 2019
Business
Read online at www.proinstaller.co.uk
DODGING THE
EMPLOYMENT
LAW MINEFIELD
Employment law can be a pain. There is a lot of detail and traps for the unwary. Benjamin Dyer
of Powered Now provides some thoughts on how to make it work for installation businesses.
It’s hard to believe the fol-
lowing story, but not only is it
true, it happened recently. My
friend worked for a large law
firm. According to their web site
they have an “award-winning em-
ployment team specialising in all
aspects of employment law”.
My friend held a fairly senior
position and one day was called
to a meeting with his boss and
the HR Director. Expecting to be
asked about someone in their
team, they were stunned when
they were told that they were
being made redundant.
It might have ended there.
But if there is more than one
person doing the same role,
the law says that there must be
a consultation period before
any redundancies are made.
Everyone in the role must be
included.
A few months earlier, some-
one much more junior had been
recruited with the same job
title as my friend. But there had
been no consultation, so the
employer hadn’t followed the
law. It gets better. What was my
friend’s wife’s job? Senior em-
ployment lawyer at a rival firm.
You couldn’t make this up.
The last time I saw my friend
was over a cup of coffee. He
seemed relaxed, as anyone
tends to be who has received 12
months salary mostly tax free
in a settlement. Their employer
seemed very generous but was
actually avoiding a very embar-
rassing employment tribunal.
The top legal points
There are a whole host of legal
requirements when it comes to
employing people. Here is a quick
summary:
• Check all employees have the
legal right to work in the UK
before they start work plus
keep copies of the documents
e.g. passport, work permit,
proving it.
• Provide a basic statement of
terms and conditions of em-
ployment within two months.
• Register as an employer with
HM Revenue & Customs
(HMRC) before the first pay
day of your first employee.
• Run a payroll and issue em-
ployees with a payslip detail-
ing earnings before and after
itemised deductions including
tax and National Insurance i.e.
operate PAYE.
• Report your payroll informa-
tion to HMRC electronically
each time you pay anyone.
• Pay all tax and NI owing to
HMRC according to their
timetable.
• ‘Auto-enrol’ eligible employees
into, and contribute towards, a
workplace pension.
• Treat employees fairly.
• Do not hold back salaries of
staff.
• Pay at least minimum wage.
• Act responsibly towards the
health and safety of all em-
ployees.
• Do not discriminate on the
grounds of sex, sexual orien-
tation, ethnicity, race, religion
or belief, disability, age, gender
re-assignment, marriage or
civil partnership, pregnancy or
maternity.
• Do not discipline anyone who
is standing up for health and
safety standards.
• Provide pregnant employees
paid time off for ante-natal
care, including parenting and
relaxation classes.
• Provide a minimum of 28
(including public holidays)
working days paid holiday per
annum.
• Pay a minimum of Statutory
Sick Pay (SSP) if an employee
is ill for four or more days in-
cluding weekends. Note there
is no legal compulsion to pay
beyond SSP although many
employers do.
• Provide maternity leave of
up to 52 weeks, 39 weeks of
which the employee will be
entitled to Statutory Maternity
Pay (SMP) which is 90% of the
employee’s average weekly
wage for the first 6 weeks and
then £148.68 per week (as at
2019) for the remaining 33
weeks.
• Allow pregnant women return-
ing to work to come back in
the same or a similar role.
• Allow fathers to take paternity
leave of up to two weeks at
the same SMP rate.
• Allow employees (including
part-time employees) with a
minimum of 26 weeks’ contin-
uous service to request flexi-
ble working. The request must
be considered but acceptance
is not mandatory.
Employment contracts
If you do not have a formal
employment contract in place
then one will be deemed to exist.
This will normally be to the
employer’s disadvantage. Employ-
ment contracts must include at a
minimum:
• Name of employer, place
of work, job title, hours of
work.
• Salary. This is usually paid in
arrears in 12 equal month-
ly instalments and must
conform to minimum wage
legislation.
Notice period on each side. If
you don’t provide this:
• Installation companies must
give notice of 1 - 12 weeks
depending on how long the
employee has worked for
them.
• Employees are only required
to give one week’s notice
whatever their length of
service.
be a statutory or fair reason
to dismiss an individual. The
valid reasons are: redundancy,
conduct, capability, statutory il-
legality or “some other substan-
tial reason”. You must follow a
set and fair process to terminate
employment and also to disci-
pline an employee. If this is not
followed the individual proba-
bly has the right to claim they
have been unfairly dismissed.
The maximum award for unfair
dismissal in 2019 is over £86k
or 52 weeks gross pay if lower.
Discrimination claims on the
grounds of gender, race, etc. are
uncapped so can be extremely
expensive.
Formal unfair dismissal com-
plaints cannot be made and
redundancy payments are not
due until employees have been
employed for two years. There is
no qualifying period for discrimi-
nation complaints.
Employment Tribunals Advice to avoid
legal hazards
Claims in the UK are fairly
common as an ex-employee can
issue a claim without having
to prove that the case has any
merit.
It can be very, very painful to
be taken to court by an ex-em-
ployee. That’s both in money
terms for legal advice but also in
the sheer distraction from run-
ning your business. Even unsuc-
cessful claims rarely result in the
employer recovering their costs.
The number one claim is for
unfair dismissal. There must There are a number of things
that you can do to help avoid
the legal hazards. When it comes
to this, preparation is the key.
Careful preparation makes it less
likely you will lose a case, which
in turn makes it less likely you
will ever be taken to a tribunal in
the first place. Get advice from an
HR Advisor when drawing up:
• Your employment contract
and company handbook.
The aim is to provide as
much flexibility as possible
to you.