Do you make these big contractual mistakes when employing people? #TMUguru
This article is a free resource from the TechMeetups Guru Program where Richard Cummings is participating as our HR Guru to assist founders of startups and business leaders though practical workshops and mentoring.
Do you make these big contractual mistakes when employing people?
Recruiting anyone for your organisation, whether they’re an employee, freelancer or agency staff, it’s absolutely essential you know the basics of employment law. Use Richard’s advice as a checklist that you’re doing things right.
Contracts – Do issue them, regardless of how short the assignment, you are legally obliged to do so and ensure the contract reflects the engagement.
Employees – Required to have a contract 2 months after the start date, it is advisable to issue this prior to them starting to ensure they sign any restrictive covenants before being exposed to your intellectual property. Employees have rights, such as paid holiday, sick pay and family friendly policies.
Contractors, freelancers and self employed – Although they may wish to be self employed for tax purposes, HMRC may view this differently, so you should do a few acid tests before you engage them. Do you have control over them? If they fail to attend work will you discipline them? Will they make decisions on your behalf? If so, they may not really be self employed.
Agency Workers – After 12 weeks working for you they will be entitled to comparable benefits of your employees including pay and any other benefits you may offer.
Casual Workers – These workers work for you on an ad hoc basis, if they start to work regular shift they drift into employee status, break up the engagement with a 2 Sunday gap after each assignment to ensure this doesn’t happen. Don’t forget they are still entitled to holiday pay, don’t wrap this up in the salary, show it as a separate payment on the payslip.
Fixed Term Employees – If your engagement with a casual worker requires them to undertake a lot of work over a period of time, consider using a fixed term contract, this means they are bound by notice periods and are less likely to let you down. Don’t forget to use an end date on the contract.
Interns – Don’t get caught out, interns have 6 years to claim that they were a worker if they feel you have exploited them, and this can be costly to your business. Get an intern agreement, use some wording to ensure that they must address, at the time, if they don’t feel they are getting their training. Make it easier by having 30 minutes with them on a Friday to find out what they have learned, it is a training programme, albeit on the job.
Termination – Under new regulation you may terminate an employee with less than 2 years service and they cannot claim unfair dismissal, however, they may claim discrimination. Remember, discrimination can be claimed from the point of application, so they don’t actually have to be employed.
Getting wrong – Not only can you be looking at very expensive tribunal claims if you have employees on the wrong contracts or fail in your employer obligations, but you could be looking at paying any unpaid tax, NI contributions, holiday pay, sick pay, notice pay and in some cases redundancy pay.
When in doubt – Take advice if you are unsure, a short conversation could save you time and money in the long run.
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