Budding entrepreneurs and small business owners might not have employment law at the forefront of their minds when starting a business, but understanding some of the most basic employment laws is critical, especially if your business begins to rapidly grow and expand.
Laws differ between the UK and the Crown Dependencies (such as Jersey), meaning that, if you expand your small business internationally, you must be aware of how the different laws work in each country. When referring to various laws, be sure to check the website of the country you are operating from and adhere to the appropriate legalities.
If you know the law from the outset, you can prevent any legal action taken later down the line. The last thing you want is to end up in a tribunal for unfair dismissal or another aspect of employment law. These cases cost time and money, and can be damaging to the reputation of a company you’ve worked hard to build.
Save yourself the stress and familiarise yourself with some of the most important employment laws. However, it’s important to remember that the law is always changing. GDPR had a huge impact on companies this year and, when the final decision about Brexit is made, this will have an impact on the law as well.
Below, we’ve listed some of the most important employment laws that you need to familiarise yourself with. This is not an exhaustive list, but it can provide a starting point for the legal information you need to understand.
Recruitment and Employee Contracts
You must recruit employees fairly, which means understanding what classifies as discrimination. Any kind of discrimination during recruitment or dismissal can be brought against you in a tribunal.
When you first hire employees, contracts are critical. The contract is a document that outlines the terms and conditions of the employment. It gives both the employee and employer certain rights and obligations.
Some of the most important information regarding a role is contained within a contract, such as salary, pension, probationary period and working hours. While most contracts will follow the same format, they will be unique to each company and individual.
Understand what statutory requirements you must give employees in terms of pay, sick leave, maternity and annual leave. Minimum wage requirements should always be adhered to — details about pay can be written into the employment contract.
Take the time to read the other rights that employees have, such as health and safety, the ability to join a Trade Union and data protection.
For many small businesses, the thought of dismissing an employee is not pleasant to think about. However, knowing the law before you dismiss an employee will put you at an advantage. Understanding the law means you are less likely to face any legal action over unfair dismissal. Make sure you learn what constitutes as fair, constructive and unfair dismissal in the country you trade in.
Consider Creating an Employee Handbook
Although it’s not a legal requirement, we recommend creating an employee handbook. A handbook has multiple benefits both for the employee and employer.
The handbook should outline the mission and values of your company. This can foster a sense of belonging in employees and help them understand the business culture they are joining.
Other information you could include in a handbook are policies, procedures, health and safety requirements, management best practices and more.
Should any issues arise, the employee handbook can be used as a point of reference. An employee handbook outlining procedures can also be beneficial, should you end up facing legal action or have to attend a tribunal.
As your business grows and laws continue to change, it’s important to review your handbook and update it when necessary. If you’re an entrepreneur, hiring an HR employee or outsourcing your HR will help you deal with employment-related issues while you manage the business. If you need guidance on creating your handbook or you’re dealing with any employment issues, consult an employment law expert.
Chris Austin is the head of employment law at Parslows Jersey. Chris regularly represents clients before the Courts and Tribunals of the Island of Jersey.