Skip to main content
Practical employment law information to support your business, from Clover HR

Search

Establishing a successful recruitment process and clear written employment contracts for new employees can have a major impact on your business.

Every business needs to be aware of its obligations under minimum wage and equal pay laws, as well as recent pensions auto-enrolment changes.

The right employment policies are an essential part of effective staff management. Make sure any policy is clear and well communicated to employees.

While sick employees need to be treated fairly, you need to ensure that 'sickness' is not being used as cover for unauthorised absence.

Most pregnant employees are entitled to maternity leave and maternity pay, while new fathers are entitled to paternity leave and paternity pay.

As well as undermining morale, illegal discrimination can lead to workplace grievances. Employee discrimination is covered by the Equality Act 2010.

Home, remote and lone workers are becoming increasingly commonplace. Key issues include communication and how to manage and motivate people remotely.

The right approach to consulting with and providing information to your employees can improve employee motivation and performance.

Disciplinary and grievance issues can be a major burden to employers. Putting in place and following the right procedures is essential.

Following the right dismissal and redundancy procedures helps protect your business and minimise the risk of a legal dispute at tribunal.

Employment tribunal claims are a worrying prospect for any employer. A tribunal case is a no-win situation – even if the claim is unjustified.

Overseas customers - getting paid

Selling to overseas customers can be good for growth, but many businesses are put off by concerns that getting paid will take too long or, worse still, they will not get paid at all. However, taking the right precautions can reduce or eliminate most of the risks

Use Incoterms to protect your business

It's key to use the right terms in your international contracts in the first place. If you are exporting, trade using Incoterms - the internationally recognised standard trading terms. By using the right Incoterm, you minimise the risk of any ambiguity in your contract. Incoterms set out each party's responsibilities for various aspects of the trade including insurance, transport and payment.

Even so, local laws may mean that some Incoterms are not fully effective and confusion can arise. A lawyer with expertise in foreign trade can advise you on the detailed requirements of each Incoterm in relation to exports to your target country.

Export payment options

There are several payment options you can use depending on the nature and size of your deal. You can:

  • Ask for payment upfront. This removes the risk of non-payment but your customer must be prepared to take the risk of non-delivery or goods damaged in transit. Most customers will not agree to take this risk.
  • Sell on open account, as you do here. You should investigate how long local payment periods are, the non-payment risk for that country and the creditworthiness of individual customers. In some countries, payment periods can be significantly longer than is normal in the UK, leaving you with a potential cash flow problem.
  • Use a letter of credit or a bill of exchange. While there are several variations on this theme, these generally reduce your risk and can also improve your cash flow, but will involve bank charges.

Insurance

When selling to overseas customers, consider export insurance. If you are exporting capital, goods or services, you may be eligible for cover from UK Export Finance. Find out more about UK Export Finance products and services.

You can use credit financing to ensure you get paid as soon as the contract is delivered. A line of credit can cover a series of contracts, rather than just one.

Other options include arranging insurance privately through an insurance broker, or using a bank or trade finance specialist to both finance your exports and cover you against late payment or default.

Exchange rate risk

Take steps to protect yourself against exchange rate risk. Typically, this might be by agreeing the contract in pounds sterling or by arranging a currency 'hedge' (or possibly a currency option) with your bank.

Monitoring debtors

Once you have started trading, keep an eye on your debtors. Immediately query any deviation from normal trading patterns (eg order levels, delivery, settlement, etc). Consider monitoring filings at public registries in countries where your debtors are registered for signs they are in trouble.

If in doubt, take legal advice.

Stay up-to-date with business advice and news

Sign up to this lively and colourful newsletter for new and more established small businesses.