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

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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.

You must comply with legal restrictions on employees' working hours and time off, or risk claims, enforcement action and even prosecution.

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.

Making redundancy a last resort

The end of the Coronavirus Job Retention Scheme (furlough scheme) has left many businesses worried about whether they will be able to keep staff on. If your business is struggling and you need to reduce your outgoings, you can take steps to make redundancies a last resort. We list some ways you can cut your costs, not your workforce

If you are considering making redundancies, take advice early. Be careful about the way it is handled, otherwise you may be at risk of an unfair dismissal claim. You may be able to avoid making redundancies completely. Alternative options might include:

  • rearranging working patterns
  • temporary lay-offs
  • short-time working

Rearranging working patterns

This could include cutting overtime, deferring starting dates for new recruits and freezing future recruitment. Consider job restructuring, too, for example, job sharing and offering sabbaticals or possibly secondments to other organisations.

Review all temporary staff and consider whether to end their contracts. Where fixed-term contracts come to an end, you could not renew and instead offer the work to a permanent employee who is at risk of redundancy.

Consider applications for early retirement, taking into account the effect on employees' pension rights. Also consider whether any employees may be prepared to take voluntary redundancy.

Redeploying employees

More contentiously, consider retraining and redeploying employees - maybe to lesser jobs. Whether you can do this depends on your employee's contract of employment - it must be drafted widely enough to cover redeployment. Employers must also act reasonably. For example, certain employees may expect to be offered a role that fits their experience or qualifications, limiting your ability to pay them less in their new role. If in any doubt, take legal advice before acting.

If redeployment is reasonable and stated within the contract, the employer can agree the move with them (maybe with a financial incentive), impose it on them (and risk legal action) or (if fewer than 20 employees are involved) dismiss them and offer them the new position on new terms. If 20 or more employees are involved, collective consultation is required.

Temporary lay-offs

If an employer believes a downturn in work will be temporary, and employees' contracts of employment allow (or an employee expressly agrees to it), they may be able to send their workers home temporarily - for a week or two - on reduced or no pay, without dismissing them.

Usually, the employer must pay a statutory 'guaranteed payment'. To be eligible, employees must have been employed for a month, be available for work and be prepared to carry out any reasonable, alternative work. They must not be off work because of industrial action. The amount of the guaranteed payment depends on the hours worked and payments can only be made for five days in any three-month rolling period. The maximum payable is £31 per day.

If the temporary lay-off lasts more than four continuous weeks or six weeks out of thirteen, the employee can give notice (there are strict time limits) that they wish to claim redundancy payments.

There is now a risk of a claim for constructive dismissal, so take legal advice about your specific situation.

Short-time working

Short-time working is when employees are asked to work shorter hours (eg three days a week or mornings only). If the result is that an employee does not work on a particular day, again they may be entitled to guaranteed payments. But where they work part of every day, they are not.

Like temporary lay-offs, short-time working is only allowed if it is provided for in the employees' contracts of employment or they expressly agree to it.

If an employee receives less than 50% of their week's pay for four weeks running or six out of thirteen, they may be able to claim a redundancy payment, provided they comply with the strict time limits.

As with temporary lay-offs, there is a risk of a claim for constructive dismissal, so take legal advice about your specific situation.

If all else fails, redundancy may be the only answer.

Recommendations

  • Consider alternatives to redundancy.
  • Always take legal advice before varying an employee's contract or when considering redundancies.

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