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Employing People in the UK

A growing business will sooner or later need to employ staff to support its expansion. However, the wrong approach to employment can bring the business down and may cost thousands of pounds. So how do you ensure you are doing the right thing when employing people in the UK?

Employing staff
Employing staff is expensive and time consuming. Businesses should always consider options such as agencies, contractors or freelancers.

Questions to ask are:

frequency of the work
hours per week
duration

A contract of employment exists as soon as an employee starts work. Often the contract betweenthe employer and the employee is verbally agreed, however, employees are entitled to be given a written statement setting out the main particulars of their employment within two months of their start date.

Regardless of whether employees are full time or part time you will have responsibilities to them. Some apply immediately, others after a minimum period. As an employer you must ensure that you do at least the following:

Set up a Payroll and register with HMRC in order to deduct tax, NI contributions, student loans, etc
Purchase an Employer Liability Insurance to protect against claims
Make the working environment safe and secure. Produce a Health and Safety policy
Provide payslips and pay at least the minimum wage (£5.52 per hour for employees over 22 years of age and £4.60 per hour for 18 to 21 year olds)
Provide a Stakeholder Pension Scheme if employing more than 5 people

You must treat your employees fairly and avoid discrimination. All employees are entitled to fair treatment, whether you have to dismiss them, make them redundant or if you are selling your business. The key areas to be aware of are:

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Holiday entitlement
By law, annual holiday entitlement is 24 days for full-time and pro rata time for part-time workers which can include bank holidays. This will increase to 28 days from 1 April 2009.

Time off , sick pay, maternity
The statutory requirements when taking time off are as follows. For example, if a member of staff is off sick for more than three days he or she will be entitled to statutory sick pay. If your employee is pregnant, or becoming a parent, they will be entitled to maternity pay and/or parental leave during the first five years of their child‘s life. You must also seriously consider any requests from parents with children under six to work more flexibly.

Unexpected absences affect productivity, profits and the motivation of other staff . However, pleasant working conditions, active management and good motivation can reduce absenteeism and labour turnover.

Disciplinary
A disciplinary issue usually arises when an employee‘s actions have had a negative impact on your business, for example in a case of misconduct or poor performance. A minimum statutory procedure must be applied in disciplinary matters. Failure to do so could result in heavy fines at an employment tribunal.

Redundancies
There are multiple reasons for dismissing employees such as being incapable of doing their job, long-term sickness absence or poor performance. Whatever the reason, you must follow the correct statutory procedure which stipulates contractual and statutory notice periods and minimum payment rights. Failure to do so may result in compensation awards to the employees, lowered workplace morale or damaged reputation.

If you need more information regarding employing people in the UK please contact Richard.plasek@helrik.co.uk

By Richard Plašek
Photo: iStockphoto.com