As experts in employment law, we come across similar issues and mistakes made by well-meaning employers on many occasions. All of these issues are avoidable. We have listed below five of the biggest mistakes and ways to avoid each of them.
- Recruiting the wrong people
Ever been in a situation where your business is going well and succeeding and everything is pulling in the right direction and then you recruit one “bad apple”? That one person can have a hugely damaging effect on your business and potentially bring colleagues down with them and lose you business and money. Recruiting the right people who understand the direction and culture of your business is key. If you make recruitment mistakes, then you need to deal with these promptly. But don’t think you can make a snap decision without the risk of claims. You could still be sued if you don’t pay the correct notice or if the employee can claim discrimination or that they have been a whistle-blower. It is important, therefore, to take advice before dismissing any employee, even those with very short service.
- Not issuing employment contracts
Ever been in a situation where an employee has asked you what their rights are to holiday, sick pay, parental leave, adoption leave, etc, etc, etc and not known how to answer because you don’t have a written contract in place? Not only is there a legal obligation to set out in writing clear terms and conditions of employment for all employees within two months of their start date, it makes business sense to do this too. Without a clear contract document you are storing up a whole host of issues by not clarifying what your rules and expectations are with your employees. In addition, you could be putting your business at significant risk of customers leaving with this employee when they decide to move on (see 3 below). It is fundamental to all good businesses to have employment contracts issued to avoid these risks.
- Failing to use your employment terms to protect your business
Ever had a situation where one of your key team members leaves your business at short notice to join a major competitor or to set up in competition? This can be a nightmare scenario if you have not invested the time to properly protect your business against this. The good news is this is relatively easy to do. Employment contracts can be used to put in place clear protection for your business in terms of protection of intellectual property rights, and importantly, restricting the poaching of your customers and other staff after they leave. These are key provisions that all successful employers have in place and are essential for the management of risk when surprises arise. However, don’t think you can do this yourself. These type of documents and clauses have to be drafted carefully to provide protection you can rely on and only work if they are reasonable and don’t go too far in their scope. Investing the time and money to get this right is likely to be time and money well spent. The cost of failing to have protection in place can be devastating to your business.
- Dismissing employees without following due process.
Ever wanted to sack someone on the spot for a clear act of misconduct or insubordination? Well hang fire, take stock and follow due process. If you don’t you are putting your business at genuine risk of a successful and potentially costly unfair dismissal claim. Only in extremely rare and unusual circumstances would an Employment Tribunal find an employer had dismissed an employee fairly without following a disciplinary process. A successful Employment Tribunal claim can be hugely expensive and damaging. This can often be a cost you can avoid by simply following the correct procedural steps, the steps may be straightforward and the process quick – we can advise you on how to proceed.
- Offering a deal to an employee on termination.
Ever found yourself in a situation where you need to dismiss someone quickly and you are tempted to secure an amicable exit by giving the employee a sweetener to leave? Whilst this can be achieved and you can create legally binding agreements that mean you can avoid the risk of an employment claim, it only works if you follow the correct process and use the authorised documents. Discussions about an agreed exit need to be clearly understood by all concerned as being “off the record” conversations as either amounting to “protected conversations” or genuine “without prejudice” discussions. If not, you leave yourself open to risk that what you discuss can be used against you in Tribunal if you fail to reach an agreement with the employee. In addition, these type of “deals” only work for employers if they are documented in the right way as formal “settlement agreements” and where your employee has taken their own independent legal advice (usually at your cost). If things are not documented correctly, the employee could accept the sweetener and then sue you after banking the money. The good news is that it is possible to properly document an agreed termination deal in most circumstances, but it is important to follow the correct process. If you don’t get this part right, then you could actually be creating a bigger and potentially a more expensive issue to resolve. If in doubt take advice.