Coping with employment law

A recent survey by Business Link has highlighted how difficult it is for a small business owner to cope with employment legislation. The results revealed that two thirds of small businesses fail to implement employment law properly.

The findings were:

  • A quarter didn’t think it was their job to implement the law.
  • A fifth weren’t sure how to do it.
  • A third simply didn’t know what their legal obligations as an employer were.


What law is there?

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From the initial recruitment process through to people leaving your business, the entire employment cycle is governed by legislation. For example, there are employment laws concerning:

  • Pre-employment residency and police checks.
  • Discrimination, from the wording of your job advertisement through to employment practices.
  • Grievance procedures, if an employee has a complaint.
  • Retirement and redundancy.

Yes, this is a lot to think about and unfortunately simply being unaware of your human resources responsibilities is no defence. In fact failing to comply with the law can have serious consequences for your business:

  • Employment tribunals which can be time consuming and stressful.
  • Paying out fines and compensation, causing a financial burden on your business.
  • A damaged business reputation that can result in lost customers.

So what can you do to stay on top of employment law?

A lot of businesses are concerned that staying legally compliant is too time consuming and holds them back from managing and growing their business. Of course all business owners have a lot to deal with, but it is important to find time to put the correct procedures in place now, making it easier for you to implement the regulations, and protecting your business for the future.

For a start, consider if you have documented processes around:

  • Confirming employee’s entitlement to work in the UK, by checking and copying certain original documents.
  • Providing compliant contracts of employment, no later than two months after the employee starts work.
  • Adhering to the national minimum wage, the minimum level of pay allowed by law to most workers over the age of 16.
  • Creating and distributing your staff handbook, providing your employees with valuable policies and procedures.
  • Providing equal opportunity recruitment, by objectively matching the criteria of the job specification to the competencies, qualifications and skills of each applicant.
  • Successfully managing poor performers legally, fairly and consistently, by having a structured process in place.
  • Sensitively handling grievances, providing structured informal and formal avenues of communication.
  • Having a clear retirement policy to provide consistency and clarity to leavers.
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New Employment Rules

There are a host of new employment related regulations coming into force on 6 April 2010. This is a brief summary of the regulations that are most likely to affect you or your business.

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Fit notes – these replace sick notes issued by GPs and will state what the worker can do, rather t
han what he or she is prevented from doing.
Pension date – the date from which the individual can draw the state retirement pension will not necessarily fall exactly on a woman’s 60th birthday. For example, a women who reaches age 60 between 6 April 2010 and 5 May 2010 will have a state pension date of 6 May 2010. This date also affects the payment of the employee’s NI contributions.
NI contribution years – individuals who reach state retirement age only have to accumulate 30 full years of NI contributions or credits to gain a full state pension.
A single year of NI contributions will count towards the state pension. Until now a person had to accrue at least one quarter of their working life (about 11 years for a man, 10 for a woman) to be entitled to any state retirement pension. Each year of NI contributions will be worth roughly £3.20 of weekly pension at current rates. It will be essential to accurately record the NI number for every employee, so that each individual can collect their pension entitlement when they retire.
Home responsibility protection credits (HRP) will be given on a weekly basis. This will allow the HRP credit to be combined with actual NI contributions to make up a full year of NI credits. HRP credits are given where a person stays at home to look after a child and claims child benefit.

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