Is your business compliant with current employment legislation?

By Mirtha Medina

Some SMEs are unaware of their obligations when it comes to employment legislation and specifically the risks of not issuing or not updating Contracts of Employment.

Companies of all sizes have an obligation by law to issue contracts of employment (also known as the Terms and Conditions of Employment) to all their employees within four weeks of the start of the employment relationship.

The rules for contracts of employment

The contract must be a document that contains details of the employment relationship such as the name of the employer and employee, the place of work, position to be held by the employee, salary and pay frequency and all other entitlements available to the employee including those dictated by other employment legislation such as working hours, holiday entitlement, maternity and paternity rights, etc.

The document must be signed by both employer and employee and no changes should be made unilaterally to this document; in other words, any change must be made by mutual agreement and signed by both parties.

Penalties for issuing a contract too late

In addition to the above, since October 2004 the Statutory Disputes Resolution regulations dictate that employees must receive a contract after four weeks of employment. Employers that fail to comply can face a penalty of payment of two to four weeks’ wages to each employee who does not have a contract.

The same regulations also dictate that the contract must contain disciplinary and grievance procedures and these must be used and applied fairly and consistently.

Is your business compliant?

Statistics show that there is a high percentage of SMEs who either do not issue contracts of employment or are not certain if the contracts they issue comply with current legislation.

Even large organisations that have well established employment procedures can fall foul of current legislation if they have not updated or issued amendments to their contracts to comply with current legislation.

SMEs should avoid the risks and seek professional advice

Saving the cost of using the services of a specialist professional can be false economy. if, for the sake of saving a few ££ now, you end up facing the cost of paying for tribunal preparation and representation and/or compensation in the future.

Outsourcing this task to an HR expert can help you prepare and issue compliant contracts of employment or review your existing ones to ensure they comply with current legislation. They can also advise you on any other employment issue at a fraction of the cost of employing a specialist.

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