Small businesses are the engine room of the economy. They employ over 14 million people across the UK, and whether they have a single employee or fifty people, owners need to consider employment law. As soon as you begin taking on employees, you will at the same time take on legal responsibilities. Before any employment begins within your business, you should have a comprehensive understanding of your obligations as an employer. If you fail to comply with employment law, it’s quite possible that you might find yourself before an employment tribunal.
There is also a range of sector specific information that you need to consider if you’re to ensure your business is fully legally compliant. While some of these obligations will be highly particular, here are some of the basic considerations that business owners will need to bear in mind.
The workplace environment
A key basic legal consideration for small business owners, and one that’s all too often overlooked, is the workplace environment itself. It needs to be safe, suitable for the job intended with appropriate facilities provided for all your employees. This includes any members of staff with disabilities, with any adjustments that are necessary made and accessibility issues addressed.
These facilities will need to include toilets, washing facilities, somewhere for employees to take a break, a place for staff belongings, and freely available drinking water. You need to ensure that there’s adequate ventilation, a fire escape, and a comfortable temperature. The premises need to be well maintained.
As well as contractual rights and obligations that employees have, there are also a range of statutory rights that employers need to comply with. This includes several core rights:
- They must be paid at least the minimum wage.
- They must not be discriminated against at work or harassed.
- They should receive paid sick leave and paid holiday leave.
- They have the right to claim any parental entitlements such as paid parental leave.
- They should receive rest breaks
- They have a right to request flexible working arrangements
- Their contract cannot be altered unilaterally
These are the basic legal rights that all employees have but in reality most employers will offer a more comprehensive package of rights and entitlements for their employees. If you’re running a small business that is beginning to move towards employing people, you will need to have a firm understanding of what you’re required to provide and comply with.
An initial duty for any new employer is to make sure that you comply with employment contract law. This sets out a range of legal obligations that the employer must abide by, and what the employee can expect in return.
A legal contract exists at the moment that someone accepts a job offer, whether or not they’ve received a written contract. It’s advisable to issue a written contract as soon as possible, so that both parties are aware of rights and obligations on both sides.
As of 6th April 2020, the right to receive a written contract is applicable from day one. This right has also been extended to anyone with working status, including both zero-hours and casual workers.
This means that either on or before starting work, an employee will be entitled to receive a range of basic information. This includes:
- The names of both employer and employee
- The date when employment began
- The date on which the employee’s period of continuous employment began
- The rate of pay and how it’s calculated
- The intervals at which they’re to be paid, such as weekly or monthly.
- Any terms and conditions that relate to the hours of work
- Sick pay and holiday entitlement
- Notice periods
- Job title or a short description of the role
- Is the job permanent or temporary
- Details of any probationary period
- Details of any training entitlement
Within two months of the employee starting work the employer also has to apply details of the following:
- Disciplinary procedures
- Any pension entitlements
- Any collective agreements that impact on terms and conditions
If an employer doesn’t comply with this requirement, employees are entitled to make a referral to an Employment Tribunal for a declaration of what their terms and conditions are. They can also apply for damages of two to four week’s pay as a result.
What differs from small businesses to large businesses?
While there are rights and responsibilities that are common to all businesses regardless of their size, larger businesses who employ over 50 members of staff have a range of other obligations, including pensions.
If your small or medium sized business is growing to a point where it may begin employing more than fifty people, then it’s important to obtain professional legal advice to ensure you’re fully compliant with the more significant set of obligations. Failure to do so for larger companies can have serious consequences.
Small businesses who employ people have less legal obligations than larger businesses, but these need to be taken very seriously. Failure to do so can have very important consequences for large companies, so if your business is growing beyond the point of being a SME then legal advice and guidance is essential.
Whether your business has a single employee or over fifty, the employment law team at Mark Reynolds Solicitors can help ensure you remain legally compliant.
For advice, information and guidance contact us today.