Ignoring your HR responsibilities can prove very costly.

A question for small businesses owners;  are you always putting off your HR (human resources) responsibilities for your staff?  Do you live by the “well nothing bad has happened yet” philosophy? You know you have certain legal responsibilities, but does HR always go to the bottom of the list? If this sounds familiar, you are not alone but that doesn’t make it right.

Ignoring employment responsibilities can be a very costly risk to take, with some penalties running into the thousands of pounds f you don’t protect yourself – Now I’ve got your attention, I thought it would be useful to share the most common HR risks small businesses face and just how much it can cost when it goes wrong.

Not providing an Employment Contract 

  • By law employers need to provide employees with a written statement of terms and conditions of employment (employment contract) within 2 months of them starting work with you. If you fail to do this you can be taken to an employment tribunal and fined 2-4 weeks pay.
  • Any terms of employment that have been agreed with the employee must be put in writing or you are leaving yourselves wide open to disagreements that can ultimately lead to a breach of contract claim. A breach of contract compensation claim can carry a penalty of up to £25,000 if taken to an employment tribunal, or £50,000 if taken to the High Court.

Unfair Dismissal 

  • An employee that is dismissed without a “legally fair reason”, or without the correct legal process being followed, can seek compensation through an employment tribunal where, if successful, can be rewarded up to £74,000 in compensation, or a year’s pay whichever is lower. Additionally you will be responsible for your employment lawyer’s fees, regardless of whether or not you win, which for a tribunal case can run into the thousands.
  • Employees do need to have at least a minimum 2 years service to claim unfair dismissal, however if they can show that they were “discriminated” against unfairly when being dismissed, they can make a tribunal claim based on that, regardless of their length of service which leads to the next point.

Employee discrimination 

  • Perhaps the issue that employers think they know most about is discrimination, as it is publicised so often, however you probably don’t know that in certain cases of discrimination, an employment tribunal can award unlimited compensation, and once an employee has shown there is a case for discrimination, it is up to the employer to prove otherwise.  A difficult task indeed.
  • For clarification, the law protects employees from being discriminated against on the grounds of age, nationality, national origin, race, colour, ethnic origin, disability, religion or belief, gender reassignment, marriage or civil partnership, pregnancy or maternity, sex and sexual orientation.
  • You must be aware, there is no length of service requirement for employees to make a claim of discrimination.

Legally required Company Policies

  • There are a number written company policies you are legally required to have in place, such as maternity, disciplinary and grievance procedures. It is also strongly recommended that you have various other policies in place such as equality/equal opportunities, holiday entitlement, sickness and sickness absence pay, for your own benefit and those of your employees.
  • Failing to have the appropriate employment policies in place leaves you at risk of it counting against you, should an employee bring a claim against you; ultimately resulting in larger compensation rewards.

Does an employee have the “right to work” in the UK

  • This is quite a major point.  You must check and ensure you have evidence such as a passport or work permit.  Failing to carry out these simple checks can end in a fine of up to £20,000 should it be found that your employee does not in have the right to work in the UK and therefore you are ultimately employing illegal workers. Not only is this costly but will be rather damaging to your Company’s reputation.

There are other employee issues that can cost you greatly, not perhaps in court in the form of compensation, but in time dealing with employee issues. There is so much information freely available on the internet that employees who feel they are not being treated fairly will seek to be compensated for the wrong doing.  It is true to say that employment tribunal cases have fallen since the introduction of the fees in 2013, but it does happen, and you should not be leaving yourself wide open to costly mistakes that can be easily avoided.

So now you know how much ignoring your HR responsibilities can cost you, are you still prepared to take the risk?

HR Revolution can help you avoid these risks,  call us on: +44 (0) 203 538 5311 if you need advice with any of the issues covered above.   If you just want to get yourself covered with the right documents visit our online HR document shop for all the legally compliant employment contracts, handbooks, policies, letter and form templates you could ever need.

Major employment law changes in 2016

Major employment law changes in 2016 – a CIPD Update

Following the election in May 2015, many of the announcements made by Government will start to come into force in 2016, the highlight of these being the new National Living Wage comes into affect from April, which is expected to affect half of all employees.

Another pay issue is to be addressed with legislation is that large organisations will be required to publish gender pay gap reports, including bonus payments. Additionally tax-free termination payments may also become subject to tax following a consultation last year by the Office of Tax Simplification.

If passed by Parliament, bills (see below) will bring changes to strike laws, use of the term ‘apprenticeship’, exit payments for public sector workers, and employing overseas workers.

Consultations expected this year include proposals for working parents with children aged three to four to receive 30 hours of free childcare, and working grandparents to access shared parental leave to care for grandchildren.

In January

  • Regulations giving zero hours workers the right not to be unfairly dismissed or subjected to a detriment for failing to comply with an exclusivity clause, and to claim compensation – come into force 11 January.

In April

  • The new National Living Wage comes in to force. The minimum wage for workers age 25 and over will be £7.20 – from 1 April.
  • The National Minimum Wage amendment regulations also double the financial penalties if employers are found to have paid less than the minimum – from 1 April.
  • Statutory rates of maternity allowance and statutory maternity pay (SMP), statutory paternity pay (SPP), statutory adoption pay (SAP) and statutory sick pay (SPP) usually increase in April each year. The Government has announced that rates will not be increased this April.
  • Public sector employees will be required to repay a tapering proportion of a ‘qualifying exit payment’ if they return to the public sector within a period of 12 months under regulations – expected to come into force on 1 April. A £95,000 cap on the total value of exit payments for public sector workers will also be introduced, but no date has yet been given for its implementation.

Employment-related Acts and Bills

  • The Trade Union Bill introduced on 15 July 2015 continues its passage through Parliament. It will reform strike laws in Great Britain.
  • The Enterprise Bill introduced on 16 September 2015 continues its passage through Parliament. It includes provisions on apprenticeships and capping exit payments for public sector workers (see above).
  • The Immigration Bill introduced on 17 September 2015 continues its passage through Parliament. It contains more provisions on illegal working, the introduction of a skills charge and a new duty on public authorities to ensure that everyone who works for them in a customer-facing role speaks fluent English.
  • Plans for a Counter-Extremism Bill were announced in the Queen’s Speech and will enable employers to check whether an individual is an extremist and bar them from working with children.

Consultations and reviews

The Ministry of Justice is currently carrying out its commitment to review the impact of employment tribunal fees. The review was announced in summer 2015 and is continuing.

European developments

  • Consolidation of worker information and consultation directives – The European Commission consulted with the social partners on the possible consolidation of three directives: Collective Redundancies, Acquired Rights and Information and Consultation of Workers. The consultation ended on 30 June 2015.
  • Data Protection Directive – final agreement was reached in December 2015 between the Commission, European Parliament and European Council on comprehensive reform of the Directive. The revisions are expected to be formally adopted by the European Parliament and Council and the new rules will apply two years after that date.
  • The Free Movement of Workers Directive – in April 2014, the EU Council of Ministers adopted an enforcement directive to facilitate the free movement of workers in the EU. Member states have two years to implement it at national level.
  • The Posted Workers Directive – is intended to stop worker abuse and ensure that posted workers enjoy their rights relating to holiday and pay.  The Council of Ministers adopted the Directive in May 2014; member states have just over two years to implement it in their national legislation. The UK Government carried out a consultation in 2015 on how it will comply.
  • Working Time Directive review – following a second consultation, the social partners expressed interest in negotiating on the review. Further talks were held but no agreement was reached. In December 2014 the European Commission published an online public consultation on the review which closed in March 2015.

Taken from CIPD, thank you to them.