HR Matters – top tips when taking on new starters

July 19, 2016
 

As part of our continuing series of articles taking a look at common HR issues facing estate agents, Honest Employment Law Practice (HELP), specialist HR and employment law advisors, take a look at procedures that you should follow when taking on new starters.

Contracts of Employment

A contract does not have to be in writing for terms to binding.  Terms and conditions of employment may be outlined in a written statement which is more commonly referred to as the contract.  However, the contract is wider than just the written statement of terms and conditions.  The contract may include the offer letter; policies and procedures; or directions conveyed verbally, all of which would apply.

An employment contract starts as soon as an offer is accepted.  This may be in writing or verbally.  However, a written statement of terms and conditions must be issued, by law, within 2 months of the employee’s start date.

A written statement must include the following:

  • Employee Name
  • Employer Name and Address
  • Start Date
  • Job Title
  • Location of Work
  • Probationary Period
  • Pay Rate
  • Benefits e.g. Company Car or Car Allowance
  • Pension
  • Hours of Work
  • Holiday Entitlement
  • Sick Leave and Pay Arrangements
  • Details of Disciplinary and Grievance Policies
  • Location of Other Policies and Procedures e.g. Employee Handbook
  • Notice Periods for Termination of the Contract From Employee and Employer

It is important to think about what are the most important terms and conditions for your business that you are not going to want to change in a hurry.  If you put a term in the written statement, you will need to consult with the employee to gain agreement to change this term or you will be in breach of contract.  It is therefore advantageous to have the bulk of your policies and procedures outside of the contractual written statement.  This gives you as an employer a lot more flexibility to change policies and procedures if the needs of the business require.

Pensions

By 2017, every employer must automatically enrol eligible employees into a workplace pension scheme.  Employers have had, or will have a ‘Staging Date’ which is the date by which The Pensions Regulator requires employers to begin automatically enrolling employees into a workplace pension scheme.  This date will not be the same for all employers.  The Pensions Regulator can issue fines for continuing non-compliance which start at £50 per day per employee, rising to £10,000 per day for businesses with 500 or more employees. For a business with 49 employees the following fines would apply:

  • £500 per employee, per day
  • £2500 per employee, per week
  • £10,000 per employee, per 4 weeks
  • £130,000 per employee, per year

So you can see how important it is to ensure you abide by the requirements of The Pensions Regulator.  To avoid hefty fines, check your staging date now!

Pay

You must ensure that all your staff are paid at least the National Minimum Wage for their age.  These are:

Age Rate from 1 April 2016 Rate from 1 October 2016
Workers aged 25 and over (National Living Wage) £7.20 an hour £7.20 an hour
Workers aged 21 and over £6.70 an hour £6.95 an hour
Development rate for workers aged 18-20 £5.30 an hour £5.55 an hour
Young workers rate for workers aged 16-17 £3.87 an hour £4.00 an hour
Apprentices under 19, or over 19 and in the first year of the apprenticeship £3.30 an hour £3.40 an hour

Probationary Period

There is no statutory requirement for a probationary period however, it may focus the employer on making sure that the new recruit is up to scratch.

You should carry out a thorough and planned review BEFORE the end of the probationary period.  Outcomes of the probationary review may be to pass, extend or fail the probationary period.

If you have concerns during the probationary period, don’t wait until the end to address them.  If the new employee’s performance issues are affecting the business you may decide to dismiss earlier than the end of the probationary period.

You may wish to withhold contractual entitlements (over and above statutory entitlements) for employees during their probationary period, or in some cases for the first 12 months.  For example, if you offer enhanced sick pay, employees would not be eligible for this until after a certain period of service.

Be aware of discrimination.  Although employees with less than 2 years’ service are not eligible to submit a claim to Employment Tribunal for Unfair Dismissal, they are eligible to submit a claim for discrimination at any point.  There have been successful claims on the basis of discrimination before the claimant has even been interviewed!

It often seems that when an employee is considering submitting a claim to an Employment Tribunal, every friend and relative becomes an HR expert offering support and advice to claim as much as they can from the employer. Not every firm can employ their own HR department or afford High Street solicitor costs so you may want to consider outsourcing your HR to Honest Employment Law Practice (HELP) – we can offer cost-effective (from £750 for a full 12 months support including the production of contracts of employment) and one-to-one professional support to ensure you get things right first time – every time.

*Please note the above guidance is of a general nature and performance issues should be dealt with on a case by case basis.

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