Employment contracts, staff handbook, HR policies - what does your business need?
Whether you're a small business owner or you own a FTSE 100 company, it's important you get your employment documentation right. Not only is some of it required by law, but failing to do so can be costly in the event of a dispute.
In fact, it's arguably more important to get things right when you're a small business, because you simply may not be able to afford getting it wrong.
Not sure exactly what you need and why you need it? We've put together a little guide below to explain what kind of employment documentation (contracts, HR policies, Staff Handbooks etc.) you need and why you need them.
What is legally required?
Although an employment contract does not have to be in writing (a verbal contract is legally binding), an employer is obliged by law to provide each employee with a statutory written statement within the first two months of employment.
The statutory statement should set out the main terms of the employee’s employment and will need to include basic details such as: the employee’s name, the date they started and a brief job description.
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Should you have employment contracts?
In a word:
Whilst providing a simple statutory statement is all that is legally required, it is often advisable to provide employees with a full written Contract of Employment. The reason for this is that while a statutory statement evidences what was agreed between employer and employee, a full written contract contains all of the terms of employment in it.
A written contract will generally be conclusive as to the terms of employment and, should any argument arise between employer and employee as to the terms of employment, both sides need only refer to the contract.
As you would expect, a full written contract significantly lessens the chance for disagreement over the terms of employment. Without one, employers may find themselves at the mercy of the judgment of an employment tribunal as to what the terms of employment were.
What other benefits are there to a written employment contract?
A full written employment contract may also contain more terms than a statutory statement. For example, employers may want to include non-compete or non-poaching provisions for certain employees.
Whatever your business, getting the terms of your employees’ employment in writing is important. Whilst a statutory statement is required by law as the bare minimum, full written contracts of employment are generally advisable as they leave no scope for argument and so can avoid potentially costly and time-consuming legal action down the line.
What our users say
HR procedures and policies
Having the right HR procedures and policies in place is key for any business.
Each employer’s HR policy is unique to its business and values. A good HR policy sets the tone as to how managers should treat staff. It also serves to reassure employees that there are procedures in place do deal with any issues that might arise during the course of their employment. Finally, and perhaps more importantly, provided the rules are fair and consistent, it means you can rely on it in the event of a dispute.
Because each business is unique in terms of size and ethos, some will require detailed and extensive HR procedures and policies, whilst some will need only a very light touch. What’s important to bear in mind though is that employment law is a complex area with lots of rules and regulations. Whilst only some policies and procedures are prescribed by law (e.g. a written health and safety policy for companies with over five employees, or formal grievance and disciplinary procedures), many businesses realise that proper HR policies and procedures will help ensure their business runs smoothly and can significantly limit the chance for costly employment claims.
Ultimately, it’s important to consider what’s best for your business and employees. This is likely to depend on the size and culture of your business. A quick conversation with a specialist employment lawyer will give you everything you need to know to decide exactly what is right for your business.
Declan is an employment lawyer who takes a particular interest in helping early stage startup companies get to grips with the legal aspects of their fledgling businesses.
James is a partner with 20 years' experience in employment law. His clients are typically SMEs and entrepreneurs who he helps to manage risk, grow, and expand their business interests.
Tom advises and represents clients in all areas of UK employment law. Tom prides himself on providing clear, realistic, expert advice combined with absolute professionalism. Tom is committed to achieving the best possible outcome with outstanding service and unrivalled value for money.