For any micro or small business owner reaching a period of growth and creating new jobs is always an exciting prospect, but one task that should not be overlooked is creating a written statement of particulars for any new employee.
Here, Deb Tweedy, director at Hadrian HR, addresses some common questions around the importance of having a suitable written statement of particulars in place.
Do I have to provide a written statement of particulars?
Employers have a legal duty to provide a written statement of particulars, often termed an employment contract, within two months of an employee commencing employment. However, many employers still fail to provide a contract, despite this being a legal obligation since 1963.
Whilst an employer may try to use the lack of written terms to their advantage when negotiating an exit strategy or dismissing an employee the reality of the situation is that a contract of employment is still in existence where a person works for a company in return for a wage often known as the “wage work bargain”.
What are the advantages?
A written statement of particulars not only provides greater protection for both parties but it can also reduce the risk of a contractual dispute in the event the relationship breaks down.
What are the risks?
If a company fails to fulfil their obligations to provide a written statement of particulars a tribunal can award an employee between two and four weeks’ compensation, based on the weekly rate of pay with compensation currently capped at £508 per week.
Will a written statement fully protect my business?
A written statement of particulars only covers the employee’s basic rights.
However, by providing a contract of employment the employer can draft specific clauses which at best can fully protect their business and at least can clear up any disputes should a claim be brought before a tribunal.
For example, if a business owner wishes to place someone on garden leave they must be able to demonstrate that they have the contractual right to do so. Without the relevant documentation the employer could be at risk of being sued for breach of contract i.e. the failure to fulfil their duty to provide work.
The “wage work bargain” is an agreement to both provide work and pay. Therefore contractual clauses such as the right to lay off or short-time working should be carefully drafted to avoid a breach of contract. Such terms can also be covered by mutual agreement or collective agreements including with unions or national agreements amongst others. The only time an agreement would not be required is where an employer could demonstrate an implied right over a period of time.
Workers
Unlike employees, the Government are now also calling for workers to be provided a written statement of particulars from day one. However, many business owners remain confused as to what constitutes worker status, self-employed status and employment status.
Many unscrupulous business owners deliberately set out to fake contracts, disguising employment as selfemployment, in order to void their tax liabilities.
Hadrian HR’s team of specialists are here to help micro and small businesses with drafting up contracts which will ensure they remain compliant, whilst avoiding any unnecessary tax or legal liabilities.
Make sure your Employment Law knowledge is up to date at the Hadrian HR Employment Law Update Seminar, taking place on Thursday 13 September 2018, from 11.30am to 3pm at Newcastle Falcons.
