Forum of Private Business Employment Guide First edition published
January 2000 This edition October 2016
Published by
Forum of Private Business Limited Ruskin Chambers Drury Lane Knutsford Cheshire WA16 6HA
Telephone Email Website
Copyright
© The Forum of Private Business Limited 2016
ISBN
978-1-871929-45-4
01565 626001 marketing@fpb.org fpb.org
All rights reserved other than templates. No part of this publication may be reproduced in any material form, whether by photocopying, scanning, downloading onto computer or otherwise, without the written permission of the copyright owners, except in accordance with the provisions of the Copyright, Designs and Patents Act 1988. Subscribers to the Guide have paid for an update and information service, which is non-transferable. The document itself remains the property of the Forum of Private Business Limited. Any unauthorised or restricted act in relation to this publication may result in civil proceedings and/or criminal prosecution.
Disclaimer The Forum of Private Business Limited has taken every possible care to ensure that the information contained in this guide is accurate at the time of going to print, and the publishers cannot accept any liability for errors or omissions, however caused. The information given by this Employment Guide cannot be taken as an authoritative interpretation of the law. Such an interpretation can only be given by employment tribunals and the courts. Before taking any further action, you may wish to consider taking legal advice. The information contained in this guide is based around the employment rules and regulations as they apply in England. While generally the same regulations apply to Northern Ireland, Wales, and Scotland, please contact the Forum of Private Business Limited should you have specific issues in those areas of the United Kingdom.
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Foreword Setting up and running a business can be incredibly rewarding but there are also many problems to be faced. Not only are there economic pressures to be handled but there is a huge amount of administration, law and regulation to be understood and implemented. Any shortcomings in a company’s operations may cause serious problems further down the line. That’s why the right information at the right time can be crucial to a business’ chance of success. The Employment Guide 2017 is a comprehensive, detailed and up-to-the-minute examination of the procedures, practices and paperwork that every business needs in order to flourish and succeed in today’s competitive and challenging commercial environment. Operating in tandem with the Forum’s helpline, it’s an essential tool for all members. In addition to these key elements, businesses need to know that they have access to legal advice whenever they need it nised legal experts and industry professionals who have vast experience in advising private, public and charity sector organisations. Specialising in providing a wealth of pro-active advice and support, including representation in caution interviews, tribunal advocacy, accident investigation and guidance through court proceedings, rradar helps you to avoid the risks, costs and dangers that are associated with regulatory investigations and prosecutions. Any conversation you have with rradar will remain confidential under the rule of legal privilege, meaning that it can’t be used against you by a claimant, the police or other organisations. Supported by rradar and with the full resources of the Forum behind it, the new 2017 Employment Guide is the an essential tool for anyone interested in running a successful business.
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Forum of Private Business
Employment Guide – 17th edition Contents Foreword Introduction About the guide
Section 1 – Recruitment Recruitment planning Employment status Other types of working arrangement The recruitment process Pre-employment checks
Section 2 – The contract of employment, induction and probation The contract of employment The induction process The probationary period
Section 3 – Managing people Personnel records Data protection Working time Holidays Pay Absence Monitoring progress Transfer of undertakings
Section 4 – Managing relationships Human rights Family-friendly rights Relationships in the workplace The Bribery Act Information and consultation Trade unions
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1 3 3 5 15 21
27 29 40 42
45 47 48 51 55 58 59 68 73
79 81 82 92 95 96 98
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Section 5 – Equality Equal opportunities in the workplace Discrimination Equal opportunities policy Protected characteristics in the workplace Employment practices and protected characteristics When someone complains about unlawful discrimination
Section 6 – Discipline and grievance Disciplinary procedure Grievance procedure Whistle-blowing
Section 7 – Dismissal and redundancy Dismissals Lay-offs and short-time working Redundancy
Section 8 – Post-employment References Restrictive covenants Final pay/records Garden leave
103 104 106 107 109 115
117 119 126 129
133 135 141 142
153 155 157 158 158
Templates
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Tables
301
Summary of main employment rights Statutory payment rates for employees Control periods for common illnesses Recommended retention periods for personnel records Abbreviations used in the Guide
Index
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101
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303 305 306 308 309
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Welcome Having set up and run a number of businesses over the years, I know that you – like me – did so because you had a passion and belief for what you wanted to do and you put your money, time and effort into building that idea into a business. The issue we all face is that before you know it, you end up spending more and more of your valuable time dealing with red tape and compliance issues and less on building and developing your business for the future. You become less “PRODUCTIVE”. Nobody sets up their business wanting to spend their time dealing with red tape, and here at the Forum we know that small businesses – which make up the biggest part of the UK business community – spend on average 37 hours a month on the red tape and compliance issues*. Employment issues make up the vast majority of this time with over 14 hours being spent on staff and staff related issues. The good news is that as a Forum member you receive the best possible information, support and advice. Our job here at the Forum is to take care of the complicated and confusing stuff that takes up increasingly more of your time and requires you to seek external help. As a result you spend less time on these issues and less money on external consultants. For a simple and affordable annual fee your Forum membership lets you get on with doing what you do best - developing and growing your business. Our annual Employment Guide is a vital part of the information, support and advice we provide to our members. It helps make complying with regulation easier and gives you the complete confidence that your business is always up to date, compliant and protected. Within this year’s printed Employment Guide you will find more than 85 free customisable templates for you to use as and when you need them .You also have access to a team of experienced business advisers to help guide you through any employment law issue and you are kept regularly updated on new and upcoming changes as they are announced. This year’s guide has been fully revised and updated to incorporate recent and upcoming updates to employment law. And remember that our website fpb.org is updated regularly and can give you further guidance on employment law and much more. If you need further advice on any of the topics covered in the Guide, or any other business issue, our friendly and experienced helpline team is here for you on 01565 626001 from Monday to Friday, 8.30am to 5.00pm. We look forward to hearing from you.
Ian Cass Managing Director @IanCassMD
*Forum research 2016
Are you overpaying for your business banking? See if you can save £££s in minutes with our business banking comparison tool Did you know that more than 90% of SME owners use the same bank for their business account as they do for their personal account? Whilst it may seem cheaper and easier you could be losing £££s a year by paying for ‘hidden’ transactional costs and services that you may not need. That’s why the Forum has teamed up with Your Business Money to help you make the best banking decision for your business. Their comparison tool provides a complete breakdown of current and savings accounts including introductory rates. After all, if there’s no such thing as a one-size-fits all business there’s no such thing as a one-size-fits all bank account. Try the Your Business Money comparison tool and see how much you could save.
Exclusive link for Forum members: fpb.yourbusinessmoney.co.uk
Your Business Money is a trading name of PBF Technology Limited, an appointed representative of Resolution Compliance Limited (FRN: 574048) which is authorised and regulated by the Financial Conduct Authority. PBF Technology Limited is registered in England and Wales, No 09902685. Registered office: Rational House 64 Bridge Street Manchester M3 3BN.
About the Guide This Employment Guide is designed to help you deal with employment law. It is written in plain English and gives you practical information on handling issues from recruitment to retirement. We update the guide once a year and our website fpb.org is kept up to date to make sure you are always informed of new and upcoming legislation. The Guide is divided into eight sections: Section 1 – Recruitment Section 2 – The contract of employment, induction and probation Section 3 – Managing people Section 4 – Managing relationships Section 5 – Equality Section 6 – Discipline and grievance Section 7 – Dismissal and redundancy Section 8 – Post-employment Templates Tables Index
How to use the templates The sample templates at the back of this guide are designed to make it as easy as possible for you to ensure the documents you use in your business are accurate, easy to understand and comply with the law. The templates can be found in the members’ area of the Forum’s website at fpb.org. You can choose to personalise them by downloading them and adapting them to the needs of your business.
If you need further advice and support, please contact the Forum’s member helpline on 01565 626001 between 8.30am and 5.00pm Monday to Friday. If you are faced with an issue, please contact the helpline before taking any action to ensure your insurance will cover you.
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Notes
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Forum of Private Business
Section 1 Recruitment
The development stage of any business is finding the need to recruit staff for the first time or to recruit additional staff as the business expands. A recruiting process does require considerable planning and thought. There are processes that an employer needs to take into account when considering recruiting staff, the laws that apply and the information needed to be collected from new employees. Employers can face some issues within recruitment which need to be considered when a business is planning to expand a workforce. Employers also need to consider issues within recruitment which need to be considered when a business is planning to expand a workforce, such as Tax and National Insurance. Visiting the HMCA website (hmca.co.uk) will give you more information. All templates referred to can be downloaded within the member’s area of the website fpb.org and can also be found at the end this guide.
“Forum members spend 15% less time dealing with employment law issues and use our team of advisors for support and advice via the helpline.” Katie Handley, Forum Business Development Executive
Section 1
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Recruitment planning
skills of the people you already employ against expected future demand. It may be that you have existing employees whose skills are underused, or employees who are willing to be trained in the areas where you lack expertise.
Alternatives to recruitment Think about conducting a organisation is looking for. A skills audit will ensure you are aware of the skills the organisation has available and those which are lacking, and thus help pinpoint areas for future development, whether by training or recruitment. Encourage
decide to do an audit of their skills. Template 1.1 – Skills questionnaire Depending upon what you need to achieve, it may be possible to increase productivity by alternatives such as altering the working hours of existing employees or introducing a bonus scheme with a structure of incentive payments. Think going full time. If appropriate, you could also consider the introduction of new equipment or machinery which might You could also consider subcontracting or outsourcing some of your work or even consider using an employment employment law may make these options onerous and time consuming. Once you have decided that you do need to recruit, you should make detailed plans. Selecting the right individuals is considerable expense. Get it right and the business will have a valuable asset for the future.
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Employment status
regulations apply, depending on who you decide to employ. For example, you might find that any self-employed workers you have engaged for a specific project may be able to argue that they are in reality employees, even though you are not deducting tax or National Insurance from the payments you are making to them. HMRC has a useful tool gov.uk/guidance/employment-status-indicator which can assist you in determining employment status.
Employees An employed person is engaged by another – the employer – to carry out a particular job or function, and he or she is paid for the services provided, either weekly or monthly, by either an annual salary or an hourly rate. He or she is obliged
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