NI Employment Law Briefing for Start-UpsSeptember 25, 2015
Although employment law can appear complex and overwhelming for any start-up business which decides to take on employees, by getting a few key areas right from the start you can avoid the pitfalls and prevent problems arising.
Businesses operating in Northern Ireland should also be careful to ensure they comply with NI employment law as it is increasingly different from the position in England & Wales.
Employment Status and Contracts
Employment status can be one of the most contentious areas of employment law as different rights arise depending on whether a person who is engaged to do work is an employee, worker or genuinely self-employed. It is safest for you to assume that anyone who works for you is an employee and to take advice if you are not sure.
All employees have a contract of employment whether in writing, agreed verbally or implied. However, employers should be aware that the Employment Rights (NI) Order 1996 sets out that every employee should be given a written statement of main terms and conditions of employment within 2 months of starting and details what this should contain.
This statement usually also forms the contract of employment and can refer to other documents contained in a Staff Handbook such as disciplinary and grievance procedures, an absence management policy, an equal opportunities policy and IT usage/social media policies. Employers also have obligations to ensure employee’s health & safety at work and should have a policy in place and carry out risk assessments where appropriate.
Written terms and conditions can provide certainty and avoid disputes arising where things are unclear. They can also provide flexibility in terms of where an employee may be asked to work or what duties they can be asked to do. Additional protection can also be set out for situations where an employee leaves, for example through preventing disclosure of confidential information.
If you ever want to make significant changes to employees’ contracts you will need to seek agreement and you should be aware that if the business is bought or sold, employees’ terms and conditions will usually be protected.
It is unlawful to treat someone less favourably on the basis of their race, sex or gender reassignment, age, disability, sexual orientation, religious belief or political opinion, marital or civil partnership status, pregnancy, maternity, or part-time status.
Businesses should ensure terms & conditions of employment and employment policies and practices do not discriminate against any group. This also applies to job applicants – it is important not to advertise or ask interview questions in a manner that discriminates
You should also ensure that all employees are aware of the law in respect of discrimination as employers can be held responsible for acts of discrimination by employees, including sexual harassment or racist or sectarian abuse. Industrial and Fair Employment tribunals can award unlimited compensation for injury to feelings to victims of discrimination.
An employee with one year’s continuous service who is dismissed without a fair reason can claim unfair dismissal. This could result in a tribunal making a basic award for unfair dismissal (based on age and length of service) in addition to compensation for loss of earnings up to £78,400. Potentially fair reasons for dismissal include, misconduct, incapacity, redundancy and a catch all category, ‘some other substantial reason for dismissal’.
Additionally if an employer fails to follow statutory dismissal procedures, which ensure a reasonable process is followed; this can result in a significant uplift on the amount of compensation awarded.
Employers should also be aware of employees’ statutory notice entitlement (a minimum of one week after one month’s service, increasing by one extra week per year to a maximum of 12 weeks’ notice. Unless dismissal is for misconduct or a pay in lieu of notice clause exists, failure to give proper notice will result in wrongful dismissal.
Employers should also be careful that they avoid breaching the contract of employment. In this situation the employee may be able to resign immediately and claim constructive dismissal if the breach was fundamental, for where an employer reduces pay without agreement.
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Please note: The content of this article is for information purposes only and further advice should be sought from a professional advisor before any action is taken.