As January is often seen as the time for instigating change, we thought it would be helpful to consider some possible New Year resolutions for those of you who have HR responsibilities:
1. Signed Contracts
Do all your employees have appropriate and signed contracts of employment in place?
The law prescribes that certain information be provided in writing to the employee within the first two months of their employment. This includes things like their rate of pay, holiday entitlement and place of work. Some slightly less obvious details should also be included, such as whether any collective agreements relate to their employment and who they should raise any appeal to if they wish to challenge a disciplinary decision. In an ideal world, such statement of employment terms should be signed and returned by the employee. Whilst provisions contained in an unsigned version can still be held to be binding, it is an area ripe for dispute. Express acceptance by way of a signature removes this potential headache.
Finally, are the contractual terms up to date and relevant? Often you find that an employee has received a promotion but no additional protections have been agreed, such as post-termination restrictions on the solicitation of customers and employees. This can leave the employer exposed when that employee then leaves. Ensure that the documentation you have in place is fitting to the circumstances.
2. Appropriate Policies
Handbooks can be a great way of communicating information to employees about their rights (for example, family leave and pay rights) and responsibilities (e.g. rules about their uniform) as well as information about the employer's internal procedures (such as disciplinary or grievance processes). However, the danger is that such policies can quickly become out of date.
Firstly, employment law changes fairly rapidly. By way of example, family rights continue to evolve. For those whose child will be born on or after 5 April 2015, both the mother and father can be off work at the same time using shared paid parental leave. This is in contrast to the current model where only one parent can be off work on paid family leave.
Secondly, the employer's own personal circumstances should continue to influence and shape Handbook policies. For example, if there has been an incidence of, say, sexual harassment in the workplace, you may wish to tighten up the wording of your equal opportunities policy or, if you are experiencing a lot of staff problems caused by snowfall, you might want to introduce an adverse weather policy so that employees know what is expected of them in those circumstances.
3. Workplace Training
Having internal policies is all well and good, but do your employees actually understand and observe them?
It is always prudent to get employees to sign an acknowledgement confirming that they have received, read and understood the policies contained in any Handbook. However, that should not be the end of it. There can be legal and management advantages in going further by ensuring that employees fully understand the policies, particularly those like the equal opportunities policy and anti-harassment and bullying policy. Believe it or not, this can actually help you defend a discrimination claim brought by one of your employees. Hopefully it will also result in the smoother running of your business too.
It is therefore sensible to ensure that each employee (or at the very least, each employee who has management responsibility) receives appropriate training. Include appropriate training as part of any induction processes for new joiners and also have regular refresher training for existing employees.
4. Probationary Period Monitoring
Usually new joiners are subject to a probationary period during which their performance and suitability for on-going employment is meant to be monitored. The reality is that often this monitoring is not carried out or where it is, and problem areas are recognised, nothing is done. If you have included a probationary period in your contractual documentation, make sure you take advantage of it when appropriate.
If someone is underperforming during the initial period of their employment, the chances are that they do not fully understand what is expected of them, they need more training/support or they are simply not suitable for the role. Do not let such a situation drift on and instead be proactive. Have regular meetings with the employee so that they understand the improvement that needs to be made, extend the probationary period where needed (assuming, of course, you have the contractual right to do so) and, if the situation does not improve, seriously consider terminating the employment relationship. The advantage of dismissing someone during a probationary period is that usually (i) they are not able to bring a claim of unfair dismissal as they have under 2 years continuous service and (ii) there is a shorter notice period, often this can be as little as 1 week.
5. Holiday Pay Audit
You will probably have read in the Press about the recent rulings regarding the calculation of holiday pay. Do your current methods comply with these new judgments?
In summary, it has been held that holiday pay should be based on the employee's "normal remuneration", being all elements of pay that are intrinsically linked to the performance of the employee's contractual duties. This includes (amongst other things) overtime that the employee is required to work, commission payments, shift allowances and performance/productivity bonuses. You would be well advised to review your methods of calculating holiday pay to ensure that you are complying with the current law.
In addition, you will perhaps want to assess your potential liabilities for claims by employees in respect of periods of holiday previously taken. If there has been a break of more than three months between them taking leave or being paid holiday pay at the correct rate, their claim for backdated holiday pay is likely to be curtailed. (Note also that there are some complexities to bear in mind as the recent decisions only relate to the 4 week annual leave entitlement derived from European legislation and not the additional 1.6 weeks under domestic UK legislation. This means that in most cases, for full-time employees, the first 20 days of holiday pay may need to be at a higher rate than the last 8 days, although this does also depend on what the employee's contract of employment specifies.) Further, for claims submitted after 1 July 2015, there will be an overall 2 year limit on claims for backdated holiday pay.
As a final point, it is important to mention that there may yet be further changes to this area of law. The Government have a taskforce looking into this matter so continue to watch for future developments and repeat the necessary checks to ensure that you are in compliance.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
