Key Employment Law Issues for Small Businesses in England

More than 15 million people work for small and medium-sized businesses in the UK. As an employer of a small business, you must abide by employment law, and this can be challenging if you do not stay up to date with key legal changes. Without a dedicated department to deal with human resources, managing employees can be difficult. To help, this article will identify key employment law issues you should focus on for your small business in England. 

Employment Contracts

Employment contracts are an essential part of employment law. Even when running a small business, accurately documenting your business relationship with your staff is critical to avoid confusion. An employment contract will detail your expectations toward staff and what they can expect from you. 

Notably, there is no legal requirement to have a written employment contract with your staff members. However, it is still a good practice to have one. Employment contracts come in handy when there are disputes and can also aid in preventing them in the first place. 

However, you have a legal requirement to provide your staff with a written statement of particulars within two months of starting their job with you. A written statement of particulars should contain several points including, for example:

• your name;
• your employee’s name;
• your employee’s job role;
• the date which your employee started working for you;
• your employee’s salary rate and when this will reach them;
• your employee’s entitlement to holidays;
• terms and conditions relating to your employee’s work hours;
• notice periods required to terminate the employment contract; and 
• where your employee will work.

Payslips

As an employer, you must, by law, provide your staff with a payslip when you pay them their wages. This includes those you employ on a zero-hours contract, and where you employ agency workers, they will receive payslips via their agency.

You must include specific information on your payslip, such as:

• the gross amount of pay, which is the pay before you make deductions;
• the net amount of income that is left after you have completed all deductions;
• variable deduction amounts and what the deduction is for;
• the method with which you will pay the wage; and 
• fixed deductions such as subscriptions to trade unions.

Discrimination

Additionally, it is illegal to discriminate against others in the workplace. Discrimination is where you unfairly treat someone differently based on one of nine protected characteristics in employment law, such as a person’s race or religion. No matter how small your business is, employing staff means you have an obligation to prevent discrimination. Unlawful discrimination could result in you facing an employment tribunal.

Discrimination also includes victimisation, where you discriminate because someone has or is associated with discrimination complaints. 

Likewise, discrimination by association is where you discriminate against someone because of their association with another based on the person’s protected characteristic. 

Unfair Dismissal

All employers need to be careful not to dismiss staff unfairly. You can only dismiss your staff where you have a fair reason to do so and follow a set procedure.

If you fail to do this, dismissed employees can start an unfair dismissal claim against you and your business. The general rule is that employees need to have had two years of continuous service with your business to claim unfair dismissal. However, this is not the case if the claim is for discrimination or whistleblowing. As such, dismissing your staff should be a last resort, and you must do so fairly. 

Employers Liability Insurance

Regardless of the size of your business, as soon as you employ people, you must have liability insurance. This is a legal requirement. Not having liability insurance can cause you to pay a fine of £2,500 daily.

Employers’ liability insurance must come from an authorised insurer and provide you with cover for £5 million. It is in place to enable you to pay compensation should one of your employees become ill or suffer an injury due to working for you. 

Data Protection Law

Regardless of the size of your business, you will need to comply with data protection law. Therefore, as a small business employer, you must process data lawfully, fairly, and transparently. Likewise, in terms of your employee’s data, you must let them know how you process it. 

Key Takeaways

Employment law is relevant to all employers regardless of their business size. However, as you run a small business, knowing key employment law issues to focus on is helpful. For example, it is critical to understand unfair dismissal and your requirement to have employers’ liability insurance.

If you need help understanding employment law issues for small businesses in England and Wales, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. So call us today on 0808 196 8584 or visit our membership page.

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