Top 5 Employment Law Issues for SMEs

By July 24, 2019 Insights
Top 5 Employment Law issues

The basics of employment law issues for SMEs cover a range of topics. For an SME, the subject is an important one to master. A successful business naturally needs employees to grow and to operate. But if your business doesn’t follow the law when employing people, you could end up hurting your operations and brand image.

Whilst employment law is something constantly on the cusp of change, it’s crucial to understand the bigger picture as well. There are certain employment law issues for SMEs you must understand before you even hire your first employee. The below five employment law issues are the most crucial and consistent subjects you must navigate to achieve business success.

1. Statutory Employment Rights

One of the top issues is enforcing statutory employment rights. These include things like the employee’s right to:

  • Be paid at least a minimum wage – Notice that the UK minimum wage increased this April.
  • Receive holiday and paid sick leave.
  • Claim parental entitlements, including paid maternity leave.
  • Work without being harassed or discriminated against.
  • Not have an employment contract changed unilaterally.

These rights are minimum requirements you must meet as an employer, although most employers offer more generous terms. It’s important to understand that you need to comply with these statutory rights as well as any other rights and responsibilities you have in the employment contract.

2. Employment Contracts

There is no legal requirement to provide employees with a written employment contract. This is because a contract will automatically exist from the moment an employer offers a job and the employee accepts it – whether or not there is a written document to state this. However, it’s advisable to have a written employment contract because it can help in cases of termination of employment and other employment issues.

While there is no legal requirement for a written employment contract, employees are entitled to a written statement of the terms and conditions of employment where their employment lasts for one month or longer. Currently, employers must provide this within two calendar months from the start date of employment and it must include things like:

  • Name of the employer and the employee
  • Job title
  • Start date and possible termination if contract-based work
  • The amount of pay and hours of work
  • Notice periods

The contract should be as detailed as possible to avoid misinterpretation and problems of enforcement. For most SMEs, it can help to draft the contracts with employment law specialists. This ensures you limit the business’ exposure to risk and problems, providing adequate protection for your business and the employee.

3. Harassment and Discrimination

Workplace harassment and discrimination have become central topics of discussion in terms of employment law issues for SMEs. It’s against the law to discriminate a job applicant or employee based on characteristics such as age or sexuality. Furthermore, there has been a lot of focus on ensuring gender equality in the workplace. More recently, private organisations with 250 or more employees have to report gender pay gap figures. Whilst there is no enforcement against companies that have unequal gender pay, these reports can hurt companies in terms of brand reputation.

Furthermore, the reporting could lead to legislative changes in the future and there are workgroups still examining issues of workplace discrimination in different forms. While some of these ideas are not enforced or mandatory, it’s important for SMEs to be aware of them and to work towards protecting their employees from harassment and discrimination.

4. Protection of Business Interest

A business should never overlook the importance of protecting its interests and thus, employment law issues for SMEs should never be thought without consideration to business interests. Your business should make sure employment contracts and employee relationships emphasise the protection of:

  • Confidentiality
  • Client connections
  • Intellectual property

In many cases, it could be appropriate to include clauses preventing employees from leaving and becoming employed by a competitor or using their position to poach clients or staff.

5. Employee’s Personal Data

One of the more recent changes to employment law has been the introduction of the General Data Protection Regulations (GDPR). The EU-wide legislation created new obligations for employers in terms of employee’s personal data and how it should be kept and processed.

According to the law, personal data must be processed lawfully, fairly and with great transparency. For example, employers must provide detailed information on how they process employee data. The consequences of non-compliance can prove costly so it’s important a business puts enough effort and safeguards into keeping any private data, whether customer or staff, safe.

The Implications of Brexit

The above employment law issues are those constant topics your business must understand. Within these areas, legislation can create small or major changes companies need to keep an eye on.

Speaking of change, the most crucial issue for business now is Brexit. The conditions on how the UK leaves the European Union can mean different things to employment law. Predictions are currently hard to make because it remains unclear whether the UK leaves with or without a deal. We’ll keep you posted on the consequences and what they mean for your business.

Talk to Employment Law Specialists

Employment law issues for SMEs can seem complex and there’s a lot to know. It’s important for a business to be on top of the rules and regulations because a breach could be costly in terms of money but also business reputation. That’s why you don’t want to take a chance – talk to employment law specialists if you have any questions at all.

Contact us at Devonshire Green today. We can help you with the above five employment law issues for SMEs and anything surrounding them. Together we can make sure you’re a valued employer with employees working to help you succeed!