Employment

Guide to Employment Law for Start-ups: Getting it right from the start

As a start-up, tackling an assortment of challenges, employment law is often one of the more unfamiliar areas to grapple with.

However, it is essential that proper contracts and handbooks are in place as soon as you start taking on staff. A solid contract and the correct policies and procedures can reduce the risk of any misunderstandings later down the line.

Preventing issues from arising

Employment contracts can be oral or written, however, as of April 2020, all employees must be given a written statement of terms of their employment within 2 months of commencing employment. This must include:

  • The names of the employer and employee/ worker;
  • Job title, description and start date;
  • Remuneration;
  • Hours of work;
  • Holiday entitlement, training, and other benefits; and
  • Notice needed to terminate the contract.

As such, it is often beneficial to simply provide staff with a contract when they begin employment to prevent any potential breach of this requirement and any misunderstandings in the future.

A good contract and handbook, with relevant policies, is a good way of minimising the risk of issues arising. Even when they do occur, a clear policy can help guide both an employer and employee through a difficult process and assist with establishing a fair outcome.

Policies to consider implementing are as follows:

Required by law Strongly advised
  • Disciplinary procedures and rules
  • Bribery
  • Grievance procedures
  •  Equal opportunities
  • Information about pensions
  • Data protection
  • Health and safety (if 5 or more employees)
  • Family Leave
  • Whistleblowing
  • Sickness Absence

Protecting Intellectual Property

Contracts are a vital part of establishing a strong relationship between staff and the business. For many new businesses, IP is the most valuable asset they have. There are several ways of protecting this, primarily by having strong confidentiality clauses in place. However, it can also be beneficial to include a range of restrictive covenants to protect your business. Restrictive covenants can take the following forms:

  • Confidentiality
  • Non-competition
  • Non-dealing
  • Non-solicitation (of clients or customers)
  • Non-poaching (of employees)

Correctly enforcing such covenants can restrict an employee’s actions even after they have left the business. However, where covenants have been drafted too broadly or appear to be unreasonably restrictive then they may not be enforceable. As such, it is important to seek advice to ensure that your covenants are drafted correctly to provide your business with the best protections.

When it goes wrong

There are a number of claims an employee can seek to bring in the Employment Tribunal, ranging from harassment at work and discrimination to unfair dismissal.  Robust contracts and policies are essential to minimise the risk of litigation.

The take-home

Whilst implementing contracts and drafting handbooks may appear daunting, having these in place from the start can go a long way to protecting the business and reduce the risk of issues later in the employment relationship.

We would be delighted to speak with you if you have any concerns or queries.

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