We were sorting out ending the current contracts and offering new ones that mean the business could service its existing customers at times when the customers wanted service.
I was surprised to find that all four staff were on contracts that offered one month’s notice. Their statutory entitlement would otherwise have been one week.
Three week’s additional notice x four staff is another 12 week’s notice.
This is money that small and struggling business had to fund at a time of great financial hardship when the owner wasn’t getting paid at all.
Why were the staff on contracts that offered so much more than the basic entitlement?
I asked their boss. “Oh we had an HR consultant who told us this was best practise. We didn’t have enough money to get out contracts done properly so we just copied some we had from when we were employees“.
When it comes to money, an employment contract is what a court is going to make you do, come what may.
The commonest problem is contracting to pay money you can’t afford. This constant ‘gold plating’ or employment law by government, large companies and even advisors makes small employers frightened to take someone on. They worry about being able to afford notice if things go wrong.
In times of high unemployment and economic uncertainty, let’s not add to employers woes.
If you want to take someone on:
- anyone with less than one month’s service has no right to statutory notice
- after one month statutory notice is one week
- after two year’s service. It’s two weeks
There is no legal requirement to go beyond this. You may need to if you are recruiting someone who is in a job with longer notice, but that is something you negotiate, not something you are obliged to do. If you are taking someone off the dole – you can get to longer notice later IF you want to.
It is important you set in writing out at the recruitment/contract stage that your notice is one week – otherwise you could get stuck with ‘reasonable notice’ which might turn out to be a month if they are monthly paid (or longer if really senior). If you don’t sort out this simple step you will end up spending money you don’t need to.
If you’d like to know the real deal on getting yourself flexibility and not making commitments you can’t afford join one of our free teleseminars and start saving yourself money.
Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy. Tel: 08452 303050 Fax: 08452 303060 www.irenicon.co.uk twitter/annabelkaye