Contrary to popular belief that only employees are suffering in the rampant redundancy problem in the UK, small businesses are also getting their share of the burden. While workers are losing their jobs, the other half of the story is the fact that small companies are shutting down too. Because much of the attention is on the individual employees, little is known about how small enterprises are biting the dust even more than we could have guessed.
In the midst of the redundancy scare, more and more employees are being vigilant about their employment contracts. And because it’s been an old habit for small companies to DIY practically everything including drafting employment contracts for employees, they usually fall into the cracks when it’s time for the laid-off workers to make their claims.
There were a lot of cases where the contracts offered more than what the company could afford to give. The usual reason was the failure to get a Lawyer to draft a specific employment contract, and instead just relied on common practice as usually solicited by Human Resources experts. Even worse was the fact that some of these small entrepreneurs would just copy their previous employment contracts because they didn’t have the money to pay for a lawyer. It’s ironic that the consequence of their frugality made them pay even more than they can afford.
If you’re one of those employers who have failed to seek the services of an employment lawyer to write the employment contract, here is some advice…
1. Read your contract. Are you prepared to do all the things it says you will do (if the situation arises)? If not, you should consider changing it. Being ‘in breach of contract’ can be a big problem and making promises in writing you don’t intend to honor just documents your failure.
2. Check the handbook. If your contract refers to a handbook, make sure you read this too, as its terms will also be binding.
3. Ask questions. Do you understand your contract? Are there grey areas you just ignore? Does your staff understand their contract? Ask them if they have read it and know what it means – you might be surprised to find out.
4. Issue the documents. Some bosses keep contracts in a locked drawer and don’t issue them. If they are no good, get them changed, if they are good you need them out there doing what you need them to do.
5. Keep copies of the signed terms. You may need to show someone had a copy to make sure you chase up for signed copies and keep them locked away.
When it comes to money, an employment contract is what a court is going to make you do, come what may. It is extremely rare for an employer to be sued for giving their staff more money than they were entitled to! The most common problem is contracting to pay money you can’t afford.
Redundancy is not something anyone wants to happen. While the UK employment law makes it possible for workers to make claims, small companies must also be made aware that they also need to hold their guard. Getting a lawyer to sort out employment contracts is a small company’s best safety precaution.