People Matters For Start-Ups – Getting It Right The First Time

Author:Ms Alexandra Thompson and Libby Payne
Profession:Withers LLP

Your business is taking off, and you are thinking of employing someone. From establishing the fundamentals at the outset, to ensuring a good working relationship and, if things go wrong, parting the ways in an orderly fashion, these essential pointers will stand your business in good stead to ensure a smooth working relationship.

Establish the fundamentals

  1. Think status - consider at the outset whether the individual will be engaged as an employee or as a self-employed person. Employment status is important for a number of reasons, including the individual's tax position and legal rights. Certain important statutory rights (for example, the right not to be unfairly dismissed and the right to maternity leave and pay) apply only to employees.

  2. Recruit smart - take a professional approach to recruitment. Cast the net widely (e.g. by advertising) and draw up a job description that sets out the skills and knowledge required for the role. Avoid any statement or implication that suggests you will discriminate (e.g. using phrases like 'recent graduate' could discriminate against older people). Obtain at least 2 references, do thorough background checks, check they have the right to work in the UK.

  3. Tailor your contract - all relationships with individuals should be documented - and by law, you must send a written statement of terms of employment to employees. The more senior and critical to the organisation an employee is, the stronger the case for paying close attention to the details of the contract (e.g. in relation to post termination restrictions). Remember that the contract is not always king and cannot override certain statutory rules and obligations.

    During employment

  4. Use a probationary period to manage expectations at the start of the relationship. Make sure the period is long enough for you to judge the employee's performance. 3 to 6 months is usual. Make sure that you monitor performance so that you can make an informed decision about whether to confirm an employee in post.

  5. Have up to date policies reflecting current practice - It is better to have short, accessible policies that staff read and engage with than long documents that no-one reads. Ensure that you make it clear that you can amend your policies and they do not form part of the contract. Some policies are critical - for example, equality, health and safety, grievance and discipline (where the basic requirements are set out in a Code of Practice produced by ACAS)...

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