Employment Legislation and the Small/Medium Sized UK Business

Running your own business can seem an attractive option these days. Plenty of people have a dream of running their own business, and sometimes, when that offer of a redundancy package comes along, it can present an opportunity to realise a long held ambition.

It doesn’t have to be a redundancy package that sets you off on your entrepreneurial adventure, of course. It could be spotting a gap in the market, a lucky chance or a perfect storm of opportunity blowing your way that inspires you. Before you know it, you’re the proprietor of your own company and may be considering employing someone to help you – but the implications of employing someone (or even several someones) can be quite scary.

What do you need to put in place to keep you on the right side of the law?

Essential Documentation for the Small Business

In addition to public liability, employer’s liability and professional indemnity insurance (consult your insurance broker about these essential items), there are certain other essential documents that you need to put in place.

If you decide to take on an employee or employees, you will need to provide them with a Written Statement of their Principal Terms and Conditions of Employment. Employees are entitled to this document once they have been working for the employer for a month and should be provided with it within eight weeks of commencing employment. Guidance to help you with writing this document can be found on the DirectGov website and the ACAS website is also useful.

Running your own business

To support the information given in the Principal Statement, you will also need to make a Company Handbook available to your employees. Employees don’t need a copy each, as long as a full version of the Handbook is kept somewhere easily accessible by all employees (general office, staffroom etc). The Company Handbook will normally contain policies and procedures which you use within your business, including a Health and Safety Policy, an Equal Opportunities Policy, Environmental Policy and further detail regarding Absence reporting, holiday arrangements and Discipline and Grievance procedures.

Generally speaking, for a small business owner, most of this information can be found on the internet for nothing. Before investing in expensive HR consultancy, check out the free Employment Law sites, including Direct Gov and ACAS.

Health and Safety for the Small Business

All businesses are obliged by law to display the “Health and Safety at Work” poster or (if displaying the poster is not practical) are obliged to provide the same information in leaflet form to every employee.

In addition to this, every employer needs to perform Risk Assessments in their workplace and take whatever steps are reasonably practicable to lessen any risks observed during the Risk Assessment which might affect employees or members of the public.

The Health and Safety Executive publishes extensive guidance with regard to managing Health and Safety at work, including numerous free publications which can be downloaded as pdf files.

When conducting Risk Assessments, the HSE’s guidance for small businesses is governed by a common sense approach. In their view, no-one knows the business better than the people who work in it, so risk assessments are better carried out by someone from within the business than by external consultants.

In addition, the HSE provides a template Health and Safety Policy Statement which can be used by the small or medium sized business to fulfill their duty of informing employees about Health and Safety arrangements. If you employ five or more people, you are obliged to provide a written statement of these arrangements, but even if you employ only one person, you still need to let them know about the company’s Health and safety arrangements, so a written policy is probably the best way to do this.

The Written Statement of Terms and Conditions of Employment and the Company Handbook as described above are the foundation stones of your company culture and are not too difficult to put in place. Even if getting everything down in writing seems like one more chore initially, at least when all the documentation is in place, everyone in the business will have clear guidance and structures to help them be aware of the essentials which govern their working lives. There’s plenty of free assistance available too, so getting these basic documents in place doesn’t have to be too much of a challenge!