So I don’t have employment contracts, what could go wrong?

You’re busy turning your ideas into reality. You’re growing your business, you’ve started hiring, but you haven’t got around to getting some proper employment contracts written. You might be thinking ‘What’s the worst that could happen?’ Well there’s more than one scenario where this could come back to bite you…

  • An employee could leave and give you very little notice – they could give you their one week’s notice today, take their outstanding holiday leave during that week, making today their last day.
  • Say you want to terminate a member of staff’s employment immediately. Without it written into a contract, you don’t have the option of paying them in lieu of notice (known as PILON) or putting them on gardening leave. Without these clauses, you have to have them around while they work their notice, which might be okay, but in lots of cases, it isn’t ideal.
  • It’s a legal requirement to have a written contract of employment in place and signed by both parties from the first day of employment; and if an employee was to take you to a tribunal for any reason (e.g. unfair dismissal or discrimination) a penalty for having not issued a contract of employment would be added to their claim. This could cost from a few hundred pounds at tribunal to thousands of pounds and losing your case.
  • A big risk is that any ex-employee could set up a company that directly competes with yours, they could poach staff and target your customers, and without anti-competition clauses, you would have no legal grounds to do anything about it.
  • Perhaps the biggest risk of not having a contract of employment, is that your people will be unsure what they can and can’t do, and that kind of ambiguity can be very demotivating. Even people in the most dynamic of organisations, like to know that they are protected by an employment contract.

Which HR policies are required by UK Law?

The great news is that it’s relatively straightforward to get robust employment contracts in place, providing clarity for your employees, and protection for your business.

If you’d like help from experienced HR consultants to create employment contracts to protect your business and banish the admin headaches that come with growing your team, we can help – take a look at our ‘Brilliant Basics’ People Documentation Packages. If you don’t quite see a match with what you need there, get in touch, as we can tailor our support to suit you.

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