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Employing Staff

As a general approximation, an employee will cost you twice what you pay them.

In the litigious world of 2006, the employer, at the moment of advertising for an employee, should plan ahead for the time when that employee needs to be laid off.

Notwithstanding all the pitfalls for an employer, the UK is still one of the easiest countries in Europe to hire and fire.

In brief, the employer must not discriminate against sex, religion, race, age and disabilities. The job description needs to be carefully drawn up as any later changes can only be made with the consent of the employee or their union.

Make sure the prospective employee is allowed to work in the UK by checking their passport (European Economic Area), birth certificate or with the Home Office for a work permit or asylum registration card. Keep copies of all documents.

An employment contract must be given to an employee within the first two months of their employment. It should lay out the terms and conditions of the company, their job title and job description, the date they started, their pay and intervals between payments, the length of notice on both sides to leave, their working hours and holidays, disciplinary and grievance procedure and a confidentiality clause to cover sensitive company issues when they leave.

More and more companies now make the employment contract of limited duration, to be renewed if both parties are satisfied. This gives the employer more control over the situation.


There is a minimum wage of 5.05 per hour (On 1st. October 2006 this will increase to 5.35 for workers aged 22 and over) but this affects only a small proportion of the jobs in commerce and industry. Usually the pay offered has to be well above the minimum wage to fill the position. There are also regulations governing temporary workers and home workers. For detailed information, go to

Time off

Time off for an employee costs you money. Disputes over time off are a major cause of dissatisfaction in the workforce. It is better to spell out your company's policy regarding paid and unpaid time off and holidays early on.

Four weeks holiday is statutory after a year in employment. This can include the 8 annual UK public holidays and many firms now close between Christmas and New Year for three to five working days. It depends on the policy you make for your firm.

Many organisations, especially in the public sector, have an allowance for six to eight paid sick days a year. If an employee is not sick, the theory is that they lose those days. In practice, the days are taken anyway and often on a Friday and/or a Monday making a mockery of the original good intentions of the allowance.

If an employee is sick and unable to work for four consecutive days or more, they must be paid Statutory Sick Pay (SSP). If they qualify for SSP, the weekly rate is 70.05 in the 2006/07 tax year. If the employee is unfortunate enough to be very sick, SSP is payable for up to 28 weeks.

The employer may be able to reclaim some of the SSP payments from the firm's National Insurance payments or Income Tax payments.

Any SSP payments made need to be recorded on HM Revenue and Customs form SSP2 and kept for three years. Any sick pay you recover must be entered on forms P14 and P35 each year.

The normal working week must not exceed 48 hours for most workers and they have the right to a 20 minute rest break after working six hours and also eleven hours rest between working days. Night workers and workers under 18 years of age are allowed longer breaks. In practice, the traditional morning and afternoon tea breaks and time off for lunch more than cover the minimum rest requirements.

An employee who is pregnant is entitled to 26 weeks paid maternity leave no matter how long they have worked for you. The maternity leave can start any time from 11 weeks before the baby is due and the employee must inform you that she is pregnant 15 weeks before the anticipated birth. She can also take 26 weeks unpaid maternity leave and her normal conditions of employment continue, including accrual of leave, till she returns to the same job.

Fathers are allowed two weeks paternity leave after the birth.

Parents have the right to take up to 13 weeks unpaid leave until each child's 5th birthday.

Further information can be found by searching for 'maternity rights' at

Disciplinary and Grievance Procedures

It is important to spell out to employees:

  • what your company considers unacceptable behaviour
  • what your disciplinary procedures are
  • what the employee should do if they have a grievance

The Advisory, Conciliation and Arbitration Service ( ) promotes better working relations and should be your first port of call to help you draft your
disciplinary and grievance procedures. It is worthwhile using their information to formulate your procedures, as they will use the same information should any dispute come to them for adjudication.

An employee who has worked with you over 12 months has the right to complain to an employment tribunal if they feel they have been unfairly dismissed. This is one of the reasons many companies now have certain staff on 6 or 9 month contracts. It should be noted that when that contract expires the employee is said to be dismissed if the contract is not renewed.

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