5.1 Contract of employment guidelines
The contract of employment is one of the most important documents between employee and employer and is the glue that holds the two together, ensuring that both parties understand what is expected of them.
Notice period and termination of employment
Both parties can cancel the contract at any time with valid reason. In the event the employee has decided that they are not happy with the company and their decision then they are able to provide notice as follows:
-One week notice required if employed for less than four weeks.
-Four weeks' notice required if employed for more than four weeks.
Termination procedures
The contract of employment will provide for employment termination, though it is essential that you bear in mind that no employee may be terminated without a fair and valid reason. This also requires that a process which is considered fair is followed. If an employee is dismissed with no valid reason or no fair procedure is followed, it can result in a long and tedious case against you. You should also bear in mind when it comes to termination that any pro-rata leave may be payable.
Remuneration
It is important that you outline the remuneration clearly in the contract of employment. Some companies choose to pay a minimum wage for the probation period, increasing the agreed remuneration once the applicant has completed their probation and become a valued member of the team. Paid holiday allowances need to be discussed as well.
Bonuses and Increases
There is no hard and fast rule regarding bonuses and increases, though it is always worthwhile to mention these in the contract to reduce the risk of confusion, or even frustration, on the employee's part. Increases are often offered by some companies each year, depending on employee performance. Bonuses may be performance related or provided at the end of the year. Each company has their own bonus and increase rules which should be clearly identified for the employee to understand from the start.
Breaks
Breaks must be given and should be clearly identified in the contract of employment. You may have the times set out from start time to end time, combined with any overtime and how this is paid. Some companies will close their doors for a set period of time, enabling everyone to go on lunch at the same time, while other companies will have different people taking breaks at various times, ensuring that they are operational throughout the day.
A minimum break should be one hour, preferably more. This may be divided between a coffee/tea break in the morning and afternoon of fifteen minutes each and then 30 minutes to one hour for lunch, for example.
Annual leave
Annual leave should be encouraged. It is important to ensure all employees are taking their time off each year, reducing the risk of it being forfeited. There is no rule anymore requiring companies to pay out leave which isn't taken
and, therefore, you want to ensure that employees are aware of the company's rules relating to this in the contract of employment. It should also clearly identify how much leave an employee accrues throughout the year along with the procedures involved in applying for and taking annual leave.
Sick leave
Everyone is entitled to get sick from time to time; this is completely understandable. Every company also has their own rules regarding employees advising them of their poor health and ensuring the company knows how long they will not be attending work for. The contract of employment must clearly define when and how the employee must notify the company that they are not going to be at work due to health reasons.
FACT
Only 35% of applicants are actually qualified for the jobs they apply to.
source:business2community.com
5.2 Contract of Employment
Below you will find a very basic contract of employment, which will give you some insight into what should and should not be included in the contract. This is to be signed by both the employer and the employee to make it a legal and binding document.
...............................................................................................................
CONTRACT OF EMPLOYMENT
Entered into between: ......................................................................
(herein after referred to as "the employer")
Address of employer:
......................................................................
......................................................................
......................................................................
......................................................................
and
......................................................................
(herein after referred to as "the employee")
Commencement
This contract officially begins on........................... and will continue until it is terminated, as detailed in
clause 4.
Place of work: ......................................................................
Job description
Job Title .......................................................
Duties .............................................................
......................................................................
......................................................................
......................................................................
Termination of employment
Either of the parties has the right to terminate this agreement with four weeks' written notice. This notice may be given verbally in the event the employee is illiterate.
Remuneration
The employee shall be paid in cash/by cheque/by EFT on the last working day of each week/ month.
The agreed remuneration is £.........................................................
There is also a weekly transport allowance of £......................................................
Total remuneration per week / month is: £..............................................................
(in the event there is a verbal agreement that the employee's wage will be increased after probation, then this needs to be clearly indicated in this clause with agreed amounts.)
The employer will review the employee's remuneration once a year.
Hours of work
The employee's hours of work are from .......... am to .....................pm Monday through to Friday and on
Saturday from ................... am to.......................pm.
Overtime will be expected only if agreed upon by the employee and owner / manager or supervisor.
The overtime will be paid if agreement is made at a rate of one and a half times the normal wage.
Breaks
The employee is entitled to take breaks as follows:
1. 15 minute tea/coffee break to be taken at 10am
2. 30 minutes / one hour lunch break to be taken at 12.30pm
3. 15 minute tea/coffee break to be taken at 3pm.
Annual leave
The employee is entitled to ............ days of paid leave after 12 months of continuous work. The timing of this leave is to be negotiated with the employer.
(based on the type of company and industry, you can stipulate that the employee takes all their leave at a set time when the company is closed.)
The employee is entitled to 21 days of leave after twelve months of continuous employment. These days are to be taken in addition to universal holidays.
Sick leave
In the event that you are sick, you must inform reception before 8.30am on the day of your absence.
In the event you are going to be off work for more than a day, please ensure your supervisor or manager is made aware so that they can arrange your duties to be handled accordingly.
Dress code
The company will provide you with three sets of uniforms which remain the property of the employer.
Or
The company adheres to a strict dress code. Jeans and t-shirts will not be tolerated at any time.
Smart appearance is required when at work.
General
This agreement is subject to change from time to time and changes will only be valid if they are put in writing and agreed to by both parties.
SIGNED AT ....................... ON THIS ............ DAY OF ...............................
..................................................................................................................
EMPLOYER EMPLOYEE
Witnesses:
......................................................................
......................................................................
.....................................................................................................................
5.3 Personnel record keeping
Personnel records belong to the company, but at the same time they need to be protected and treated as an asset. It is your responsibility to ensure that all personnel records are up to date and maintained accordingly. Most companies these days will keep a digital copy over a hard copy, but you may find you want to keep both.
Access
In the event an employee wishes to view their personnel record, you should enable them to do so by means of appointment. Appointments should be scheduled during working hours and identification should be confirmed before access is given. Former staff members should also be given access to their personnel file for up to 60 days after their termination.
Confidentiality
All personnel files are confidential and, therefore, need to be treated as such. You cannot discuss anything within the files without consent from the employee or your direct line manager or the owner of the company. Information contained in the file can only be released with the written consent of the employee or if you are required to share this information by law. Keep all personnel files locked away in a secure area.
What the personnel file should contain
Every company will have different rules and regulations when it comes to staff management, but in essence, most personnel records should contain the following documentation and information:
-Signed and dated contract of employment.
-Salary information, including bank details.
-Any warning or disciplinary letters, any commendation letters.
-All performance reviews.
-Records of attendance and leave.
-Any changes in terms of job description, classification, or title.
Documents to keep separately from the file, but also in a secure location include:
-Any benefits information, such as a travel or vehicle allowance or a provident or pension fund.
-Doctors` notes.
-PAYE forms and documentation.
-Any claims.
Removing any items from the record
You can remove items from the file from time to time should you receive a written request from an employee to do so. In addition to this, any suspension or probation notices, warnings, and disciplinary action notices can be removed after five years.
5.4 Disciplinary and grievance procedures
Every company needs to have clearly defined and written disciplinary rules and regulations that employees need to abide by at all times. This will identify how to deal with performance and conduct issues, it will help you identify what is acceptable and unacceptable, and you will have a clear code to follow in terms of any grievance procedures moving forward. It is important that these procedures outline how employers and employees should be acting on a daily basis. They should also outline how employers should carry out the necessary investigations to identify any facts relating to a particular grievances case.
5.5 Handling disciplinary issues
Establish the facts
The first step to handling any disciplinary issues is to establish the facts. Carrying out investigations without delay and establishing the facts can ensure that the right procedures are taken and that you have all the facts before meeting for a disciplinary hearing with the employee. The investigative stage involves the collection and collation of any evidence that you will want to use during the hearing. In the event of misconduct, there are different people who should be responsible for carrying out investigations and hearings.
An investigatory meeting can be held to identify the facts. The employee does not need to be accompanied and this meeting may not result in disciplinary action being taken. In the event the employee is suspended, the suspension period should be as short as possible and remain under review. It is important that you advise the employee that the suspension is not part of the disciplinary action and that they will remain on suspension until their hearing, for which a date should be made as soon as possible.
Inform the employee
The next step is to inform the employee that there is a disciplinary case being brought against them. This should be given in writing and provide information regarding the performance or conduct which has resulted in this being exposited to a hearing. The letter, whether the employee is suspended or not, should provide adequate information to
enable them to prepare for the meeting accordingly, including written evidence, such as witness statements. The letter should also include the notification, which should provide the details of the disciplinary meeting, from the time to the location. Also ensure you advise the employee that they do not need to attend alone.
Holding a meeting to discuss the issue
This meeting should be held as soon as possible, while still giving the employee enough time to prepare accordingly. The employer, employee, and their companions / witnesses should make an effort to be at the meeting. This is where you need to explain the complaint and go through the evidence that has been collected. During this meeting, the employee will be given their chance to set out their case and answer to the allegations held against them. It is during this meeting that the employee has the right to ask questions, call on relevant witnesses, and present any evidence they feel is imperative to their case.
Employee accompanied to meeting
Employees have the right to be accompanied to a disciplinary meeting in the event that a formal warning may be given or that further disciplinary action may be taken. The companion / witness can be anyone of the employee`s choosing, from a work colleague to a trade union representative. In order to be accompanied, the employee must make a request to do so. Each case is unique and, therefore, it is up to the employee whether they wish to attend on their own or whether they want someone with them. The companion should be given the ability to address the hearing and speak on behalf of the employee if needed. They cannot answer questions given to the employee and they are not allowed to stop the employee from explaining their side of the story.
5.6 Choosing appropriate action
Once the meeting has been carried out, you will be able to determine whether or not any further disciplinary action should be taken. The outcome should be given to the employee in writing, advising them of the decision taken. In the event of misconduct where during the meeting it is determined that the employee is not performing to a satisfactory level, then a written warning should be issued advising them that any further misconduct on their part or failure to improve their overall performance within a set period of time will result in them being issued with a final written warning.
Any final or first written warnings which are issued after the disciplinary meeting should clearly outline the performance or misconduct that is being questioned and what change is required and within what time frame. The letter should also clearly identify how long the warning remains in effect. Any further misconduct should be explained, enabling the employee to understand the consequences in the long run.
Dismissing an employee is a decision which can only be made by management with the authority to do so. The employee needs to be informed of this decision within the shortest time frame, along with the reasoning behind their dismissal. The letter also needs to give information on the date their contract ends and their right to appeal. There are certain acts which are considered as gross misconduct. These are so serious that there is no need for a disciplinary meeting, hearing, or even a warning letter. In these instances, dismissal can be given without a first warning notice. It is important that the fair disciplinary process is followed at all times.
Examples of gross misconduct include:
-Theft.
-Fraud.
-Physical violence of any kind.
-Insubordination.
-Gross negligence.
5.7 Employee opportunity to appeal
All employees facing disciplinary action need to be given the opportunity to appeal. They may feel that the case is unjust or wrong and want to appeal the decision and share their side of the story. Remember in a HR role you need to keep an unbiased opinion, and in disciplinary cases, everyone should be given their chance to share their experience. There are two sides to every story and any appeal needs to be heard without delay.
The appeal should be agreed on at a set time and place and the employee should make their employer aware of their reasoning for the appeal in writing. Bear in mind that the employee does not need to be at the hearing alone; they can come accompanied. The results of the hearing should be given to the employee in writing as soon as possible after the appeal.
Grievance procedures
There are certain steps to grievances within the work place. Every employee needs to be made aware of the company's grievances policies and procedures when they first join the company. This way, in the event that they have a grievance, they know who to turn to along with the procedure that needs to be followed. The HR department or employer should be advised of the grievance immediately, along with the nature of the grievance. In the event that the grievance cannot be dealt with in an informal manner, formal action needs to be taken as soon as possible. A formal grievance should be made in writing.
Grievance meeting
The employer or HR member should set up a formal meeting where the grievance can be shared. This meeting, as with a disciplinary meeting, should be attended by the employer, employee, and their companions / witnesses. During this meeting, the employee should have their opportunity to discuss their grievance and identify how they think it can and should be resolved. Before the meeting is adjourned, it should be identified whether further investigations should take place.
Employee may be accompanied to meeting
All employees have the right to be accompanied to the grievance meeting. The companion can be anyone from a work colleague to a trade union representative. They can address the hearing and share information on the case. They are not allowed to answer questions on the employee`s behalf or stop the employee from sharing their side of the story.
Identifying appropriate action
This meeting is a chance to identify how to proceed and what action should be taken, if any. Any decisions need to be communicated in writing to the employee as soon as possible. In the event the employee is not happy with the outcome, they have the right to appeal in writing.
Taking grievance further
It is the employee`s responsibility to advise the employer that they wish to appeal, and these appeals need to be heard at a place and time which is notified to the employee in advance. All appeals should be dealt with in an impartial manner by a HR representative or manager who is not directly related to the case in any way.
When disciplinary and grievance cases overlap
In the event an employee raises any grievances during a disciplinary process, then the disciplinary process should be suspended until the grievance has been dealt with. In the event that the two cases are related, then it may be an appropriate decision to deal with both cases together at the same time.
5.8 Leaving Procedures
There is a set process which should be followed once an employee advises that they wish to leave their current employment. Having a set procedure in place will help you throughout the process, making the transition a quick, easy, and painless one.
Confirmation in writing
The confirmation of leaving should be handed in by the employee in writing. This should include the following information:
-Notice period start date.
-Date of resignation.
-Reason for resignation.
Dismissal
Dismissals are different to an employee resigning. A dismissal is when the employer asks the employee to leave. This could be for a number of reasons.
The dismissal notice needs to provide the following:
-Written statement of reasons, if the employee has completed two years service (or one year if they started before April 2012). A written statement must be given within 14 days of request.
-Details must be clear and understandable.
Handover
-Create handover timetable during notice period.
-Advise other staff, in agreement with the employee, about their termination.
Final payments
-Pay due to the employee along with holidays not taken.
-Identify deductions, such as loans, pensions, etc.
Exit Interview
-Formal exit interview to be held.
-Discuss reasons for leaving.
-Gather feedback on possible improvements moving forward.
Company property
Get all company property and sign for them, giving a record to the employee and keeping one for their file.
Company property may include:
-Uniform.
-Office keys.
-Security pass.
You may want to consider changing:
-Intranet log in details.
-Passwords.
-Pins and alarm codes.
-Pay during notice period
Employees are entitled to their normal pay during their notice period at their usual rate. They will still be entitled to their sick pay, if they are entitled normally. It is important to note that you cannot withhold pay during an employee`s notice period.
Pay in lieu of notice
It is not uncommon that an employee is asked to leave the minute their employment is terminated, rather than work their notice period. It may be that they have access to sensitive information or you may feel that they will cause problems within the office and not perform their duties in a satisfactory manner during the last few weeks.
You can make a payment to the employee instead of them working for it. This is known at PILON (payment in lieu of notice). You can only provide this if the employee agrees and the contract of employment allows for it. It is important to note that a PILON needs to cover the regular salary, along with any bonuses up to the end of the contract.
Legalities
Focus on the legal implications when you provide a reference. Remember that you cannot give a bad reference, but you are entitled to refuse to give a reference. All references must be accurate, fair, and true.
Module Summary
In this module, you learned the ins and outs of the employment contract, what you need to include, along with a handy example. You also learned the importance of personnel record keeping, grievance and disciplinary procedures, leaving notices, and so much more. This module provided you with some basic insight into essential paperwork, rules, and regulations that you need to remember when dealing with employees.
.svg)
