Hiring employees: maximising your returns

Hiring employees: maximising your returns

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Author: Nick Pritchett

Recruitment company, Manpower, has reported that the UK's employment situation is the best since the recession began, and that recruitment is set to increase.

As we eagerly await the first green shoots of both Spring and economic recovery it is hoped that this news marks the beginning of a positive trend for both public and private sectors.

If your organisation is planning to take on new starters, there are a number of legal issues of which to be aware when re-stocking the employment pool:

Contracts

Put the proper documentation in place to avoid disputes later on.

It is unlawful under the Employment Rights Act 1996 not to give an employee written particulars of the main terms of their employment within two months of them starting work. It is also essential for both employers and employees to have certainty over the terms that govern the relationship between them. Issues relating to things such as salary, bonus, location of work and benefits are much easier to resolve by reference to a written document rather than what may or may not have been said by each party during the recruitment process.

Probation

Utilise a probationary period to make sure you have got the right person for the job.

By including a term in the employment contract which provides for a probationary period an employer gives themselves flexibility to ensure the individual who so impressed at interview actually is right for the role! It can also be both a 'carrot' and 'stick' to get the best out of an employee from day one.

Probationary clauses commonly provide for say a three month period (which may be extended at the employer's discretion but on written notice to the employee) during which the employer or employee can terminate the employment on very short notice.

Probation should never be used capriciously, but similarly should not be rendered useless by letting the employee drift through the three or six month period without any direction or instruction to improve if this is required. Employers should be aware that if they do nothing to extend a probationary period, it will generally be taken to have ended on the date specified in the original contract of employment so they should keep any probationers under close review and make a diary note reminding about the end of the probation.

Protection

Ensure your business information is secure.

Ensuring that every employment contract contains the necessary provisions to protect sensitive information can prevent loss of valuable data. Information about customers, suppliers, processes, future business plans and finances which fell into the hands of competitors could be seriously detrimental.

Although there is an implied duty of confidentiality imposed on an employee, an express clause is always preferable as it can refine and expand the extent of the employer's protection. Contracts should expressly define 'confidential information' as it applies in the relevant sector and particular business and explicitly state that the duty to keep such information confidential extends beyond the end of the employment relationship.

Also consider whether employees will be creating any intellectual property in the course of their duties to which the business would want to retain the rights. This is particularly important in technical roles and industries, but can apply equally to anyone that creates documents or systems such as schedules, rotas or data bases.

Post-termination obligations that place restrictions on ex-employee's activities for a certain amount of time after the end of their employment (restrictive covenants) are notoriously difficult to enforce. To stand the best chance of being effective any such terms should be tailored specifically to the individual to whom it will apply and the role they will be carrying out.

The key thing to remember is that each restriction must go no further than necessary to protect the employer's legitimate business interest in its sensitive information. For example, a restriction of six months for a senior employee who is likely to have a high degree of inside information such as market strategy, and preventing that employee from working for a group of named competitors for six months is likely to be enforceable, whereas a similar restriction for an employee in the post room is likely to be considered somewhat over zealous and therefore unenforceable.