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HR and employment law: the fundamentals

Whether you’re starting or growing a business, understanding your HR and employment law responsibilities is essential.

Here’s nine critical areas to consider – from recruitment, to contracts, and sick pay:

1. Recruiting top talent

Recruiting employees is an exciting time for your business, but it should be a fair process. You should ensure:

  1. The key responsibilities and aims of the role are documented in a thorough job description to attract potential employees with the right skillset and experience.
  2. The wording in your job description and the person specification is not discriminatory.
  3. Your application form captures enough information to allow you to sift out unsuitable applicants and doesn’t include any discriminatory criteria.
  4. At least two people are involved in the process when deciding which applicants aren’t suitable -to eliminate bias.
  5. You’re making reasonable adjustments for applicants with a disability.

Once you’ve decided on a candidate, you’ll need to offer them the job in writing. The job offer should set out the main terms and conditions of the role, give a start date and clarify that the offer is subject to satisfactory references, employments checks and completion of a set probationary period.

2. Employee contract fundamentals

When a worker begins employment with you, you must give them a written statement (known as the ‘initial statement’), setting out the main conditions of employment. It is made up of two parts:

The main document (known as a ‘principal statement’), which must be provided on the first day of employment:

  • The employer’s name
  • The employee’s name, job title and start date
  • How much and how often an employee will get paid
  • Hours and days of work and if/how they may vary
  • Holiday entitlement
  • Where an employee will be working
  • If an employee works in different places, where these will be and what the employer’s address is
  • How long a job is expected to last (and end date if it’s a fixed-term contract)
  • How long any probation period is and what its conditions are
  • Any other benefits (e.g. lunch, childcare vouchers)
  • Obligatory training, whether or not this is paid for by the employer
  • Sick pay and procedures
  • Other paid leave
  • Notice periods.

A wider written statement, which must be provided within two months of the start of employment:

  • Pensions and pension schemes
  • Collective agreements
  • Any other right to non-compulsory training provided by the employer
  • Disciplinary and grievance procedures.

These particulars must still be given, even where the employment ends before the two-month time limit expires. You must also provide new employees with a contract of employment within two months of their start date.

What must be included in an employment contract?

Employment contracts must include information like the employee’s:

  • Name, job title and start date
  • Place(s) of work
  • Requirements to work outside of the UK
  • Remuneration and when and how it will be paid
  • Hours of work
  • Holiday entitlement
  • Notice period
  • Pension.

As well as:

  • Whether any collective arrangements are applicable
  • Your business’ name
  • Who employees lodge a grievance with
  • How employees can appeal a disciplinary, grievance or dismissal decision.

What doesn’t need to be included in an employment contract?

Employment contracts don’t need to include details of sick pay, disciplinary or grievance procedures. They must, however, say where such policies can be found.

3. Inducting new employees

A properly planned induction process is crucial to helping your new employee settle into your business. This is your opportunity to make a good impression. You could:

  • Explain the company’s rules, give them a tour of the building and introduce them to fellow employees. 
  • Put together an induction checklist to ensure no stone goes unturned.
  • Let the employee know they have obligations as well as rights, provide them with a copy of your employee or staff handbook, ask them to have a read and return it signed. 
  • Conduct the necessary pre-employment checks before the employee’s first day to avoid any nasty surprises down the line.
  • Make sure they have a copy of the job description and are really clear on their role and responsibilities from day one.

4. Working time regulations

Under Working Time Regulations, employees have the right to:

  • A capped working week of 48 hours in seven day period – an employee can opt out of this if they wish.
  • 5.6 weeks of paid annual leave per year - this may be calculated on a pro-rata basis if they’re part-time
  • One uninterrupted 20-minute rest break if they’ve been at work for more than six hours
  • Employees under the age of 18 are entitled to a 30-minute break after four and a half hours of work.

5. Know your employees’ rights

It’s important to familiarise yourself with the statutory rights that all employees are entitled to, here are some of them:

  • An employment contract within two months of their start date.
  • To be paid at least the National Minimum Wage.
  • 5.6 weeks of paid holidays.
  • Daily and weekly rest breaks.
  • An itemised payslip detailing deductions.
  • Request flexible working after 26 weeks of continual service.
  • 52 weeks of maternity leave / 1-2 weeks of paternity leave (after 26 weeks’ continuous service).
  • If adopting a child, one parent is entitled to 52 weeks leave for one parent, and paternity leave for the other parent (after 26 weeks’ continuous service). 
  • Time off for dependents and public duties.
  • Not be unfairly dismissed.


  • If employees are aged between 22 and pension age, work in the UK and earn more than £10,000, under pension laws you must auto-enrol them into a pension scheme.
  • Statutory sick pay is payable on the fourth day that an employee doesn’t attend work due to illness.
  • Employers are responsible for all of their employees’ welfare while at work. As such, you must comply with the Health & Safety Act at all times.

6. Discrimination

Under the Equality Act 2010, it’s unlawful to discriminate against anyone because they have one or more of the nine protected characteristics. The nine protected characteristics are:

  • Age
  • Disability
  • Marital status or Civil partnership
  • Gender reassignment
  • Race
  • Religion
  • Sex
  • Sexual orientation
  • Pregnancy and/or maternity leave.

Employees should be protected against discrimination in the workplace. However, under the Equality Act, there are limited exceptions where it can be lawful to discriminate in very particular ways – for example, requiring an airline pilot to have good eyesight. Both employers and employees can be held liable for discrimination. To avoid acts of discrimination at work, you should have an Equal Opportunities Policy to set out what is acceptable and expected of employees.

7. Statutory Sick Pay (SSP)

SSP is paid to an employee the same as their wages/salary and is subject to tax and National Insurance deductions. Employers are required to pay employees who are eligible for SSP if they are off ill – not all employees are necessarily eligible.

SSP is not paid for the first three days of illness, unless the employee has been paid SSP in the last eight weeks and are eligible again. To claim SSP, employees must provide evidence of their incapacity.

8. How to deal with disciplinary and grievance issues

An effective disciplinary and grievance procedure is clear, fair and transparent. Always communicate your disciplinary procedure with all employees and make sure that you apply it fairly for everyone across the business.

When putting together your disciplinary and grievance procedure, it’s always a good idea to refer to the Acas Code of Practice. Here are some of the recommendations they make:

Disciplinary procedures should:

  • Specify the type of performance or conduct that will result in action.
  • Say what action will be taken.
  • Explain the appeal process if an employee is unhappy with a decision.

Grievance procedures should: 

  • Let employees know how and who they lodge a complaint to.
  • Inform employees that a meeting will take place to discuss the issues raised in their complaint.
  • Explain the appeal process for if an employee is unhappy with a decision.

As well as tight policy documents, it’s important to make sure that all employees who may deal with disciplinary and grievance issues are properly trained to handle the issue appropriately.

9. The importance of regular appraisal

When it comes to reviewing an employee’s performance, a once-a-year check in is simply not enough. In an age of social media, where people are used to getting continuous feedback in real-time, annual reviews are an alien concept. Make sure you have regular catch-ups to make sure everyone is on the same page.

The benefits of a regular appraisal process are huge and include:

  • An opportunity to focus on your team’s goals and performance.
  • Keep individual goals linked to your wider business goals.
  • The opportunity to look at performance highlights and challenges.
  • Enhance the future performance of your business.

Properly drafted policies, handbooks and contracts are a must and could protect your business should an employee go to tribunal. It’s a given that all management should be aware of all the business’ policies and be effectively trained in how to handle them.

In addition, to stay compliant with legislative changes, your business’ handbook is something that needs to be continually revisited. When you make any updates to your handbook, you must communicate them with all employees and ensure employees sign to confirm they’ve seen and accepted the changes. This is especially important if the handbook is contractual.

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Here at Marsh Commercial we’re more than just an insurance broker, we advise and provide practical solutions on all areas of operational risk* - including the provision of employment law support and services.

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The information contained herein is based on sources we believe reliable and should be understood to be general risk management and insurance information only. The information is not intended to be taken as advice with respect to any individual situation and cannot be relied upon as such. This article contains third party content and/or links to third party websites. Links to third party websites are provided as a convenience only. Marsh Commercial is not responsible or liable for any third party content or any third party website nor does it imply a recommendation or endorsement of such content, websites or services offered by third parties.

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