3 key common pitfalls that happen to employers

1. Not providing a complete written statement of employment particulars

Employers are required to provide employees with a written statement of particulars of employment not later than the beginning of employment. This must include key details about the employment relationship such as pay, hours of work, place of work, holidays, benefits, details regarding disciplinary and grievance procedures as well as notice periods.  This statement also has to include details on training as well as paid leave such as various types of family leave. This is often provided in a contract of employment with other additional terms. If enhanced pay is provided, then this should also be covered. 

However, often employment contracts do not cover the minimum requirements and this creates problems later down the line, especially when an employer is considering dismissal. Often the written statement of employment particulars has not been updated with changes to the original terms which is a requirement under the legislation. 

An employee can complain to an employment tribunal if an employer has failed to provide this written statement of employment particulars or a notice of change as well as if it is incomplete or inaccurate. Clients are often surprised that this claim is added to another claim and potentially increases compensation. 

Action: Check your written statements and/or employment contracts are compliant with current legislation and update your employees in writing with notice of any changes. 

2. Failing to properly consider notice provisions 

There are minimum notice periods that are required by legislation that an employer is required to give an employee to terminate employment. An employer can increase these notice provisions in a contract. However, notice provisions are generally not given enough consideration at the start of employment and often employers face various consequences that they had not anticipated when they come to dismiss an employee.  For example, if an employer has included a provision that notice has to be in writing for it to be effective then it has to be in writing and has not started to run until this has been completed. Written notice provisions are often included so notice given is crystal-clear and provides a useful safeguard against disputes that arise from heat of the moment resignations. However, employers have often been caught out and had thought they had already given notice when they had only verbally given this but notice had to be written under the contract of employment. Notice should also be clear and understandable as otherwise this can cause complications.

Pay in lieu of notice clauses ( PILON) should define  how pay in lieu of notice is to be calculated including if benefits as well as salary are to be included. If not, then this can also lead to disputes.

Also, if an employer has not included a pay in lieu of notice clause, then whilst an employer could technically still pay in lieu of notice then this would represent damages for breach of contract. In such circumstances the pay in lieu of notice includes sums for other benefits that would accrue during the notice period such as pension rights, private health care insurance and the use of a company car. If there was no pay in lieu clause and the employer does pay in lieu of notice, then as this is potentially in repudiatory breach of the contract, any restrictive covenants would also be unenforceable.  This may not be an issue for an employer as they may not be important but sometimes this is a knock on effect that employers had not anticipated.

Action: Seek legal advice as to your notice provisions at the start of employment so you don’t get caught out later!

3. Not considering tailored restrictive covenants either at the start of employment or again if a role changes

The most common rights and obligations that survive termination of employment are restrictive covenants. These are used by employers to protect customer connections, confidential information and the stability of a workforce for a defined period after termination.   Often there are non-dealing or non-solicitation clauses in employment contracts.  These covenants may include non-complete clauses, which prevent an employee working for a competitor for a certain period after leaving an employer. To be enforceable restrictive covenants must satisfy various requirements including that they must be reasonably necessary at the time they were entered into to be enforceable. They should be tailored to the individual and the legitimate proprietary interests of the employer that they are meant to protect. They should also not offend public policy.

Often this is not the case and the same restrictive covenants have been used for all employees which can end up being unenforceable. 

Action: Cases on enforcing restrictive covenants turn on their own facts, so it is important that legal advice is sought when an employee starts employment and also if they change their role if you want to include them. It is important for these covenants to be reasonable in scope and duration to be enforceable.  

Get in touch

If you’re an employer and would like help on any of the issues discussed in this article then our highly experienced employment lawyers can help you stay compliant with employment laws and prevent costly claims. 

The contents of this article is a general guide only at the date of publication. It is not comprehensive, and it does not constitute legal advice. Specific legal advice should be sought in relation to the particular facts of a given situation.