Several months ago, I was having a conversation with the owner of a pub, discussing the practicalities of having contracts of employment in his business. Ultimately, my aim was to assist him in understanding why he needed to have some form of contract of employment in circulation to protect his business, not to force him to buy something that he did not want.
Pubs often do not operate with contracts of employment in place for their employees. This created problems for them when they then tried to bring employees back from furlough leave, only to discover that those members of staff had obtained secondary jobs during furlough and would not be returning to their roles in the pubs.
“What do we do?” was the natural question that many pub owners were asking. “How do we get them back? How do we get compensation from them for them leaving us in the lurch like this?”
Unfortunately, without a written contract setting out that those employees had to seek permission from their employer before accepting other work (either during furlough leave or otherwise), it would be a costly effort akin to grasping at straws either to try and compel them to return to work or to seek compensation from them. Moreover, where would be the financial benefit in trying to claim compensation from someone who likely did not have the assets to pay any damages, even if the claim was successful?
From a purely commercial perspective, it was far most cost-effective to simply hire new staff to replace those who weren’t coming back and to make do as best as possible in the meantime, than to enter into protracted litigation over the matter.
In the particular conversation that I was having earlier this year, the focus was on staff in pubs leaving at the drop of a hat, either because they had found other work and couldn’t care less about giving the proper contractual notice or for other, far more dramatic reasons.
I explained to the pub owner that contracts of employment are a necessary part of the employment relationship: they create certainty in terms of the rights of and expectations placed on both the employee and the employer, they are pivotal if things go wrong and there can be penalties if an employer does not provide a contract of employment on or before an employee’s first day of employment. For instance, if a dispute arises, the employee can ask a tribunal to determine his or her contractual terms of employment based on the reality of the actual working relationship (which would surely be embarrassing for any employer) and, in addition to that, compensation can be awarded.
The pub owner then gave me examples of the kind of behaviour that some of his employees got up to when they thought his back was turned. Some of it was of the “hand-in-the-till” variety, whereas other aspects of it were far more intense. In a nutshell, all of it was capable of being gross misconduct.
Ultimately, he respected my position that a business needs to have contracts of employment in place and I respected his position that he felt that he was in a strong enough position to defend himself against any potential claims from his employees. However, discounting the horror stories that he had told me about his industry (and I do not count the “hand-in-the-till” behaviour amongst those horror stories) and writing purely from a “black and white letter of the law” perspective, I was not convinced that he was in a strong enough position to justify not giving his employees some form of contract.
After all, the businessperson who has met their legal obligations is in a far stronger position to defend themselves than the businessperson who has not. In other words, it is not enough that the other party has done a lot of things wrong: just as in the civil courts, a person seeking the empathy of the employment tribunal must go there “with clean hands”.
That is why contracts are practical, essential documents for all industries that hire staff, whether they are employees or otherwise.
If you would like to discuss this further and see how I can help you and your business, please contact me at RHiron@setfords.co.uk or on 01202 076864.
How secure are you that your staff are meeting the needs of your business? Are you taking on employees or are you exploring different ways of engaging staff?
