Category Archives: Insight Article

This article provides an overview of the employment law you need to know and highlights the key legal issues a business needs to consider when hiring an employee. You should talk to a lawyer for a complete understanding of how it may affect you.

Before advertising to hire an employee

Ensure all staff involved in the recruitment process have had equal opportunities for training (and they continue to receive it while working for the business).

Draw up the following documentation:

• A job description, which sets out the title and main purpose of the job, the place of the jobholder within the business and
  the main tasks or responsibilities of the post.
• A person specification details the experience, expertise and qualifications, skills and abilities necessary for the job. Split the requirements between those “essential” for the job and those merely “desirable”.
• Ensure that none of the requirements in either document discriminates against any group of employees. Consider whether any requirements for specific qualifications, working hours or times, travel, age ranges, or dress are necessary for the role.
• Consider whether the job needs to be full-time or open to part-time, home working, flexible working or job sharing. If a
  business specifies that the job is full-time, it may need to justify its decision.

The advertisement to hire an employee

Should the job be advertised internally, externally or both? Consider using specialist publications, websites and agencies to target different communities, ages and sexes.

Think carefully when writing the advert. Protection from discrimination because of a protected characteristic (age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex or sexual orientation) covers all areas of employment, including job adverts. For example, avoid using language that might imply only someone of a certain age would be suitable (for example, “mature”, “experienced”, or “young”).

Inform any employees absent from work (including women on maternity leave or those on long-term sick leave) of the vacancy
to enable them to apply. Failure to do so could amount to discrimination.

The application

Use a standard application form to compare individual applicants’ answers against the selection criteria and to help avoid potential unlawful discrimination claims.

Draw up a shortlist using the same job description and person specification criteria. Every applicant should be marked against the same criteria to help avoid any potential unlawful discrimination claims.

If a business is making redundancies, it must consider applications for suitable vacancies from employees selected for redundancy ahead of external applicants. A business must offer any women selected for redundancy while on maternity leave a suitable alternative vacancy (where one is available) in priority to other potentially redundant employees.

Pre-employment health questions

In most cases, a business cannot ask potential recruits questions about their health. For example, businesses should avoid asking about applicants’ sickness absence records. However, in some circumstances, a business is entitled to ask health-related questions. For example, asking an applicant for a job in a warehouse whether they have any health problems that may prevent them from lifting or handling heavy items. Businesses can also check whether an applicant has any special requirements it needs to take into account when arranging interviews, such as wheelchair access.

The interview

Think about when and where the interview should take place. For example:

• • check whether the interview venue has access for disabled candidates;
• interviewing during a religious holiday could discriminate against applicants from that particular religion; or
• candidates with children may ask for an interview to be conducted at a particular time.

Ask all shortlisted candidates the same or similar questions to compare answers and to avoid the possibility of a discrimination claim.

Avoid asking questions about a candidate’s personal life unless they are directly relevant to the job’s requirements. For example, asking a female candidate whether she plans to have children is unacceptable.

Keep a paper trail throughout the process to demonstrate how the business reached its decision to select the successful
candidate. This should include:

• • selection criteria;
• notes on the shortlisting process;
• interview questions;
• notes of panellists’ assessments of the interviewees.

If requested, it is good practice to provide feedback to unsuccessful candidates. A failure to do so could indicate a
decision-based on discriminatory grounds.

The offer

Make a written offer to the successful candidate. Consider whether to set a time limit for acceptance and specify that
acceptance should be in writing.

A business can make the offer conditional on various criteria, provided they are not discriminatory. For example:

• providing satisfactory references; or
• confirmation that the employee is free to work in the UK or has an appropriate work permit or immigration approval to work.

Before making a job offer, ensure the applicant confirms they are not bound by any enforceable restrictive covenants from their previous job; otherwise, the former employer could sue the business (most likely along with the applicant). Employers use restrictive covenants in employment contracts to protect their business. They restrict the activities of an employee, generally after employment has ended. We frequently draft, advise on and act for clients in disputes over the enforceability of such covenants.

The contract

Consider whether the contract should be permanent or for a fixed term. If a business decides that a fixed-term contract is appropriate, it may need to justify its decision. Remember that an employee on a fixed-term or part-time
contract should not be treated any less favourably than a permanent employee should. For example, they should be allowed access to a company bonus scheme or instead receive an equivalent benefit.

Probationary periods

You can include a probationary period in the contract. This will enable the business to assess the employee and vice versa. It also
gives it the flexibility to dismiss someone using a shorter notice period of at least one week.

Probationary periods typically last between three to six months and can be extended with the employee’s consent at the end of the term. For example, if the employee was sick and the business could not assess their performance adequately, it may want to extend the period.

Before you hire an employee, speak to our employment lawyer, Karen Cole, today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

What is a restrictive covenant, and when is it enforceable?

A business can use restrictive covenants (sometimes called “post termination restraints”) to protect its interests. A restrictive covenant restricts an employee’s activities for a period after their employment has ended.

A restrictive covenant will only be enforceable if it protects a legitimate business interest. Otherwise, the courts and tribunals will regard it as an unlawful restraint of trade. The only recognised business interests are:

• trade connections (including the relationship between the business’s customers and its workforce); and
• trade secrets and confidential information.

The restriction will be enforceable if the business has a legitimate business interest to protect. However, it must be no wider than is necessary to protect that interest. The covenant must be limited in terms of the restrictive activities themselves and also apply:

• for a limited time; and
• within a limited geographical area (if appropriate).

Draft restrictive covenants carefully

You must draft any restrictive covenants carefully so that they:

• Accurately reflect each employee’s role.
• Reflect on the circumstances of the business.
• Go no further than is necessary.

The business should regularly review contracts with restrictive covenants and check whether they require updating (for example, if the employee’s role has changed).

There is little point in an employer seeking to impose blanket and uniform restrictive covenants on its entire workforce. In all likelihood, a court or tribunal would not consider them to be reasonable restrictions to impose on every employee—especially those who might have limited or no access to the employer’s customers and confidential information. For example, putting restrictive covenants in an employee handbook would be pointless. The better practice is to reserve restrictive covenants for those employees, in all likelihood the more senior ones, who will have access to the employer’s confidential information and trade secrets and a close working relationship with the employer’s customers and clients.

Consider carefully what periods of restraint might be appropriate and reasonable in the case of each individual employee. Whilst
restrictive covenants might be justified in the contracts of employees A and B, a longer period of restraint might be justified for B than for A if B holds a more senior position than A and/or has closer connections with customers than A and greater access to the employer’s confidential information and trade secrets.

Non-solicitation restrictive covenants

Customers

A business can include a covenant in an employee’s contract preventing them from soliciting customers after they have left the business. This type of covenant will be particularly useful if the employee has a strong relationship with certain customers.

Generally, the employer should restrict the covenant to customers with whom the employee had contact during a specified period before leaving. There are a number of factors the business should consider when trying to establish the length of this period, including:

• the amount of time it would take for the employee’s successor to gain influence over the business contacts;
• the employee’s seniority within the business;
• the extent of the employee’s role in securing new business;
• the loyalty (or otherwise) of customers in the particular market; and
• the length of similar restrictions in the employment contracts of competitors.

Potential customers

A restrictive covenant that attempts to extend the restriction to potential customers will be harder to enforce. However, protecting an interest in genuine prospective customers may be possible if accurately defined.

Other employees

A restrictive covenant preventing a former employee from poaching your existing employees can be, in principle, enforceable, as the stability of the business’s workforce is a legitimate business interest. However, the employer should usually limit the restrictive covenant to those employees at the same level as the former employee and those more senior to them. Any clause that attempts to prohibit the poaching of employees will need to consider the following:

• How long the former employee’s influence over the other employees will last?
• The roles of the employees over whom the influence exists.

Non-dealing

A restriction on the solicitation of customers can be extended to cover not only enticement or interference (where the former employee takes active steps) but also the provision of services where no active steps are required (for example, where the customer approaches the former employee), known as a non-dealing covenant.

This type of covenant has a clear advantage as it avoids the need to prove that the former employee made an approach, which is
usually difficult to show. However, it broadens the prohibition and may make enforcing it more difficult.

The enforceability of a non-dealing covenant will depend on the interest the business is trying to protect (for example, enforcement may be more likely if the business can establish a substantial personal connection between the former employee and the business’s customers).

Non-competition

Employees cannot disclose confidential information amounting to a trade secret (for example, a manufacturing process) after they leave your business. A business can also include express confidentiality provisions in their employment contract to protect the information. Therefore, additional restrictive covenants may be considered unnecessary, and noncompetition restrictions, in particular, can be hard to enforce.

However, there are circumstances where a non-competition restriction is likely to be enforced. For example, where the former employee’s influence over customers or suppliers is so great that the only effective protection is to ensure they are not engaged in a competing business in any way.

Speak to Karen Cole today. She frequently acts for employers and employees in drafting, advising, and resolving disputes concerning restrictive covenants.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Where the effective termination date fell on or after 29 July 2013, the maximum compensatory award (the unfair dismissal cap) is the lower of £76,574 or 52 weeks’ actual gross pay at the time of dismissal.

The maximum of a week’s pay for calculating basic award entitlement increases to £464, where the effective termination date fell on or after 6 April 2014. Therefore, the maximum basic award (30 weeks’ pay) increases to £13,920.

On the other side of the scale, the introduction of issue and hearing fees for Employment Tribunal cases from 29 July 2013 has so far resulted in a substantial decrease in the number of claims issued.

Call employment lawyer Karen Cole today to learn more about the unfair dismissal cap. 

Note: This article is not legal advice; it provides information of general interest about current legal issues.