Sometimes clients say to me that they are recruiting friends to help them start their business or say that they have never had a staff problem so why go to the expense and formality of having an employment contract, particularly when they have either known each other or been working together for years without a problem.
Legally employees need to have a contract of employment within two months of starting work. It confirms what was agreed at interview so there is no room for doubt. This works both ways. Often nothing is written down at interview so ‘promises’ made can be conveniently remembered or forgotten. It also starts the relationship off on a professional footing.
Then an MD may source a standard employment contract from the Internet believing the job is done. This may be appropriate for a simple business but rarely are businesses simple and staff matters are often complex.
Thinking about what you want from an employment relationship is often time well invested and will resolve issues when they occur later. There will always be a ‘when’.
So specific things for you to consider might include:
- What degree of confidentiality do you want to create? How are you going to protect intellectual property created in your business?
- What restrictions do you want to put on staff when they leave?
- How do I claw back monies owing to you by a leaving member of staff?
- Should l make my bonus arrangements contractual?
- What if l move offices in the future?
- What is my approach to sick pay going to be?
How will friends react when they are given an employment contract? Differently is the answer. This is not about being mates, it is about generating revenue for you and seeking 100% commitment from your employees. Often working for a friend doesn’t quite guarantee that commitment when the business is not quite on track and then you get into a difficult grey area.
So really think about what you want, enshrine this in an employment contract so that the rules are clear. One of the key foundations is then in place as you grow your business. Posted by Stephen Cowburn – for a confidential discussion on this and other employment related matters call Stephen on 07974 425361 or email firstname.lastname@example.org