Employing People A Handbook For Small Firms Accessible Version

Employing people:
a handbook for small firms
handbook
work
inform advise train with you
Acas can help with your
employment relations needs
Every year Acas helps employers and employees from thousands of
workplaces. That means we keep right up to date with todays
employment relations issues such as discipline and grievance handling,
preventing discrimination and communicating effectively in workplaces.
Make the most of our practical experience for your organisation find out
what we can do for you.
We inform
We answer your questions, give you the facts you need and talk through
your options. You can then make informed decisions. Contact us to keep
on top of what employment rights legislation means in practice before it
gets on top of you. Call our helpline 08457 47 47 47 or visit our website
www.acas.org.uk
We advise and guide

We give you practical know-how on setting up and keeping good
relations in your organisation. Look at our publications on the website
or ask our helpline to put you in touch with your local Acas adviser.
Our Equality Direct helpline 08456 00 34 44 advises on equality issues,
such as discrimination.
We train
From a two-hour session on the key points of new legislation or employing
people to courses specially designed for people in your organisation,
we offer training to suit you. Look on the website for what is coming up in
your area and to book a place or talk to your local Acas office about our
tailored services.
We work with you

We offer hands-on practical help and support to tackle issues in your
business with you. This might be through one of our well-known
problem-solving services. Or a programme we have worked out together
to put your business firmly on track for effective employment relations.
You will meet your Acas adviser and discuss exactly what is needed before
giving any go-ahead.
Employing People:
a handbook for small firms
Did you know?

Acas has a range of services and products aimed at
helping employers and managers in small businesses
many of which are free. These include leaflets and
booklets offering advice. Go to www.acas.org.uk
for more information. You will also find on our website
e-learning packages that can be dipped into wherever
and whenever you have a few minutes to spare.
We also deliver training on good practice in

employment relations as well as updates on new
employment legislation especially designed for small
businesses. These are held locally all around the
country and can be booked and paid for online. For
more details go to www.acas.org.uk/training
Contents
Introduction 5
Employing people just common sense? 5
1 Planning employment needs 6
getting the right information 6
making employment decisions 7
2 Recruiting people 8
how to avoid bad recruitment 8
getting the right person 9
3 The employment contract 12
What is an employment contract? 12
does an employment contract need to be in writing? 13
What are implied terms? 14
statutory rights 14
how can a contract be altered? 22
how can a contract be ended? 23
further advice 23
4 Pay 24
how much should firms pay? 25
Payment systems 26
Time rated payment systems 26
incentive payment systems 26
method of pay cash or cashless pay? 27
What are the problems? 27
how can problems be overcome? 28
further advice 28
5 Training 29
induction training for new recruits 30
acas training 31
6 Rules and procedures key points 32
What should rules cover? 33
breaking company rules 34
mediation 34
making known employee grievances 36
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7 Unfair dismissal 38
What is a dismissal? 38
What is a fair dismissal? 39
further information 40
8 Controlling labour costs absence and employee turnover 41
absence 41
What affects absence levels? 42
What is the size of the problem? 42
Employee turnover 43
What can be done? 44
further information 44
9 Workplace communications 45
What do employees need to know? 45
how can employees be kept informed? 46
10 Employee representation 48
Why have employee representation? 48
What forms can employee representation take? 49
Trade unions 50
recognition 50
representation rights 51
What is collective bargaining? 51
What statutory rights arise when unions are recognised? 52
reaching agreement 52
making collective bargaining arrangements clear 52
The subjects of negotiations 53
resolving outstanding differences 53
Employment relations training 54
11 Appendix 55
Examples and forms 56
Acas publications 69
Acas training 70
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introduction
Employing people just common sense?
Employing people seems a perfectly These problems can be overcome by

straightforward matter: hire them, a small investment of time
then set them to work. Many small and resources. Small firms can have a
firms consider that they have number of natural advantages:
insufficient time or resources to
devote to employment issues. close personal relationships
But as this guide shows, sensible between employer and employee
employment practices can help small
firms to be more effective, more an understanding of individual
profitable, to grow and to create more employees problems resulting from
jobs. regular face-to-face contact
Employees are most firms greatest being able to act and react quickly
asset so it is worth spending some to events.
time and effort over them. Employing
people can, if handled badly, cost We hope to build on these benefits
the employer time, money or lost by showing how good employment
profitability through: practices can help:
recruiting unsuitable employees small firms to anticipate

employment problems and so
inadequate training improve managing the business
low morale and motivation employees to know where they

stand what they can and cannot
high absence levels and turnover of do, what they can expect from their
employees employer and what their employer
can expect from them.
ineffective management
and supervision This handbook has been written to
assist the busy small firm, deal with
too many dismissals. the most important employment
areas and operate simple but effective
employment practices.
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Planning
employment needs
Key questions
how can firms get the right information?
When should decisions about employing people
be made?
getting the right A card index for each employee

information could contain information on:
Personnel records
Even in the smallest firms, new jobs personal details name,
are created and employees retire sex, date of birth, address,
or leave for other jobs. Changes in education, qualifications, previous
the workforce can cause serious experience, tax code, National
disruption unless some attempt is Insurance number, emergency
made to plan for them. By keeping contact, details of any job-
up-to-date employee information related disability.
on personnel records, firms can
make sure that unexpected changes employment details date
to their employment needs are employment began, date present
kept to a minimum. They can also job started, job title, basic pay,
provide other useful information for overtime and other premiums.
managing the business. Personnel
records kept on a card index system absence details sickness,
can be effective for small firms lateness, authorised,
but there are also computerised unauthorised.
systems that may be suitable. Users
of some personal computerised details of accidents
information (which can include
personnel records) have to register details of disciplinary action
with the Information Commissioner
visit www.ico.org.uk. training details.

To avoid unnecessary duplication Small Business Service.
of some of the information on this Tel 0845 600 9006,
1
list, the written statement of major www.businesslink.gov.uk.
terms and conditions of employment
(see pp 12-23 on the Employment The most important employment
contract) could be attached to each planning decision for small firms is
employees record form. to get right the size and composition
of their workforce.
Records such as these can be
the basis for management The costs of overstaffing or of a few
information on: redundancies are often substantial
to a small firm and insufficient
the age, sex, grade and length of employees to meet demand can
service of employees mean lost sales opportunities and
revenue.
timekeeping, absence levels and
employee turnover It is important to try to anticipate
employment needs not just for
total wage and salaries bill. next month, but for next year
and if possible for still further
The Appendix to this handbook ahead. So look at changes in
contains an example of how to set demand. Are employment needs
out a personnel record form suitable the same throughout the year or
for a card index system. are there peaks and troughs?
Do employment needs vary over
a monthly, weekly or even daily
making employment period? For instance, a shop may
decisions find that it needs more staff on
Good planning, done well in Saturdays or over the lunch period.
advance, is as important in avoiding A decision to employ full-time or
employment problems as it is in part-time staff should take account
avoiding other business problems of such variations.
such as shortage of materials,
space, capacity or case flow. It
helps if employment decisions are
not taken in haste, in particular since
job losses could result. Impartial
advice about starting and running a
business can be obtained from the
Planning
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recruiting people
Key questions
What are the effects of bad recruitment?
are new employees necessary?
What is the job?
how can applicants be attracted?
Would an application form help selection?
Which is the best way to interview?
What use can be made of references?
Hiring employees, if done badly, can how to avoid bad

be costly. It can lead to: recruitment
A few simple steps can help avoid
poor performance these problems. First ask whether
the firm really needs new employees
unnecessary training can existing employees do the
job or be trained for it? If new
increased supervision employees are needed, would part-
time workers be more suitable? Find
wasted management time out what are the jobs tasks; then
draw up a job description to help
higher absence and get a clear idea of the job. This will
employee turnover contain the major parts of the job
and its main purpose. The Appendix
lower morale. to this handbook contains two
examples of job descriptions one
for a white collar worker and one
for a manual worker.

jobcentres provide a free
getting the right person nationwide recruitment and
Once the job has been clearly
advisory service.
defined, the search for the right
person can begin. By law an
Employment agencies can also
employer may not descriminate on
assist in the recruitment process 2
grounds of age, race, sex, marriage,
and provide other services.
disability, sexual orientation or
religion or belief. All stages in the
local careers services can give
recruitment process must treat all
employers information on suitable
races and both sexes equally. The
school leavers and other young
following can help.
people who are less than 18 years
old, based on regular contacts
a person specification. This is a
with local schools.
pen picture of the ideal person
for the job. It identifies the skills
advertisements in local
and personal qualities to look
newspapers or specialist
for. It is important that there is
journals often attract good
a direct and precise connection
applicants at relatively low cost.
between the person specification
Their advertising departments
and the job description. In
will usually give advice on layout
this way the persons ability to
but companies will need to
do the job is considered, not
think about the content of their
unrelated personal characteristics.
advertisements, for example,
Employers need to be careful
brief job description, pay and
not to specify unnecessary or
conditions, qualifications required,
marginal requirements that might
career prospects, how to apply,
exclude people with disabilities.
closing date. The aim is to attract
Employers can stipulate essential
suitable applicants and reduce
health requirements but may need
unsuitable applications.
to justify doing so and that it would
not be reasonable to waive them.
internet. Employers and
jobseekers are increasingly using
internal transfer or promotion.
the internet. Applications may
Can the right person come from
also be made direct via email.
the existing workforce? If so this is
This may be particularly useful for
probably the cheapest and most
graduate or management training
reliable method.
opportunities, as many students
will have access via their
college service.
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The recruitment process can can disrupt the interview and may
sometimes be improved by using make the applicant uneasy
an application form. By getting
information relevant to the job preparations are made to put
it can help weed out unsuitable disabled applicants completely
applications and provide a sound at ease. Think about matters
basis for an interview. It can such as ease of access, the need
provide a useful pen picture of the to speak clearly to the hard of
applicant, especially for those who hearing so that they may lip-read
have little training or interviewing if necessary, and so on. At the
experience. However, application interview concentrate on the
forms should not require a higher applicants abilities, to see if they
standard of English than is required meet your needs, not on disability
to do the job. A simple application
form is contained in the Appendix to the applicant can be made to
this handbook. feel at ease so dont begin the
interview with a difficult question
An interview is one of the best ways
to judge whether someone is the the interviewers questions call
best person for the job and to for explanations rather than yes
secure his or her agreement to take or no replies, eg Why do you
it. The employer wants to find out if want to leave your present job
the applicant can do the job; the and join us? and What relevant
applicant wants to find out about experience have you had so far?
the company, the job, how much it
pays and other employment terms. applicants are given the chance to
But it is not just the applicant who ask further questions at the end
is being judged a badly prepared of their interviews. They should
interviewer can create an also be told when they should
unfavourable impression of the know the outcome ideally as
company. soon as possible.
Interviews need to be planned. They A short note made immediately

will run more smoothly if: after the interview helps with
the final decision. The Data
the interviewer scans the Protection Act 1998 provides that
completed application form again candidates may request interview
just before the interview notes in certain circumstances.
The Information Commissioner
there are no interruptions has produced the Employment
(including the telephone) they Practices Data Protection Code

Part 1 which explains how It is also worth noting whether
organisations can follow the Data there were candidates who might
Protection Act 1998 in the context be suitable if the first choice is
of recruitment and selection see unavailable. Remember to notify
other useful addresses at the all unsuccessful applicants at each
back of this booklet. This decision stage of the recruitment process. It 2
can be assisted by asking for is a simple courtesy and can also
references. But contact with the help enhance your reputation in the
applicants current employer should community as an employer who
not be made without permission. cares about people.
Some of the information which
can be obtained from references
is straightforward previous job,
length of service and previous
pay but information on suitability
should always be weighed against
the assessment made during
the interview dont be tempted
to rely solely on someone elses
judgement.
Useful reference booklets

The acas advisory booklet Recruitment and induction gives
more detail on good practice in these areas.
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The employment
contract
Key questions
What is an employment contract?
does an employment contract have to be in writing?
What are express and implied terms?
What are employees statutory rights?
how can a contract be altered?
how can a contract be ended?
This section tries to explain in What is an employment

general terms the main legal contract?
issues relating to the employment All employees have a contract of
contract. It is not intended to be employment which forms the basis
a precise statement of law nor is of the employment relationship. In
every legal aspect dealt with. For simple terms, an employee agrees
instance, it does not deal with to work for an employer in return for
the law relating to the hiring of wages. A contract is made when the
independent contractors who will be offer of employment is accepted.
self-employed. When self-employed A number of rights and duties,
people are hired, the resulting enforceable through the courts,
contract is fundamentally different arise as soon as this happens.
from an employment contract
and most of the employee rights However, most rights and duties,
described in this chapter do not particularly statutory ones, apply
apply. only when the employee starts
work; and a number of them require
specific periods of service to have
been worked. For instance, there is
a service qualification of one year for

most unfair dismissal claims to an hours of work
employment tribunal.
holiday entitlement
does an employment entitlement to sick leave, including

contract need to be any entitlement to sick pay
in writing?
Most employment contracts pensions and pension schemes
(except those for apprenticeships)
need not be in writing to be legally the entitlement of employer and 3
valid; a verbal agreement can be employee to notice of termination
sufficient. However, writing down
the terms of the contract can job title or a brief job description
minimise later disagreements.
The Employment Rights Act 1996 where it is not permanent, the
requires employers to provide most period for which the employment
employees, within two calendar is expected to continue or, if it is
months of starting work, with a for a fixed term, the date when it is
written statement of the main terms to end
of the contract. For further guidance
see the publications section of the either the place of work or, if the
Department for Business, employee is required or allowed
Innovation and Skills website at to work in more than one location,
www.bis.gov.uk or Business Link an indication of this and of the
at www.businesslink.gov.uk. employers address
The following details must be details of the existence of any

included in the written statement: relevant collective agreements
which directly affect the terms
the names of the employer and and conditions of the employees
the employee employment including, where
the employer is not a party, the
the date when the employment persons by whom they were made.
(and the period of continuous
employment) began If an employee is normally employed
in the UK but will be required to
remuneration and the intervals at work abroad for the same employer
which it is to be paid for a period of more than one
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month, the statement must also all employment contracts have the
cover: following terms in them, whether
explicitly agreed or implied:
the period for which the
employment abroad is to last to maintain trust and confidence
through cooperation
the currency in which the
employee is to be paid to act in good faith towards
each other
any additional pay or benefits
to take reasonable care to
terms relating to the employees ensure safety and health in the
return to the UK. workplace.
Where there are no particulars to be When no express term exists,

given for one of the items required implied terms can become part of
to be covered in the statement (for the contract:
example, where there is no pension
entitlement), this must be indicated. by the conduct of the parties
The statement must also include by custom and practice if

a note giving certain details reasonable to do so and if
of the employers disciplinary generally applied in the area or
and grievance procedures, and trade in question for some time
stating whether or not a pensions
contracting-out certificate is in force through firms rules rules can
for the employment in question. become part of the contract
particularly if an employee has
been made aware of them and
What are implied terms? given access to them.
The first part of this section has
outlined the formation of contract
terms by explicit agreement, statutory rights
preferably in writing. Terms agreed Over the years, employees have
in this way are called express terms. become entitled to a wide range
However, it is unusual for all the of statutory rights, derived from
terms of an employment contract to parliamentary acts or regulations
be expressly agreed. For example, which affect the employment
the courts have established that relationship. In general, despite any

express term to the contrary, they because the employee asserted
cannot be waived. They include the or sought to assert a statutory
right: right
not to be discriminated against for taking (or proposing to

(including the right not to be take) action on health and
dismissed) on grounds of age, safety grounds as a designated
race, sex, marriage, disability, or recognised health and
sexual orientation or religion or safety representative, or as
belief an employee in particular 3
circumstances
to equal pay with members
of the opposite sex if it can be or taking part (or proposing
shown that they are doing like to take part) in consultation
work or work of equal value on health and safety matters,
or taking part in elections for
not to be unfairly dismissed representatives of employee
(see pp 38-39) most employees safety (representatives elected
can complain to an Employment by groups of employees not
Tribunal within three months of covered by trade union safety
their dismissal, provided they have representatives)
at least one year of continuous
service. No service period is because of pregnancy or
required if the dismissal was: childbirth
for participation in trade union for refusing to do shop or

activities, for membership betting work on Sundays (in
or non-membership of a England and Wales only)
trade union and in respect
of trade union recognition or for being a trustee of an
derecognition occupational pension scheme
and performing, or proposing
for activities as an employee to perform, any of the trustees
representative, or as a candidate functions
for election, for purposes of
statutory consultation over qualifying for working families
redundancies or business tax credit or disabled persons
transfers or European Works tax credit, or seeking to enforce
Councils a right to them
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taking or seeking to take
to paternity leave employed
parental leave or time off for
fathers who have responsibility
dependants
for the upbringing of the child
and who have at least 26 weeks
to an itemised pay statement continuous service with their
employer by the 15th week before
to maternity benefits/rights the baby is due have the right to
all pregnant women have the right two weeks paid paternity leave.
to paid time off for ante-natal care, The father need not be the childs
the right to 52 weeks maternity biological father but must be the
leave (26 weeks ordinary maternity mothers husband or partner. To
leave and 26 weeks additional qualify for Statutory Paternity Pay
maternity leave) and the right not to employees must, on average, have
be dismissed because of weekly earnings which are equal
pregnancy or childbirth. An to or above the lower earnings
employee dismissed during limit for National Insurance.
pregnancy or statutory maternity Fathers of children born on or after
leave is entitled to receive a written 3 April 2011 may also be eligible
statement of the reasons for her to take up to 26 weeks Additional
dismissal without the need to Paternity Leave (APL). For APL to
request it. During the full 52 be taken the childs mother must
weeks maternity leave the have returned to work. For further
employee must continue to information visit Business Link at
receive all her contractual www.businesslink.gov.uk
benefits except renumeration.
For further information visit to adoption leave providing 26
BusinessLink website at weeks paid leave and a further
www.businesslink.gov.uk. 26 weeks unpaid leave when an
employee is newly matched with
Where a statutory health and a child for adoption, subject to
safety regulation prevents a the employee having 26 weeks
woman from doing her normal continuous service with their
work, because of childbirth or employer leading into the week
pregnancy, she must be offered of being notified of the match.
suitable alternative work on Adoption leave is available to one
no less favourable terms and member of the couple only, of
conditions. If none is available, their choice. The other member
she is regarded as suspended of the couple may be entitled
on full pay. to two weeks paid paternity
leave provided that they have

responsibility for the childs to apply for flexible working
upbringing, are the partner or employees who are parents of
spouse of the adopter and have children 16 and under (disabled
26 weeks continuous employment children under 18) and carers of
with their employer leading into the adults have the right to apply to
week of notification of the match their employer to work flexibly.
and average weekly earnings The request can cover hours of
above the lower limit for National work, times of work and place of
Insurance Contributions. They may work and may include requests
also be eligible for up to 26 weeks for flexitime, home working, 3
Additional Paternity Leave if they term-time working, shift working,
receive notification that they are self-rostering, annualised hours
matched with a child for adoption etc. The request must be made
on or after 3 April 2011. in writing and the employer will
For further information visit have a statutory duty to consider
BusinessLink website at the request seriously and to
www.businesslink.gov.uk. refuse it only if there are clear
business grounds for doing so.
to parental leave employees Employees making applications
who have worked for over one for flexible working will have
year with their employer are the right to be accompanied at
entitled to take unpaid time off meeting by a fellow employee. See
work if they have a baby or adopt the work and families section
a child. The right applies to both of the Department for Business,
mother and father and allows Innovation and Skills website at
for up to 13 weeks in total (over www.bis.gov.uk/employment
5 years) for each child. Parents
of disabled children can take to notice of termination of
parental leave until the childs employment most employees
18th birthday. are entitled to receive from their
employers at least one weeks
to time off for dependants notice after one months service,
all employees have the right two weeks after two years and an
to take a reasonable period of additional weeks notice for each
time off work to deal with an complete year of employment up
emergency involving a dependant to 12 weeks for 12 years service
and not to be dismissed or
victimised for doing so. There is not to have unlawful deductions
no statutory right to payment for from pay employers must
any such time off. not deduct from an employees
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pay unless the deduction is health and safety. The Health
required or authorised by statute and Safety at Work Act 1974
or by a relevant provision of the requires you, for example, to have
employees contract; or if the a health and safety policy, to
worker has previously given report certain injuries, diseases
written agreement or consent for and dangerous occurrences, to
the deduction to be made. provide information and training,
Where employment has been and to provide first aid facilities.
terminated, an employee may be Additionally, all employers
able to make a claim for breach are required to carry out risk
of contract to an Employment assessments in their workplace
Tribunal for wages or sums of
money due under the contract. to statutory sick pay (ssP)
The employer may be able paid by the employer (provided
to make a claim against the the employee meets the qualifying
employee where the employee has conditions). However, where an
claimed against the employer organisation has an exceptionally
high level of sickness in any
to pay when laid off whether month, the employer may be
or not an employer is entitled to able to claim reimbursement of a
lay off an employee is determined proportion of SSP paid out
by what has been agreed in the
individual contract of employment. to time off
i) for public duties (civic,
Most employees who can be magistrate, etc)
laid off by their employers are
entitled to a minimum payment a ii) to look for work if declared
guarantee payment, for up to five redundant with at least two
workless days in any period of years service
three months
iii) for trade union activities, duties
to redundancy pay employees and training where a trade union
with at least two years service are is recognised for collective
entitled to redundancy payments, bargaining (see Acas Code of
the size of which depend on the Practice 3. Time off for trade
individuals pay, age and service union duties and activities).
Provisions contained in the
to a safe system of work when Employment Act 2002 now give
you hire someone, you become new rights for Union Learning
statutorily responsible for their Representatives to reasonable

paid time off to carry out their and
duties and to undergo training
ix) for medical suspension if
continued employment would
iv) for duties as an employee
endanger health
representative, or as a candidate
for election, for purposes of
trade union membership
statutory consultation over
employees have the right:
redundancies or business
transfers or European Works
to belong or not to belong to a
3
Councils
trade union
v) for carrying out functions as

to time off to take part in trade
a safety representative (trade

union activities/duties
union or non trade union) or

as a candidate for election as
not to be excluded or expelled
a representative of employees
from a trade union other than for
not in groups covered by trade

a permitted reason
union safety representatives

not to be unjustifiably disciplined
vi) for performing the functions

by a trade union
of a pension fund trustee or

undergoing relevant training
not to be refused employment
or the service of an employment
vii) to study, if employees aged 16

agency because of membership
or 17 have not attained a certain

or non-membership of a trade
standard of education
union
viii) to request time off to train.

From 6 April 2010 employees not to suffer unauthorised or
in businesses with 250 or more excessive deductions from trade
employees have the right to union subscriptions
request time off to train. The

right works in a similar way to the not to have political fund
right to request flexible working. deductions made from trade
It will be extended to cover all union subscriptions where
businesses in April 2011. For they object to this or have a
further information visit the certificate of exemption
BusinessLink website at
www.businesslink.gov.uk
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to protected employment to minimum pay under the
rights National Minimum Wage Act 1998,
employees have the right to be workers are entitled to be paid
transferred automatically, on at least the level of the National
the same terms without loss of Minimum Wage
service-related employment
rights, from one employer to to annual leave and working time
another when the business in limits under the Working Time
which the employee is then Regulations 1998 (as amended),
employed is transferred to a new workers are entitled to 5.6 weeks
employer. Employees have the paid leave per year, to rest periods
right to object to the transfer of and in-work rest breaks and
their contract to the new health assessments in certain
employer but they will normally circumstances. The regulations
lose the right to claim there was also limit the average working
a dismissal. Employees with one week to 48 hours and limit night
years service who are dismissed working to an average of eight
solely or mainly because of the hours in any 24 hour period.
transfer, are regarded as being Special rules apply to young
unfairly dismissed unless a persons.
tribunal is satisfied that it was
necessary for economic, For further information see
technical or organisational the holidays section of the
reasons Department for Business,
Innovation and Skills website at
to written reasons for dismissal www.bis.gov.uk
on request provided they have
at least one years service (no to protection from being required
request or service period required to work on sundays shop
where dismissal is on maternity workers and betting workers
grounds) have the right to opt out of the
requirement to work on Sundays
to a written statement of the
main terms of the contract. The to payment on insolvency of the
Appendix to this handbook employer dismissed employees
contains an example of a written can receive payments for certain
statement debts, within limits, from the
National Insurance Fund on the
formal insolvency of their employer

to be accompanied at of fixed duration have the
disciplinary and grievance same terms and conditions of
hearings workers are entitled employment as comparable
to be accompanied by a fellow permanent employees. Less
worker or a trade union official of favourable treatment must
their choice at certain disciplinary be objectively justified. The
and grievance hearings provided regulations came into force on
that they make a reasonable 1 October 2002
request to be so accompanied. to protection when making

The right applies when the hearing disclosures of wrongdoing to 3
could result in the administration the employer the Public Interest
of a formal disciplinary warning Disclosure Act 1998 protects
or some other punitive action employees who have a reasonable
such as suspension without pay, belief that they are disclosing
demotion or dismissal. The right information relating to criminal
to be accompanied at grievance offences, miscarriages of justice,
hearings applies only where danger to health and safety or the
the grievance relates to the environment or breaches of legal
performance of a legal duty by an obligations to their employer.
employer in relation to a worker
In most cases individuals have the
for part-time workers to be right to make a complaint to an
treated no less favourably than employment tribunal if they consider
comparable full timers the Part- their rights have been infringed.
time Workers (Prevention of Less Acas conciliation officers are
Favourable Treatment) Regulations available in most of these instances
2000 aim to ensure that part-time to help both parties to understand
workers have the same terms the way tribunals work and to
and conditions as comparable full help the parties reach a voluntary
timers. Less favourable treatment solution which would avoid the need
must be objectively justified for a tribunal hearing.
for employees on fixed-term Acas also offers conciliation before

contracts to be treated no less a claim is made to an employment
favourably than comparable tribunal. Pre-Claim Conciliation can
permanent employees the save time, money and stress and
Fixed-term Employees (Prevention promote a quick solution which
of Less Favourable Treatment) suits the employer and employee
Regulations 2002 aim to ensure and helps them avoid a permanent
that employees on contracts breakdown in their relationship.
ThE job
EvaluaTionconTracT
schEmE 3 21
For more information ring the Acas
helpline on 08457 47 47 47 (lines when the employee works in
open 8am-8pm Monday to Friday accordance with the new terms
and 9am-1pm Saturdays). without objecting to the changes
through a term which provides
Employers should follow the for a variation in the contract,
guidance set out in the Acas eg a clause specifically allowing
Code of Practice Disciplinary and an employer to change an
grievance procedures (available at employees duties.
www.acas.org.uk/publications)
when dealing with disputes. It is important that changes are
Employment tribunals are legally discussed and agreed where
required to take the Acas Code possible with the jobholder since
of Practice into account when disagreement over the changes may
considering relevant cases. lead to the ending of the contract
Tribunals will also be able to adjust and employers facing claims for
any compensatory awards made in unfair dismissal and wrongful
these cases by up to 25 per cent for dismissal. Wrongful dismissal occurs
unreasonable failure to comply with where an employee is dismissed
any provision of the Code. and the terms for ending the
contract have not been observed.
For further guidance see the Action for wrongful dismissal can
publications section of the be taken in the courts or, if the
Department for Business, employment has been terminated,
Innovation and Skills website at through an Employment Tribunal.
www.bis.gov.uk or Business Link But there may be occasions when
at www.businesslink.gov.uk. employers feel that changes to
the contract are essential to the
how can a contract operation of the business perhaps
be altered? arising from changes in technology.
Most changes to an employment In some circumstances an
contract require the consent of Employment Tribunal may consider
employer and employee. They can that it was not unreasonable to alter
be agreed: the contract without the employees
consent. However, in view of the
either verbally or in writing potential problems, any decisions
(although written consent can concerning change where there is
avoid later disagreements) no employee agreement require very
through collective bargaining careful consideration and discussion
arrangements (see p51) with those concerned.

how can a contract
be ended?
A contract can be ended by the
employer or employee, normally
by giving the required notice of
termination. But if the employer
fails to give required notice, the
employee can make a claim to the
courts for damages for wrongful 3
dismissal. Alternatively, if the
employment has been terminated,
a claim can be made to an
Employment Tribunal. Where the
employee leaves without giving the
required notice, the employer may
also have, in certain circumstances,
a right to claim damages. There
are exceptions, where no notice is
required where dismissal is for
gross misconduct (see pp32-37) or
where constructive dismissal occurs
(see pp38-39).
further advice
if you are unsure whether
specific areas of the
employment contract are
covered by legislation, or if
you have any employment
contract problems, please
telephone the acas helpline
on 08457 47 47 47 where
acas advisers with specialist
knowledge can provide you
with useful information.
ThE job
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work
Pay
Key questions
how much firms pay?
What is the best pay system?
What is better cash or cashless pay?
Pay is probably the most important But before we look at pay, it may
part of the employer-employee help to bear in mind factors such as:
relationship:
the quality of management and
it is a major part of most firms supervision
costs
the satisfaction employees get
it is a major factor in attracting and from the job
retaining employees
job security
it can affect how employees work
relationships with colleagues
it can lead to conflict between
employer and employee. working conditions
This section looks in general terms social and recreational facilities.

at the decisions a small firm can
take about levels of pay, systems of These can affect, for better or for
pay and methods of pay. worse the way people do their jobs.
Getting pay right needs to be seen
It shows how these can contribute in relation to these other factors.
to a more effective workforce. It also
briefly considers the pros and cons
of these decisions.

What level of pay will retain
how much should employees? Is pay a major
firms pay? reason why employees leave?
How should a firm decide how
Find out at their exit interviews
much to pay its workforce? It needs
(see p43). Has real pay been
to keep in mind the following:
eroded by inflation? Is overtime
being wrongly used, for example
What can it afford? This
as a way of increasing low levels
decision will be influenced by
of basic pay?
factors such as profitability and
the effect of the wage bill on total
What will be acceptable
costs. However, a reputation
differences between or within
for low pay can adversely affect
groups of employees?
recruitment and employee 4
To motivate and avoid
turnover (see pp8-11 and
dissatisfaction, they need to be fair
pp41-44). These hidden costs
and based on the requirements of
may outweigh any savings
the job and the contribution to the
achieved through low pay rates.
business by each employee.
What is total pay? For many
What has been agreed between
employees this is more than their
the company and a trade union
annual salary or weekly wage. It
representing the companys
can include pensions packages,
employees? (see pp48-54).
low-interest loans, travel and
meal subsidies. These benefits
What does the law require?
should be costed so that the
It requires equal pay and
company knows total pay costs
conditions for men and women
and employees understand all the
doing like work, ie the same or
different elements in their pay.
broadly similar work or work of
equal value. From 1 April 1999
What level of pay will attract
the National Minimum Wage sets
enough suitable recruits?
a minimum statutory hourly rate
Look in the jobs section of local
of pay. Under 18s are exempt.
newspapers to get an idea of the
The Agricultural Wages Board
going rate, contact your local
sets minimum rates of pay for
Jobcentre and if the company
farm workers. But in all other
is looking for someone with
circumstances pay depends on
specialist skills, then try the ads
what has been agreed to become
in specialist journals.
part of the individual contract of
employment (pp12-23).
Pay
imPlEmEnTing ThE job EvaluaTion schEmE 3 25
And this type of system does
Payment systems usually require effective supervision
Payment systems can be divided
to make sure of the right level of
into two major types:
performance.
Time-rate payment systems
where pay is directly related to
incentive payment systems
hours worked
The main advantage of incentive
payment systems is that they link
incentive payment systems
pay to performance and therefore
where pay depends upon
can encourage employees to work
employees performance.
harder to increase earnings. The
main disadvantage for a small firm is
Below we look at some of the
that incentives systems will generally
advantages and disadvantages of
be more complicated
these payment systems for small
to administer than time-related
firms.
systems and probably more
expensive to operate. Most
incentive schemes will need to
Time rated payment systems record individual performance. And
Time rated systems provide
they need effective quality control,
employees with a set rate per hour,
otherwise employees may sacrifice
week or month usually expressed
quality to produce more and thereby
as an hourly rate, weekly wage, or
earn more.
annual salary. The rate need not be
the same for all working time. Higher
Firms may find that a single
rates may be paid when overtime
incentive system will not be
is worked or when shift-working is
suitable for the whole workforce.
undertaken. But in each case pay is
For instance, it may be that white
related to the length of time worked.
collar workers are best served by
a merit rating scheme under which
Time rated systems are simple to
employees receive bonuses linked
operate and it is probably why the
to an objective assessment of their
majority of employees in small firms
performance; production workers
are paid on this basis. Employers
may be better suited to a payment
tend to find it easier and usually
by results scheme operatives
cheaper to administer. But it is
being paid according to the amount
sometimes suggested that its
they produce so that their pay
weakness is that there is no direct
increases (or decreases) with their
link between pay and performance.
production.

Share incentive schemes involve the If employees are paid by cheque,
provision of shares to employees arrangements can be made:
either by giving them direct or
allowing them to be bought. The aim for employees to cash their
is to encourage staff involvement cheques at a local branch; or
in the companys performance and
therefore improve motivation and for the company to pay directly
commitment. This may be suitable into employees accounts.
to small firms because employees
can more easily see how their Arrangements can also be made
efforts contribute to the business. so that wages are paid directly into
employees bank accounts by credit
Companies can award some or all transfer. 4
of their free shares on the basis
of performance so long as they Cashless pay does not have the
satisfy certain criteria laid down by security problems associated
HM Revenue and Customs (for with cash and it can reduce wage
more information visit administration costs (especially if
www.hmrc.gov.uk/shareschemes payment is made on a monthly basis
or telephone 020 7147 2843). rather than weekly).
method of pay cash or What are the problems?

cashless pay? Problems can, however, arise with
The decision whether or not cashless pay. Employees may lack
to introduce cashless pay can experience of banking facilities and
involve much more than just cost may need some help in obtaining
considerations. This section looks at and using banking services. It may
the implications of cash or cashless prove difficult for employees to get
pay for small firms. to a bank, especially if they work
some distance from one. They may
Employees who are paid in cash do object to bank charges and some
not need bank accounts. But cash employees may simply want their
handling can take up substantial cash in hand and not in bank.
staff time (for instance making up,
checking and issuing pay packets) Employers need to be aware that
and also pose security problems. where employees have a contractual
right to payment in cash, a change
to cashless pay without consent
may be a breach of contract.
Pay
how can problems be
overcome?
Branch managers of High Street
This section has looked
Banks can offer assistance to
companies and their employees, for
at pay issues simply and
instance on overdraft loan facilities briefly. if further advice is
and banking charges. The spread required on any of the topics
of bank cash points and Saturday dealt with in this section,
opening are making banking please telephone the acas
services more accessible. helpline on 08457 47 47 47.
Firms which are some distance

from the nearest bank can also
overcome resistance to cashless
pay. Employees can be given slightly
longer lunch breaks on pay day so
that they can get to the bank.
Finally the change is more likely

to succeed if employees can see
that there are benefits for them as
well as their employer in moving to
cashless pay.

work
Training
Key questions
can the firm do its own training?
is there any outside help?
What training is available?
how can new recruits be fitted in quickly and easily?
What will new recruits need to know?
Training can make employees An important early decision about

and employers more effective by training for a small firm is what
improving performance. Where can be done by the firm itself and
training extends their range of skills, what assistance will be required
it can make them more adaptable from outside training organisations.
to the rapid changes in technology Advice on training is available from:
and can lead to improvements in the
quality of jobs and commitment to employers and trade associations
the firm. It is particularly important
in small firms for employees to local chambers of commerce
become fully effective as quickly
as possible. There is less scope industry training organisations
to carry learners, whether new to
the company or just new to the job. Learning and Skills Councils in
And well-trained employees allow England; National Council for
the employer to delegate more, so Education and Training in Wales;
that more attention can be given to Local Enterprise Companies
those parts of the job that cannot be (LECs) in Scotland.
delegated.
Training
In addition, the Government
induction training for
supports a range of measures
new recruits
designed to help adults, young
The purpose of induction training
people and the business
is to help new recruits fit into the
community.
organisation quickly and easily.
Good induction training benefits the
Each LSC/Wales Council/LEC offers
company: it helps turn new recruits
a range of training opportunities
quickly into effective employees and
designed to meet the needs of the
can reduce employee turnover (see
local labour market, and can provide
pp41-44). Advice and assistance
information, advice and access to
on induction can be obtained from
services that help owner-managed
outside organisations but the firm
companies and management teams
should retain the main responsibility
with the continuous development
for carrying out induction training.
of the skills and potential of their
The Acas Advisory booklet
workforce.
Recruitment and induction gives
more detail on the induction process
More information about
and contains a checklist of the
programmes and training availability
topics that may need to be covered.
can be obtained by contacting,
in England, the LSC helpline on
It will help new recruits if the
0870 9006800 www.lsc.gov.uk;
company is aware that:
in Wales, National Assembly for
Wales on 0845 010 5500 at
first impressions count so
www.assemblywales.org; and in
make new recruits feel welcome
Scotland the Scottish Further
and make sure arrangements
Education Unit on 01786 892000
have been made for their arrival.
www.sfeu.ac.uk.
In particular, be prepared to make
allowances for people returning
Business support in England is
to work after a long period away,
available through Business Links,
for those entering employment
which are partnerships of local
for the first time, for people with
organisations including Chambers
disabilities and for ethnic groups.
of Commerce, local authorities,
enterprise agencies and others. For
more information call the Business
Link advice line on 0845 600 9006
or visit the website at
www.businesslink.gov.uk.

new recruits will want to know a Who will be in charge? The
great deal about the firm new recruits immediate boss
information mentioned at the should always be involved in the
interview (see pp8-11) may need to induction process.
be repeated, such as:
What are the company rules?
What is the job and how In particular, new recruits need
does it fit into the rest of the to know the rules on safety and
organisation? New recruits whether there are any special
should be introduced to other hazards.
employees where appropriate.
Where are the cloakrooms,
What are the terms and toilets, rest-room, first aid
conditions of employment and in facilities, etc?
particular how, when and where
do employees get paid?
5
Acas training
acas training can help. We run getting it right training sessions
on induction as well as on the general aspects of employing
people such as contracts of employment, holiday entitlement,
probationary periods plus many other topics covering the
employment relationship from recruitment through to redundancy
handling.
Training
work
rules and procedures
key points
Key questions
Why have rules?
should rules be written down?
What should rules cover?
how should the breaking of company rules be dealt with?
how do employees voice their grievances?
Good company rules benefit complaints to employment tribunals

employers and employees. They involve employers who have no
make clear what conduct the procedures in place to deal with
employer considers is acceptable disciplinary issues or workplace
and what is unacceptable. They also grievances.
make sure that employees conduct
and job performance meet certain Employers should follow the
minimum standards. From the guidance set out in the Acas
employee point of view they ensure Code of Practice Disciplinary and
consistency which benefits employer grievance procedures (available at
and employee. And they clearly www.acas.org.uk/publications)
indicate what action the company when dealing with disputes.
will take if company rules are broken. Employment tribunals are legally
required to take the Acas Code
The current law relating to of Practice into account when
dismissals enables eligible considering relevant cases.
employees, who believe that they Tribunals will also be able to adjust
have been unfairly dismissed, any compensatory awards made in
to challenge both the reason for these cases by up to 25 per cent for
the dismissal and the manner in unreasonable failure to comply with
which the dismissal was handled, any provision of the Code.
at an employment tribunal. Many

The rules should particularly identify absence
two types of unacceptable conduct: Whom should employees notify if
they are absent from work?
misconduct conduct which
initially requires disciplinary action When should notification
other than dismissal (although if take place?
further misconduct takes place,

it may lead to dismissal). This When is a medical self-
can include persistent lateness, certificate sufficient?
unauthorised absence and failure

to meet known work standards When will a doctors certificate
be necessary?
gross misconduct
conduct which may lead to health and safety
dismissal without notice Are employees aware of the
summary dismissal. This can importance of health and
include working dangerously, safety rules?
stealing or fighting. But much will
depend on the circumstances Is alcohol prohibited?
of each offence and whether
6
summary dismissal would be standard of work performance
reasonable in such circumstances Have agreed performance
(see pp38-39). standards been established?
It is difficult to list all instances of Are employees aware of
misconduct and gross misconduct. required standards?
But companies should give their

employees enough examples to Does performance measure up
make sure they understand what is to agreed standards?
meant by each of them.

Are standards reasonable?
Is adequate training provided?
What should rules cover? Are exceptions made in special
The following are examples of circumstances?
subjects on which companies may

want rules and the sort of issues clothes
that rules should deal with: Will employees need
special clothes?
rulEs and
imPlEmEnTing ThEProcEdurEs: kEy
job EvaluaTion PoinTs
schEmE 3 33
Will they be provided by
grievance procedures and gives
the employer?
valuable advice on how to deal with
disciplinary matters.
Who will be responsible
for cleaning?
The aim of disciplinary action should
be to improve future conduct. No
marriage, change of address company should take such action
Who should be informed of
lightly, however, since it can have
such changes in personal
serious results for both employer
circumstances?
and employee. It is essential that the
employers approach should always
use of company facilities be the same in similar cases. If not,
Are private telephone calls or employees may feel unfairly treated.
private use of company computer
facilities (eg internet/email)
mediation
permitted?
An independent third party or
mediator can sometimes help
Are employees allowed to be on
resolve disciplinary or grievance
company premises outside work
issues. Mediation is a voluntary
hours?
process where the mediator
helps two or more people in
timekeeping
dispute to attempt to reach an
Are employees required to
agreement. Any agreement

clock in?
comes from those in dispute,

not from the mediator.
holidays
Do employees have to take holiday
Mediators may be employees

at specific times
trained and accredited by an

eg summer shutdown?
external mediation service who

act as internal mediators in
addition to their day jobs. Or
they may be from an external
breaking company rules mediation provider. For more
If after checking the facts
information about mediation
thoroughly, employers genuinely
see the Acas website at
believe that employees have broken
www.acas.org.uk and the
the rules, they will usually need
Acas/CIPD guide Mediation: An
to take some form of disciplinary
employers guide which can be
action. Discipline and grievances at
downloaded from the website.
work: the Acas Guide follows the
Code of Practice Disciplinary and

Initially it is often better to try to provide for employees to be
solve the problem informally. Small notified and allow them to put their
firms are generally well-placed to do case before decisions are reached
this. Can the problem be dealt with
by the employees immediate boss set out clearly so that employees
or by the employer talking to the understand the penalties which
employee about it? But it should not can result from unacceptable
simply be a friendly warning the conduct and failure to change it.
discussion should be two-way.
A procedure should also:
Try to find out if the problem (for
example, persistent absence ensure that disciplinary action
or lateness or unsatisfactory is not taken until the case has
performance) really is a disciplinary been fully investigated. If it is
matter. If the underlying problem is thought necessary to suspend an
a financial, domestic or health one, employee during the investigating
the firm may be able to help the period, it should be with pay and
employee overcome it and achieve for as short a period as possible
the required change. However, if
these problems do not explain the give employees the right to be
6
employees poor performance, it accompanied by a colleague or
will be necessary to make clear the trade union official of their choice
likely consequences of failure to (see pp 48-54)
improve or change.
make sure employees are aware
If a discussion does not solve the that the employer is dissatisfied
problem, the more formal approach with their conduct before
of a disciplinary procedure may be disciplinary action is taken and
called for. Details of the procedure that no employee is dismissed for
should be in writing, readily a first breach of discipline except
accessible, known and understood for gross misconduct
by all employees. The procedure
should be: require that disciplinary action
be implemented as soon as
fair reasonably possible
stress the need to improve and provide the employee with a right
not overstate the punishment of appeal. In a small firm the
grievance procedure may be the
best way to hear appeals.
rulEs and
imPlEmEnTing ThE ProcEdurEs kEy
schEmE 3 35
A disciplinary procedure will required to take the Acas Code
normally operate as follows: of Practice into account when
considering relevant cases.
first formal warning: Tribunals will also be able to adjust
unsatisfactory performance any compensatory awards made in
an employer should issue an these cases by up to 25 per cent for
improvement plan setting out unreasonable failure to comply with
the nature of the problem; the any provision of the Code.
improvement required; and the
timescale for improvement
first formal warning: misconduct making known employee

a first written warning grievances
Just as employers sometimes feel
final written warning for further they must take action against an
poor performance or misconduct employee, individual employees
as relevant. The warning should may sometimes feel that there is a
make clear that dismissal may need to complain about employers
follow failure to improve actions as they affect them.
dismissal with appropriate A grievance procedure should

notice will follow if there is provide an open and fair way
insufficient improvement. for employees to make known
their complaints, to have these
Employees should be made aware complaints considered by the
that the employer will record all company and for the company to
written warnings. Employee conduct decide whether to accept or reject
or performance should then be the complaint.
reviewed at a specified later stage
with a view to wiping the slate A grievance procedure in a small
clean if employees behaviour is firm should:
satisfactory.
be in writing
Employers should follow the
guidance set out in the Acas be known and understood by
Code of Practice Disciplinary and all employees
grievance procedures (available at
www.acas.org.uk/publications). allow the employee to be
Employment tribunals are legally accompanied by a colleague

or trade union official in the
procedure if he or she wishes.
ensure a speedy resolution to the

problem the circumstances of
each organisation will affect the
length of time taken. But first most
firms ought to be able to complete
both stages within seven to ten
working days.
Employers should follow the

guidance set out in the Acas
Code of Practice Disciplinary and
grievance procedures (available at
www.acas.org.uk/publications).
Employment tribunals are legally
required to take the Acas Code
of Practice into account when
considering relevant cases.
6
Tribunals will also be able to adjust
any compensatory awards made in
these cases by up to 25 per cent for
unreasonable failure to comply with
any provision of the Code.
The type of issues that may be

raised as grievances include:
Pay issues such as bonus

calculations or overtime
entitlement
holidays complaints concerning

allocation of holiday period
discretionary benefits such as

paid time-off for medical visits and
unpaid leave-of-absence.
rulEs and
imPlEmEnTing ThE ProcEdurEs kEy
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work
unfair dismissal
Key questions
What is a dismissal?
What is constructive dismissal?
What is a fair dismissal?
What points should be considered before a decision
to dismiss is taken?
This section provides a basic It is our intention in this section to

introduction to the area of unfair look at the major issues facing small
dismissals. It is based on the firms when considering the
knowledge and experience of Acas dismissal of employees.
staff gained as specialists in the
areas of employee relations and
personnel management, not as legal What is a dismissal?
experts. In certain circumstances An employee is dismissed when the
it may therefore be desirable to employer terminates an employees
consult a lawyer. More detailed contract. In addition the expiry of a
guidance can be found in the Acas fixed-term contract is a dismissal
advisory handbook Discipline and (however, the rules concerning
grievances at work. fixed-term contracts are complex
and advice should be sought). A
The previous section dealt with resignation is normally considered to
action designed to minimise the be termination by the employee and
need for dismissal. It needs to be therefore usually when an employee
stressed that dismissal should be resigns no dismissal has taken
the final step to be taken after all place. But in certain circumstances
other options have been considered. an employee may resign because
However, in certain circumstances it the employer has broken a
will be unavoidable. significant term of the contract.

This is known as constructive the dismissal is fair, taking all
dismissal. relevant factors known at the time
into consideration
There is no law which prevents an
employer from dismissing an the dismissal is not automatically
unfair for example it is not
employee. But employees may have
related to pregnancy or childbirth
the right to apply to an employment (for a comprehensive list of
tribunal claiming that they were automatically unfair dismissals see
unfairly dismissed (see pp14-15). the Department for Business,
A decision by a tribunal in the Innovation and Skills leaflet
employees favour could result in an Dismissal: fair and unfair a guide
award against the employer of for employers URN 07/829/A1
substantial compensation. at www.bis.gov.uk)
Employers who have not asked

What is a fair dismissal? themselves these questions will risk
A dismissal will normally be fair an unfair dismissal. But by following
provided the employer had sufficient this handbooks advice on
reason for the dismissal and acted disciplinary rules which is based on
reasonably in so doing. Among the the Acas Code of Practice
commonest reasons for dismissal Disciplinary and grievance
are misconduct, inability to do the procedures (see Rules and
job and redundancy. But it is not procedures key points), the risk can
possible to specify exactly what is be reduced. The law does not 7
meant by reasonable. It will depend expect a small firm to act in the
to a great extent on all the same way as a large one a greater
circumstances surrounding the element of informality in relations
dismissal. However, any employer between employers and employees
contemplating dismissing an is to be expected. Nevertheless it
employee should ask whether: does expect a small firm to act
reasonably in the circumstances,
there is sufficient reason having regard to its size and
for dismissal administrative resources. Tribunals
can adjust any compensatory
reasonable alternatives to awards by up to 25 per cent for
dismissal were considered unreasonable failure to comply with
any provision of the Code of
the dismissal is consistent with Practice.
previous action by the employer
and any disciplinary procedure
unfair dismissal
Did you know?
From 6 April 2009 a new simplified system of dealing with workplace
problems, particularly discipline and grievance issues, was introduced.
Acas played a crucial role in the amendments, drafting a new Acas Code
of Practice on disciplinary and grievance procedures which provides
guidelines employers and employees should follow when addressing
workplace disputes. The Acas Code is designed to encourage
employers and employees to resolve workplace problems early on, to
prevent costly and stressful employment tribunals.
If you didnt know about this change or other changes in employment

legislation, go to www.acas.org.uk where you can look at the latest
developments in employment relations, check whether your procedures
or policies are up-to-date, book onto Acas training or order a publication.
If you want to get regular information from Acas, subscribe to our free
newsletter at www.acasnewsletter.org.uk.
Further information
See the publications section of the Department for Business,
Innovation and Skills website at www.bis.gov.uk and the Business
Link website at www.businesslink.gov.uk.

work
controlling labour costs

absence and employee turnover
Key questions
What are the costs of high levels of absence and
employee turnover?
how can absence and employee turnover problems
be identified?
What factors contribute to high levels of absence and
employee turnover?
how can absence and employee turnover be reduced?
absence The major concern for most small

Employees can be away from work firms is how to control levels of
for a number of reasons including: sickness absence and unauthorised
absence. Although absence
sickness levels can be reduced by better
procedures, they cannot be wholly
8
other authorised absence eliminated and it is not easy to
say what is an acceptable level
unauthorised absence of absence. It will be affected by
(including lateness). factors such as the industry or the
type of job.
Most types of authorised absence
(eg holidays, external training, If employees cannot strike a
maternity and parental leave or comfortable balance between their
civic duties) are not dealt within this work and home responsibilities they
section because they form part of a are likely to suffer not only in their
predictable absence pattern which ability to do the job but also in their
can usually be accommodated in general health and wellbeing. Stress
line with the needs of employers levels increase, morale drops and
and employees. sickness and absenteeism escalate.
conTrolling labour cosTs: absEncE

imPlEmEnTing ThEand
jobEmPloyEE
EvaluaTionTurnovEr
schEmE 3 41
Additionally, employees may feel health and safety standards is
that they have no option but to use the level of absence connected
sickness leave to deal with caring with job hazards?
responsibilities at home.
initial training of new recruits
Parents of children 16 and under are they apathetic towards the
(disabled children under 18) and company? (see pp 29-31).
carers of adults have the right to
request a flexible working pattern welfare arrangements could
and employers will have a legal duty the company assist with
to consider such requests seriously personal problems?
and to refuse them only if there are
clear business reasons for doing so. company rules uncertainty
can lead to misunderstandings
High absence levels can increase when is a medical self-certificate
costs through overtime payments sufficient? When will a doctors
to provide cover and business certificate be necessary? Whom
commitments can suffer. Hidden should absent employees inform?
costs such as low morale may When will the company require a
further reduce productivity. medical examination of the absent
Measures that reduce or eliminate employee? This is particularly
unjustified absence are therefore important when deciding on
important for any firm. action concerning long-term sick
employees (see pp32-37).
What affects absence Statement of fitness for work

levels? On 6 April 2010 the government
There are many factors which may
introduced a statement of fitness for
have an impact on the level of
work As well as allowing doctors to
absence including:
advise that an employee is unfit for
work, the statement also offers a new
working conditions
option may be fit for work. A GP is
could working relationships,
now able to suggest ways of helping
the physical environment
an employee get back to work. This
or the layout of premises
might include an employer talking
be improved?
to an employee about a phased
return to work or amended duties.
management/supervision does
For further information visit the
the company know the size of
Department for Work and Pensions
the problem? What is it doing to
website at www.dwp.gov.uk.
reduce absence levels?

The Equality Act 2010 makes it
What is the size of the unlawful for an employer to treat
problem? a disabled person less favourably
The first step towards control of
because of a reason relating to
absence is to be in a position to
their disability, without a justifiable
estimate the problem. This can be
reason. Employers are required
easily achieved if attendance details
to make reasonable adjustments
are kept in employees personnel
to working conditions or the
records (see pp6-7). They need not
workplace where that would help to
be elaborate but should include:
accommodate a particular disabled
person.
the dates of the beginning and
end of each period of absence
The personnel record form in the
Appendix contains a table for
the reasons for absence and
recording absence.
whether absence was authorised
ie backed by a medical self-
Care should be taken to distinguish
certificate, a doctors certificate
between absence records, which
or subsequently agreed by
record the incidence of absence
the company. In small firms it
but do not include details of the
is relatively simple to tell if the
illness and sickness records,
problem is spread throughout
which include details of the illness.
the workforce or confined to
Sickness records are classified as
particular work sections or to a
sensitive personnel data under the
few employees. By keeping an
Data Protection Act 1998 requiring
eye on individual absence levels,
the consent of the employee.
it may be possible to identify a
The Employment Practices Data
potential problem such as regular 8
Protection Code on Employment
uncertificated absence or a regular
Records, produced by the
pattern of absence. If the company
Information Commissioner, contains
makes sure that the reason for
detailed advice (see p76).
absence is always discussed
with the person concerned, this
may prevent a problem from
developing. If absence problems
Employee turnover
Most small firms have some
involve a disabled employee or
turnover of staff and a certain level
if the health problem is affecting
of employee turnover can benefit
working capacity and cannot be
the organisation by introducing new
resolved, contact the local Job
blood. But excessive employee
Centre and seek help from the
turnover can cause serious
Disability Service Team.
imPlEmEnTing
conTrolling labour cosTs: ThEand
absEncE jobEmPloyEE
EvaluaTionTurnovEr
schEmE 3 43
problems the effectiveness of the examination of these records shows
workforce can suffer, recruitment that there seems to be a problem,
and training costs can increase and then the firm should try to find out
morale may be reduced. Employee why people leave.
turnover can be affected by a
number of factors, including those An exit interview can provide useful
relating to absence. pointers that may help the firm to
recruit more suitable employees
It may involve employees with health and identify problem areas within
problems or disabilities for whom the organisation. Leavers should
the job has become too difficult and be asked why they are leaving and
those with caring responsibilities what they think is good and bad
who cannot maintain a comfortable about the firm for example:
balance between their priorities
at work and home and choose to the job itself
terminate their employment.
hours and patterns of work
What is an acceptable level of
employee turnover will depend to a supervision and management
great extent on the circumstances of
each organisation. However, a small pay and other terms and
firm is more likely to feel the effects conditions of employment
of employee turnover since a few
employees will be a substantial part training and career prospects with
of its workforce. Even when small the company
numbers of employees leave, this
can have a considerable impact on working conditions and amenities.
the effectiveness of the firm. It will
therefore benefit any small firm to But it should be kept in mind that
look closely at the factors that may employees may not always disclose
affect levels of employee turnover. the real reasons for leaving or their
true views about the company.
What can be done?

It is important first to be able to
further advice
estimate the extent of employee The acas advisory booklet
turnover and any particular problem Managing attendance and
areas. As with absence, this can employee turnover gives more
best be done by keeping simple up
detail on these topics.
to-date personnel records. If regular

work
Workplace communications
Key questions
Why are communications important?
What do employees need to know?
how can employees be kept informed?
Most employees need to be provide the organisation with

instructed about their jobs. But informed opinions based on its
keeping employees informed about employees experience
other more general matters at
work is just as essential and can improve commitment and morale
contribute to the efficiency of any in the firm.
organisation by:
increasing their understanding of What do employees need

the employers actions to know?
Employees need to know:
reducing opportunities for
misunderstandings between how their jobs fit into the rest of
employers and employees the organisation
improving trust between about the firm its products 9

employers and employees. and services, its objectives,
overall performance, managerial
Information should flow both ways responsibilities and general
employers should listen to and information about the workplace
take account of employees views
before action is taken. Consulting terms and conditions of
employees not only shows employment (see pp12-23)
employees that their views are
important but can also:
WorkPlacE
imPlEmEnTing communicaTions
ThE job EvaluaTion schEmE 3 45
company rules and procedures overlooked for instance, mobile
(see pp32-37) employees or shift workers can
easily be forgotten. Problems can
company prospects both good arise when employees think that
and bad information is deliberately being
withheld from them.
individual performance standards
they are expected to achieve, how Contact at an individual level may
they are doing (see pp32-37). not always be appropriate or
possible. There may be occasions
A European directive gives when it is essential that meetings
employees in the UK rights to of either the whole workforce or
information and consultation. The groups within it are necessary
directive gives employees the because employees need to be
right to be informed about the informed simultaneously. This can
businesses economic situation also save management time.
and to be informed and consulted
about employment prospects Some information can best be
and about decisions which may passed on to employees in writing,
lead to substantial changes in particularly where it is likely to
work organisation or contractual remain unchanged for a long time
relations, including redundancies or where a detailed explanation is
and transfers. The directive applies required. Three methods which may
to businesses with 50 or more suit small firms are:
employees. The directive does not
apply to businesses with fewer than a company or employee
50 employees. handbook a simple reference
document can be issued to each
employee containing information
about the organisation. It may
how can employees be include details of, for example,
kept informed? amenities, terms and conditions
The day-to-day contacts that of employment and company
take place in small firms between rules. A handbook does not
employer and employees, can need to be printed or expensively
be used to pass on information. produced. In some cases it may
But care should be taken require no more than stapling
to communicate clearly and together various pieces of existing
consistently. Nobody should be information

noticeboards if well-situated
and kept up to date, they can
quickly and easily provide
a workforce with access to
information
Pay packet/notification putting

information either in the pay
packet or with pay notification can
be a simple way of ensuring it is
received.
WorkPlacE
imPlEmEnTing communicaTions
ThE job EvaluaTion schEmE 3 47
work
Employee representation
Key questions
Why have employee representation?
What forms can it take?
What is the difference between recognition and
representation rights?
What is collective bargaining?
What are the subjects of negotiations?
What if employers and trade unions disagree?
is training important?
This section raises some questions Why have employee

that an employer and workforce representation?
should consider about the The major reason why most firms
representation of employees. It agree to employee representation is
does not deal with every aspect because it is wanted by a
however. Employers, employees substantial part of the workforce.
and their trade unions may find that Some employers, particularly in
a problem or disagreement arises small firms, may take the view that
that is not dealt with in this section. employee representation will
If so, their nearest Acas office can interfere with the direct relationship
provide assistance on all aspects of between the employer and individual
employee representation. employee. Indeed, the importance
of good communications between
employer and employee cannot be
overestimated (see pp45-47); this
will often be enhanced by an
effective system of employee
representation.

Employee representation can benefit must consult those safety
the firm as a whole by providing a representatives on health and
regular and systematic channel safety matters affecting the
through which the representative group or groups of employees
views of employees are made they represent. Employees not
known to the employer and the in groups covered by trade
employers views made known to union safety representatives
the workforce. must be consulted on matters
affecting their health and safety,
Employers are legally required to either directly or through elected
consult with representatives of representatives. If the employer
employees on certain issues, which decides to consult through elected
include: representatives the employees
will have to elect one or more
redundancies and business employees to represent them.
transfers Where 20 or more

redundancies are proposed at A European directive gives
one establishment over 90 days or employees in the UK rights to
less, or where there is a transfer information and consultation. The
of a business, employers are directive gives employees the
required to consult representatives right to be informed about the
of any recognised trade union, or businesses economic situation
if no trade union is recognised, and to be informed and consulted
another elected representative about employment prospects
of affected employees. Such and about decisions which may
employee representatives lead to substantial changes in
may be elected solely for the work organisation or contractual
purpose of consultation about relations, including redundancies
specific redundancies, or, if and transfers. The directive applies
appropriate, they could be elected to businesses with 50 or more
representatives from an existing employees. The directive does not
consultative body apply to businesses with fewer than
50 employees.
health and safety Where
an employer recognises an 10
independent trade union and What forms can employee
the trade union has appointed, representation take?
or is about to appoint safety Representation can take a variety of
representatives, the employer forms. Employers may encourage
EmPloyEE
imPlEmEnTing ThE rEPrEsEnTaTion
job EvaluaTion schEmE 3 49
arrangements which provide a especially likely when employees
forum for a regular exchange of seek to negotiate collectively their
views. For example, a works or terms and conditions.
office committee may serve this
purpose. These committees will
comprise employees chosen to be Trade unions
representatives of the workforce Trade unions aim to improve the pay
as well as the employer and/or and other employment conditions
the employers representatives. of their members, primarily by
They discuss such matters as representing them in collective
working conditions, employment bargaining with employers. Where
and production changes, safety groups of employees have joined
and welfare matters. To work trade unions, they may seek
effectively, such committees should recognition from their employer.
meet regularly rather than on an
occasional basis. If disillusionment
is to be avoided, such committees recognition
should be seen to have a real effect The Employment Relations Act 1999
on how matters are determined. introduced provisions for statutory
This requires that the workforce trade union recognition in certain
be regularly informed about the circumstances.
committees work.
When a company receives a request
Sometimes a staff association may for recognition ie a request to
be formed to provide a basis for negotiate it should find out the
employee representation. Typically answers to the following:
such associations are based on
the company or establishment and, is the union appropriate?
initially anyway, have few if any links Does it normally recruit in the
with outside organisations. This industry and for the particular type
is sometimes seen as one of their of employees covered or is there
attractions both to employees and another union which is already
employers. But it can also limit their recognised for similar employees?
effectiveness, long-term stability and
independence, which often depend are there sufficient employees
on the energy and drive of one or who support the unions claim
two individuals. Accordingly staff for recognition? Support may
associations may eventually merge be wider than the number of union
with a larger trade union. This is members. It should be kept in

mind that the employers stated
What is collective
attitude towards trade unions
bargaining?
can affect support hostility
Collective bargaining arrangements
can create a conflict of loyalty
are jointly agreed rules and
for employees between their
procedures between employers
company and trade union.
and trade unions which provide
a method of determining
Taking these factors into account, it
employees terms and conditions
is then up to the employer to decide
of employment. They define the
whether to agree to recognition of
way that agreement should be
the trade union.
reached and the subjects to be
dealt with. There are a number
However, if voluntary approaches
of legal provisions which relate
are unsuccessful and the employer
to the activities of trade unions.
has at least 21 workers, the trade
See the Trade Union and Labour
union may make an application to
Relations (Consolidation) Act 1992,
the Central Arbitration Committee
as amended by the Trade Union
(CAC) for recognition.
Reform and Employment Rights Act
of 1993.
representation rights Collective bargaining agreements
Sometimes employers do not think
do not normally establish legal
there is enough strength of feeling
relations between an employer
for trade unions within the workforce
and trade union. But those parts
to justify full recognition. Instead
of the agreement that affect terms
they may agree to representation
and conditions of employment
rights which do not provide for full
can become part of the individual
negotiations with the employer but
employment contract (see pp12-23).
entitle members to be represented
The employer and employee can
by their union individually, eg in
expressly agree that employment
disciplinary cases or if the employee
should be on terms agreed by
has a grievance (see pp32-37).
the employer and trade union and
subject to any changes they may
If subsequently the union can show
agree. 10
sufficient membership growth, full
recognition can then follow.
Collective bargaining takes place
in firms of all sizes. The strong
Such an arrangement does not
personal relationships which can
prevent a trade union seeking
be a useful feature of small firms
statutory recognition.
EmPloyEE
are not incompatible with collective reaching agreement
bargaining. On the contrary, sound
Employers and trade unions
employer-employee relationships
should agree a simple written
contribute to a healthy employer-
negotiating procedure. This will
trade union relationship.
clarify arrangements and can avoid
later misunderstandings. In a small
firm a simple procedure of no more
What statutory rights than three stages is probably all
arise when unions are that is necessary in most cases. An
recognised? example of a negotiating procedure
A number of statutory rights arise
is contained in the Appendix.
when a trade union is recognised,
including:
making collective
the right to receive some
bargaining
information from the employer for
arrangements clear
collective bargaining purposes
Employers and trade unions need to
agree a number of arrangements so
the right to time off for trade union
collective bargaining can operate
duties, training and activities
effectively on a day-to-day basis.
the right to be consulted before
These include:
employees are made redundant
how and when negotiating
the right to be consulted and
meetings can be arranged
informed about any transfer of
the business (see note 38) and,
who will be involved in the
in certain circumstances, the
negotiations the employer and
right to be recognised by the new
trade union representatives. It
employer
is important to indicate whether
full-time trade union officials
the right to appoint a safety
will be involved or whether lay
representative.
representatives (eg shop stewards)
will do the negotiating
Provisions contained in the
Employment Act 2002 give Union
what facilities will be available
Learning Representatives the right
for union representatives eg
to reasonable paid time off to carry
telephone, noticeboard, stationery
out their duties and to undergo
training.

how much time will be made
resolving outstanding
available to trade union
differences
representatives and members for
Most negotiations are settled by the
union duties, meetings and other
parties themselves within their joint
trade union activities
procedure. In small firms particularly,
a committed and participative
how agreements (and
management approach can help
disagreements) should be made
employees develop a realistic
known to the workforce.
understanding of the possibilities
and limitations of negotiations.
The subjects of However, there may be occasions
negotiations when agreement cannot be
The subjects of negotiations will
reached during negotiations. In
depend upon what is agreed by the
these circumstances, either or
parties. Both parties should be in no
both parties may want to use the
doubt about what matters are to be
independent conciliation service of
the subject of joint agreement. They
Acas. If requested to do so, Acas will
may typically include:
attempt to help both sides to reach a
mutually acceptable agreement.
pay and payment systems
If agreement still cannot be reached
hours of work
through negotiation or conciliation,
then at the joint request of the
holiday
parties, Acas may appoint an
independent arbitrator provided
sick pay
both sides agree to be bound by the
arbitrators decision.
pensions
premium payments (eg bonus,

overtime, shift)
security of employment.
10
Employment relations training
EmPloyEE
A good understanding of the factors
affecting employment relations is
important for successful employer/
trade union relations. Most trade
unions have training facilities for
their representatives and there are
a number of independent training
organisations that can provide
employment relations training
separately for management or jointly
with trade union representatives.

appendix
11
aPPEndiX
55
appendix
Examples and forms
negotiating procedure: an example

general principles
The purpose of this agreement is to introduce a procedure to establish
a sound and effective relationship between the company and the trade
union. The union accepts that it is the companys responsibility to operate
as efficiently as possible and the employer accepts that it is the unions
responsibility to protect and further the interests of its members. The
company and the trade union will make every effort to resolve all differences
through negotiation and will refrain from all forms of industrial action until this
procedure has been completed.
The negotiating procedure will have three stages.

stage 1
A shop steward may raise an issue with the works manager. The works
manager will meet the shop steward to discuss the matter. Stage 2 will
be entered if there has been no agreement within two weeks of the shop
steward first raising the issue.
stage 2
The managing director will meet with the shop steward and full time union
officer to discuss the issue. If there is no agreement within six weeks
of the shop steward first raising the issue, then the third stage may
be entered.
stage 3 Third party assistance
The company, the trade union or both parties jointly may ask Acas to assist
with the resolution of the issue by conciliation. If Acas is unable to help the
parties to a conciliated solution, then at the request of both parties jointly,
Acas may be asked to appoint an arbitrator. Management and trade union
agree to be bound by the arbitrators decision.
Signed for the company ....................................................................
Signed for the trade union .................................................................

A personnel record form
Last updated on ..................................... Date of birth................................
Surname ................................................ Other names...............................
Present address .........................................................................................
...............................................................................................................
...............................................................................................................
Telephone ..................................................................................................
Address and phone number of emergency contact
...............................................................................................................
...............................................................................................................
...............................................................................................................
Any job-related disability ............................................................................
Written statement of terms of employment issued on ................................
National insurance no ................................................................................
Tax code ..................................... Job title .................................................
Previous jobs within company:....................................................................

From ..................................................... To ..............................................
From ..................................................... To ..............................................
From ..................................................... To ..............................................
Previous employers: ...................................................................................
Job title .....................................................................................................
From ...................................................... To ..............................................
Job title .....................................................................................................
From ...................................................... To ..............................................
Education, professional and craft qualifications

...............................................................................................................
...............................................................................................................
Training (eg on the job, training courses) 11
From ...................................................... To ..............................................
From ...................................................... To ..............................................
aPPEndiX 57
Discipline
Date of action Action (eg warning, Reason Results of appeal

written) (eg absence, (if any) any other
lateness) remarks
1
2
3
4
5
6
7
8
9
10
Absence
Dates Reasons given
Authorised (by Remarks
Days absent
(from-to) (eg sickness,
self-certificate,
bereavement,
doctors
no transport)
certificate)
1
2
3
4
5
6
7
8
9
10

Lateness
Date Period of lateness Reason given Remarks
1
2
3
4
5
6
7
8
9
10
Accidents
Date Description of Injury Action taken
accident
1
2
3
4
5
6
7
8
9 11
10
imPlEmEnTing ThE job EvaluaTion aPPEndiX

schEmE 3 59
Two example job descriptions
1. Office Assistant/Typist
main purpose of job
To do clerical and typing duties for sales manager.
main duties
1. Typing: correspondence, orders received, invoices.
2. Office administration: filing of correspondence etc; recording and

despatching all outgoing mail; recording all incoming mail; answering
telephone and passing on messages, maintaining (including ordering)
of stationery.
2. Warehouse Assistant
main purpose of job
To assist warehouse manager with warehouse duties.
main duties
1. Receiving and checking all goods inwards.
2. Despatching all goods outwards.
3. Keeping warehouse clean and tidy.
4. Checking for damaged stock and reporting any damage to

warehouse manager.
5. Doing any errands that warehouse manager may require.
6. During slack periods, assisting with any office duties that the office
manager may require.

Person specification
Company name
Job title
criteria Essential desirable
Qualifications
Attainments/competencies (list as required)
Previous experience
Special aptitudes (eg oral or written skills,

manual dexterity, etc)
Physical abilities, circumstances, but only
if justifiable requirement for the job
11

schEmE 3 61
Application form
application for employment as:
...............................................................................................................
Surname (Block letters) .................................................................................
Other names ................................................................................................
Address ........................................................................................................
...............................................................................................................
...............................................................................................................
Telephone .....................................................................................................
Education and training

Details and results of any examinations taken ................................................
...............................................................................................................
...............................................................................................................
...............................................................................................................
Further education (eg technical college, evening classes)

...............................................................................................................
...............................................................................................................
...............................................................................................................
Any craft or other training ..............................................................................
...............................................................................................................
...............................................................................................................
...............................................................................................................
...............................................................................................................

Employment history
1. Present employer ......................................................................................
Address ........................................................................................................
...............................................................................................................
Job title ........................................................................................................
Duties ...........................................................................................................
Rate of pay ...................................................................................................
Date employed: from ................................ to ...............................................
Reason for leaving ........................................................................................
2. Previous employer ....................................................................................
Address ........................................................................................................
...............................................................................................................
Job title ........................................................................................................
Duties ...........................................................................................................
Rate of pay ...................................................................................................
Date employed: from ................................ to ...............................................
Reason for leaving ........................................................................................
no approach will be made to your present employer before an offer of

employment is made to you.
I can confirm that to the best of my knowledge the above information is

correct. I accept that providing deliberately false information could result
in my dismissal.
11
Signature .................................................. Date ..........................................

schEmE 3 63
Example of a written statement
The following gives an example of a possible form of a written statement

of main terms and conditions of employment under the Employment
rights act 1996. This example is taken from the department for
business, innovation and skills website at www.bis.gov.uk
Written statement of employment particulars
1. You (Name of employee).................................................................................
began employment with (Name of employer) .................................................
on (Date employment started) ..........................................................................
2. *a) Your previous employment with (Name of previous employer or employers)

................................................................................................................
does count as part of your period of continuous employment which
therefore began on (Date period of continuous employment commenced)
................................................................................................................
or
*b) Your previous employment does not count as part of your period of
continuous employment
*delete (a) or (b) as appropriate
3. a) You are employed as a (job title)

................................................................................................................
or
b) A brief description of the work for which you are employed
(Brief work description) ...................................................................................

4. a) Your place of work is (Address of workplace)
................................................................................................................
b) You are *required/permitted to work at the following places (Give details)
.............................................................................................................................................
*delete as appropriate
and the address of your employer is (Address of employer)
................................................................................................................
5. Your pay will be (Particulars of scale or rate of remuneration, or of the method

of calculating remuneration)..........................................................................
6. You will be paid (Particulars of intervals at which remuneration is to be paid)

.............................................................................................................................................
7. Your hours of work are (Particulars including details of any normal working hours)
................................................................................................................
8. Your holiday entitlement is (Particulars including entitlement to holiday pay and

public holidays. You must give enough information to enable entitlements, including
accrued holiday pay on termination, to be precisely calculated)
................................................................................................................
9. a) In case of incapacity for work (Terms and conditions relating to sickness or

injury and any provision for sick pay)
................................................................................................................
or
b) Particulars of any terms and conditions relating to incapacity for
work due to sickness or injury, including any provision for sick pay, can
be found in (Refer to provisions of some other document which the employee has
reasonable opportunities of reading in the course of his or her employment or which is
made reasonably accessible to him or her in some other way) 11
................................................................................................................

schEmE 3 65
10. a) Particulars of pensions and pension schemes are (Particulars)
................................................................................................................
or
b) Particulars of terms and conditions relating to pensions and pension
schemes, can be found in (Refer to provisions of some other document which the
or which is made reasonably accessible to him or her in some other way)
................................................................................................................
11. a) The amount of notice of termination of your employment you are

entitled to receive is (Period of notice)
................................................................................................................
The amount of notice you are required to give is (Period of notice)
................................................................................................................
or
b) Particulars of the amount of notice of termination of your employment
that you are entitled to receive and are required to give are contained in
(Refer to relevant legislation or the provisions of any collective agreement directly affecting
the terms and conditions of the employment, which the employee has reasonable
opportunities of reading in the course of his or her employment or which is made
reasonably accessible to him or her in some other way)
12. a) Your employment is permanent subject to 11 above, to general rights

of termination under the law and to the following (Details of any other rights of
termination) ............................................................................................................................
or
b) Your employment contract is for a fixed-term and expires on (Date)........
or
c) Your employment is temporary and is expected to continue for
(Period of likely duration) ..................................................................................
This should be used only as an indication of the likely duration

13. The collective agreements which directly affect the terms and conditions
of your employment are (Details identifying the relevant agreements and
indicating, where the employer is not a party, the persons by whom they were
made)...................................................................................................................
14.*a) You are not expected to work outside the UK (for more than one month)
delete words in brackets if they are inappropriate
or
*b) You will be required to work in (Details of work location outside the UK)
................................................................................................................
for (Period of work outside UK, where more than one month)....................................
You will be paid in (Currency) .......................................................................
and will be entitled to (Details of any additional remuneration payable to the
employee, and any benefits to be provided, because he/she is required to work outside
the UK)
................................................................................................................
The terms relating to your return to the UK are (Details) ..............................
*delete (a) or (b) as appropriate
15. a) The disciplinary rules which apply to you are (An explanation of the rules)
or .............................................................................................................
b) The disciplinary rules which apply to you can be found in (Refer to

provisions of some other document which the employee has reasonable opportunities of
reading in the course of his or her employment or which is made reasonably accessible to
him or her in some other way)
16. If you are dissatisfied with any disciplinary decision which affects you,
you should apply in the first instance to: (Name of the person an employee
application should be made to, or position held, eg supervisor)
.............................................................................................................................................
11

schEmE 3 67
17. You should make your application by (Explain how applications should be made)
................................................................................................................
18. If you have a grievance about your employment you should apply in the
first instance to (Name of the person an employee grievance should be raised with, or
position held, eg personnel officer)
................................................................................................................
19. You should make your application by (Explain how grievances are to be raised)
................................................................................................................
20. a) Subsequent steps in the firms disciplinary and grievance procedures

are (An explanation of the steps)
................................................................................................................
or
b) Subsequent steps in the firms disciplinary and grievance procedures
are set out in (Refer to provisions of some other document which the employee has
reasonable opportunities of reading in the course of his or her employment or which is
made reasonably accessible to him or her in some other way)
................................................................................................................
21. A contracting-out certificate under the Social Security Pensions Act 1975
*is/is not in force for the employment this statement is being issued for
................................................................................................................
*delete as appropriate

work
acas Publications
Book time with your
Employment Specialist
Whether you need to know how to write a contract of employment,

how much holiday you are entitled to or about the latest employment
legislation, our range of booklets and leaflets give practical information
and advice for both employers and employees on employment matters.
Our publications range from full guidance handbooks and booklets to

advice leaflets and self help guides.
View and order online at www.acas.org.uk/publications.
We also have a free quarterly newsletter to keep you informed about

the latest developments in employment legislation. You can subscribe
online at www.acas.org.uk/subscribe.
11
acas PublicaTions 69
work
Training
Our training is carried out by experience Acas staff who work with businesses
every day. They will show you the value to your business of following good
practice in employment matters and how to avoid the common pitfalls. We
also run special training sessions on new legislation.
Look at the Acas website (www.acas.org.uk/training) for up-to-date

information about all our training or if you want to book a place online.
Training sessions are specially designed for smaller companies and our
current programme includes:
Managing discipline and grievances
Managing absence at work
Essential skills for supervisors
Having a difficult conversation
Contracts of employment how to get it right
Employment law update
We also have an online learning package to help you with discipline and
grievance handling just go to www.acas.org.uk and click on e-learning.

work
notes
Some space for you to make
a few notes of your own
noTEs 71
Information in this booklet has been revised up to the date of the last
reprint see date below. For more up-to-date information check the
Acas website.
Legal information is provided for guidance only and should not be

regarded as an authoritative statement of the law, which can only be
made by reference to the particular circumstances which apply. It may,
therefore, be wise to seek legal advice.
Acas aims to improve organisations and working life through better

employment relations. We provide up-to-date information, independent
advice, high quality training and we work with employers and employees
to solve problems and improve performance.
We are an independent, publicly-funded organisation and many of our

services are free.
November 2010
Designed by to the point, 020 7378 6999. ref: 5242

Acas
Employing people: a handbook for small firms
Acas main offices:
National Scotland
London Glasgow
East Midlands South East

Nottingham Paddock Wood, Kent
East of England South East

Bury St Edmunds, Suffolk Fleet, Hampshire
London South West

Bristol
North East
Newcastle upon Tyne West Midlands
Birmingham
North West
Manchester Yorkshire and Humber
Leeds
North West
Liverpool Wales
Cardiff
www.acas.org.uk
Helpline
08457 47 47 47
H01
08456 06 16 00 08457 38 37 36
for Minicom users Acas Customer Services Team who
can provide details of services and
08702 42 90 90 training in your area or visit
Acas publications orderline www.acas.org.uk/training
To view a full list of Acas publications 08456 00 34 44

go to www.acas.org.uk/publications for questions on managing
equality in the workplace

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Employing people:

a handbook for small firms

We advise and guide

We work with you

Did you know?

We also deliver training on good practice in

Employing people just common sense? 5

1 Planning employment needs 6

getting the right information 6

making employment decisions 7

how to avoid bad recruitment 8

getting the right person 9

3 The employment contract 12

What is an employment contract? 12

does an employment contract need to be in writing? 13

What are implied terms? 14

how can a contract be altered? 22

how can a contract be ended? 23

how much should firms pay? 25

Time rated payment systems 26

incentive payment systems 26

method of pay cash or cashless pay? 27

What are the problems? 27

how can problems be overcome? 28

induction training for new recruits 30

6 Rules and procedures key points 32

What should rules cover? 33

breaking company rules 34

making known employee grievances 36

EmPloying PEoPlE: a handbook for small firms

What is a fair dismissal? 39

8 Controlling labour costs absence and employee turnover 41

What affects absence levels? 42

What is the size of the problem? 42

What can be done? 44

What do employees need to know? 45

how can employees be kept informed? 46

Why have employee representation? 48

What forms can employee representation take? 49

What is collective bargaining? 51

What statutory rights arise when unions are recognised? 52

making collective bargaining arrangements clear 52

The subjects of negotiations 53

resolving outstanding differences 53

Employment relations training 54

Examples and forms 56

imPlEmEnTing ThE job EvaluaTionconTEnTs

Employing people seems a perfectly These problems can be overcome by

recruiting unsuitable employees small firms to anticipate

low morale and motivation employees to know where they

getting the right A card index for each employee

6 EmPloying PEoPlE: a handbook for small firms

are new employees necessary?

What is the job?

how can applicants be attracted?

Would an application form help selection?

Which is the best way to interview?

What use can be made of references?