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Top 6 common issues faced by employers

Sep 13, 2012

At Waterfront we assist many different employer organisations across a wide range of industries.  

Still, there are some common questions we are frequently asked no matter who the employer.  Here they are, in no particular order:  

1.  Are restrictive covenants enforceable?  

Strong restrictive covenants can be important to a business[/caption] Yes, provided they are drafted properly.  Restrictions on what an employee can or can’t do after he leaves your business are used effectively by many businesses  – whether it's restricting employees from poaching customers, running off to a competitor or convincing their former colleagues to jump ship as well.   However, a court will only uphold such a clause if it protects a legitimate business interest and goes no further than is necessary to do so.  Therefore it is important to ensure that the restrictions are tailored to take into account your industry, the seniority of the employee and the exact protection you need.  

2.  I have concerns over an employee’s performance or conduct, what are my options?  

It depends on how long the employee has been with the business. If they have been there long enough to acquire the statutory protection against unfair dismissal then you need to ensure that you follow a fair procedure and identify a fair reason before making any decisions about issuing warnings or dismissing. If the employee does not have the protection against unfair dismissal then you do not always need to follow certain procedures. However, it makes sense to follow best practice in any event – take this real-life example:    

"A member of bar staff appears to be drunk at work and then passes out.  Since he does not have unfair dismissal rights his supervisor decides to dismiss him on the spot without carrying out a fair procedure.  In actual fact he is diabetic and was having a hypoglycaemic fit.  If the supervisor had followed a fair procedure before dismissing then she would have discovered this fact.  Indeed the employee could have been removed from the bar immediately if he had been suspended on full pay whilst an investigation was carried out.  The company are now exposed to a claim of disability discrimination, for which no minimum length of service is required."

In these circumstances it helps to have clear written policies in place so that both you and your employees know how to proceed in such situations.  

3.  A ex-employee is damaging my business, how do I stop him?   

It is not unusual for an employee to leave a business on poor terms or with the intention of setting up in competition.  Whatever the motivation former employees can cause problems for companies by using their intellectual property, confidential information or trade secrets, stealing customers and employees or by simply bad-mouthing the employer in the marketplace. The starting point is to look at the contract of employment.  Hopefully it will contain well-drafted clauses including restrictive covenants which you can ultimately enforce by seeking an order from the court. The contract should expressly say who owns any intellectual property and define what is treated as confidential information. Beyond that, the employee might have made comments which could be defamatory in which you case you should have another right of action in the courts.  

4.  I want to change my employees’ contracts of employment.  How do I do it?  

Again, this depends upon how long the employees in question have been with the business. If they do not have unfair dismissal rights then the process is quite straightforward but if they are protected you need to tread more carefully. It can be done but you need to ensure that you have a good business reason for the changes.  You should also follow a fair process by consulting with any staff who are resistant to the changes.  

5.  I’m buying a business but I don’t want the employees that come with it, what can I do?  

A TUPE transfer could leave your workforce looking crowded. Unless you are buying all the shares in a company, it is likely that The Transfer of Undertakings (Protection of Employment) Regulations or “TUPE” will apply.  This means that if you buy the business you must also take on the existing employees together with all the rights and liabilities associated with them.   It is automatically unfair for an employer to dismiss an employee for a reason connected with a business transfer unless they have what is known as an economical, technical or organisational reason.  If you find yourself with too many employees the usual way forward is to commence a redundancy consultation process once you have bought the business. However, you need to ensure that you don’t fall foul of the protection afforded to employees by TUPE.  

TUPE also applies where there is a service provision change – i.e. if a service is outsourced, brought in-house or there is a change of contractor.  So if, for example, you run a security company and you successfully tender for a contract then you might be obliged to take on some of the employees of the outgoing contractor, even if they belong to a competitor.  

6.  I have received a letter from the Employment Tribunal saying a claim has been issued against me and I have 28 days in which to reply, help!  

Don’t panic! Get in touch with us as soon as you can. We’ll need to have a copy of everything you have received in order to advise you as to where you stand – remember that the Employment Tribunal are very strict with their deadlines, so please don’t leave it too late.    

The list above is just a summary. Here at Waterfront we are well equipped to guide you through the law in this area.  If you would like to discuss any employee or HR issues then please telephone one of our employment law specialists on 020 7234 0200 or email the details to contact@waterfront.law.  Alternatively, why not ask us a question or start a debate on Twitter ( @uklaw ) ?