The insanity of out-of-date employment contracts

Like Russian Roulette, not having up-to-date contracts in place is potentially a lethal game of chance, but instead of it being your life on the line, it is your business which is at stake.

With all the doom-laden talk is of ‘a cost-of-living crisis’, record inflation rates and a rapidly shrinking economy; the prevailing attitude amongst small to medium-sized firms is to tighten their belts and not invest in their business until it all blows over. This thinking would be incorrect and potentially very damaging.

It is understandable that owners (and managers) believe that slashing costs would be a sensible approach to a looming recession however, according to studies, since the COVID-19 pandemic / lockdown, grievance claims have almost tripled. This is in part due to staff becoming increasingly savvy due to online research – therefore leaving you vulnerable to legal action if your contracts are not up to scratch.

After all, we all know that it only takes one bad apple to spoil the barrel as grievances are not only expensive and time-consuming but also incredibly toxic.  It is highly likely that they will impact workplace productivity too.

On average, each grievance costs £951 in management time, and according to an ACAS report from last year, workplace conflict costs £30bn a year to UK businesses.  A further £13.1bn is then subsequently spent on recruitment and replacement costs – which at present is the single largest expense to employers.

These are astounding figures. The singular take-home message must be that investment in having sound employment contracts and staff handbooks in place is significantly less expensive than resolving issues outdated contracts perpetually create.

The temptation for many employers is to recycle old contracts, as these were most likely originally drafted by a solicitor and therefore giving them a level of misguided security.  It is ‘misguided’ quite simply because Employment Law changes twice a year, every year.

Therefore, a contract which was created years ago and is specific to only a handful of employees could be copied over to new starters without containing any new and essential legislation – this would then create a problematic contract open to exploitation.

Aside from any mandatory information, a good employment contract will comprise of additional clauses relating to such matters as staff overtime, the ability to place an employee on garden leave during their notice period, reserving the right to implement lay-off and short-term working arrangements, and preserving intellectual property rights created during work.

These could be training materials, sensitive documents, or valuable client lists. Most template contracts found on the internet do not contain such clauses.

How can Oakwood Solicitors help?

The only realistic means of future-proofing your business and issuing water-tight employment contracts is to seek professional legal advice. At Oakwood Solicitors we will ask you the right questions so that we fully understand your company ethos and how exactly you want your employees to perform.

We also offer an Employment Law & HR Package which is a fixed-fee, 12-month subscription support service delivered by our fully qualified lawyers. We will undertake a full audit of all your contracts (Third-Party as well as Employment), staff handbooks, privacy notices and all HR policies.

The package also includes out-of-hours access to lawyers for any arising employment/HR issues.

WHAT TO DO NEXT

Get in touch today for a no-obligation consultation. Choose one of the methods on the right-hand side of this page, or call us on 0113 200 9720 to find out how we can help you with your enquiry.