Why Out Of Date Employment Contracts Are Asking For Trouble
1) They’re leaving you vulnerable to legal action
In recent years, there have been lots of updates and changes to different areas of employment law legislation, including areas like holiday pay, termination of employment and the national minimum wage.
If your business is relying on contracts of employment that aren’t up-to-date and reflective of these changes, it could essentially mean your employees might be able to successfully sue you in a tribunal.
2) It’s easier for staff to go and work for the competition
It’s highly unlikely that the competitive landscape now is the same as it was when your business started. If your sector’s grown, you’ll probably have more competitors than when you started out, so you need to make sure your contracts of employment are up to date to prevent employees leaving you and going to work for the competition.
You’re unlikely to have adequate protection in place to protect your business from this unless you regularly review your contracts.
Example: if an employee has worked for you for ten years, and been promoted in that time, any restrictions in place around them leaving when they were a junior employee won’t offer you the necessary protection if they then choose to leave while in a senior role.
3) They could be costing you money unnecessarily
You might have employment contracts in place that, up until now have been reflective of the size and scale of your business. But, if your business has grown or its circumstances have changed, the terms of those contracts might no longer be workable.
Example: when you started your small business, you might have offered an enhanced sick pay scheme. However, you’ve grown the business and now have more employees meaning more people off sick and a bigger sick-pay bill. Reviewing the rate of sick pay you offer and then updating your contracts ensure they reflect this can ultimately help you to reduce your overheads and save money.
4) They give employees ammunition for raising disputes
If your employment contracts are out of date, it presents the perfect opportunity for a disgruntled employee to raise a dispute. This results in you arguing one thing and your employee arguing another, with no-one able to prove the case.
Having up-to-date, accurate employment contracts that reflect your current relationships with your employees, it allows you to nip issues like this in the bud immediately.
Charlotte Geesin is head of employment law at Howarths. If you need advice on how to update your employment contracts, contact her on firstname.lastname@example.org or call 01274 864999.