How to reduce the risk of being sued by an employee

Let’s start off by looking at the four most common claims by employees.

1. Unpaid leave and overtime

Partly due to work pressure and employers not having enough money to recruit new staff, employees are working outside contracted hours. Shockingly, an Institute of Leadership and Management (ILM) survey found that 90 per cent of managers did just that, with 13 per cent working two days worth of unpaid overtime a week. Further research highlighted that 76 per cent of employees worked late in the office or at home on a constant basis, while 48 per cent work through their lunch-breaks and more than one third working through the weekends.

Although most overtime is voluntary, it can have a significant impact on morale, and could possibly have a detrimental effect on productivity. Furthermore, with increased working hours there’s a higher risk of employees suffering from work related stress, so make sure they receive appropriate breaks if they do additional work in order to comply with Health and Safety procedures.

When it comes to unpaid leave and overtime, it all boils down to contracts. Aside from having clear policies in place in your employee manual, make sure that any compulsory overtime has been outlined in a contract of employment. The Working Time Regulations 1998 stipulates that employees cannot be made to work more than an average of 48 hours per week without their agreement. But even if they enter a written agreement to work beyond these hours, under UK and Welsh laws workers do not have a legal right to overtime pay.

And even if employers choose not to always have staff work over 48 hours, it is good practice to include overtime terms so it can be referred to when the business is extremely busy.

Keep in mind that most overtime claims are based on “unrequested” overtime, so it might be best to document the working hours of employees. Employees themselves can sign off and file ‘timesheets’, letting the business know exactly how long they’ve worked for. This could also be used for employees not supposed to work overtime so as to dictate proper pay.

What employers can choose to do, however, is provide workers with more time off instead. This is known as ‘time off in lieu’ (TOIL). TOIL may only be accumulated within a plan agreed with the line manager. Any additional hours worked must be agreed in advance, with time off equating to time actually worked. In this case, make it clear that TOIL not taken within six months of accrual will be lost. 

When it comes to vacation leave, many businesses attempt to limit the amount of time that can be acquired throughout the year. The important thing to remember, is to communicate staff when the days available for vacation leave will expire, how much time they have to use up, and, most importantly, that it should all be documented and signed off.

To make sure that you have an accurate account of leave, include the issue in your annual employee acknowledgement. Your choice of words will be key! The language should make it clear that the employee is vouching for the accuracy of the number.

This should be applicable to EVERYONE, even if it might sound silly to track the leave of a founder or CEO. You never know who could sue.

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