Legal issues you should consider when recruiting

For some roles, it may be possible to use temporary workers initially, to try them out in post before formally hiring them, but, even then, it is generally wise to build in a trial period to assess suitability.

However, with more senior posts, that may not be feasible, and then it will be a question of a thorough selection process, designed not just to check credentials but to try, so far as possible, to assess their character and commitment.   

Most employers are now aware of the ‘no go’ areas when questioning applicants (eg about family commitments and their health), however, with so many ‘protected characteristics’ now, recruitment questions can be something of a minefield!  

Certainly, it would be wise to keep copies of questions, to show the same questions were put to each candidate, and also to avoid the temptation of margin comments on interview notes, which may be embarrassing at best and positively detrimental at worst, if they then have to be disclosed in any discrimination claim brought by an unsuccessful applicant.   

The next question is to decide the type of contract and, in particular, to be wary about requests for self-employed status where HMRC/ the Courts might find the worker was actually employed. The risk then is PAYE arrears, going back for up to six years, with interest and penalties, as well as potential employment claims against the unwary employer.

Having decided on the correct legal status, it is also important to ensure the business is properly protected, particularly when taking on key workers who could do a great deal of damage if enticed to move to a competitor.

It is important, therefore, to think about express garden leave provisions, IP rights, and express confidentiality and post-termination restrictions; not just for the SME, but also staff on the technical side of the business, and sales staff. 

Many small employers are unaware that without express provisions there is extremely limited protection legally, and many businesses have been completely undermined by competition from a former employee.

Obtaining references from former employers will be a key part of vetting the new recruit. Increasingly that can be frustrating, as former employers, fearful of claims for having provided unfavourable references to their ex-employee, opt for no more than a factual statement of employment. 

Generally though, most will be receptive to a telephone discussion and certainly that is well worth the time and effort, along with the other normal safeguarding and pre-employment health checks.

In summary, it is worth investing the time to get this right, rather than rush a process which could easily then come back to bite if a hasty appointment is made, which then needs to be unravelled.

Nikki Duncan is partner at Michelmores

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