Firms must beware jobs law
MOST small firms are unaware that they will lose their right to defend themselves in employment tribunals from October 1 if their disgruntled employees do not have a formal contract.
They are also unaware that if they fail to prove they have followed the Government's new 13-step dispute resolution procedure before firing a member of staff, as'v tribunal would raise an award a successful unfair dismissal case by 5Opc,
Peninsula, the employment law specialist, estimates that 80pc of firms employing between one and four staff do not issue contract and so will be affected.
Mike Huss from Peninsula said the new rules meant that for the first time the smallest firms faced the prospect of a real and significant financial penalty for failing to comply with the law.
Of 3,400 employers quizzed by the law firm in June, 97pc said they did not know what effect the new law would have on their businesses.
Mr Huss estimated the cost of introducing employment contracts and dispute resolution procedures at all firms that did not comply with the law as at least £1.5billion.
The rules require firms to write a formal letter to staff they intend to fire, hold'a formal meeting — with a witness present when requested — and to offer a right to appeal.
If the employer cannot pro-vide documentary evidence of the procedure to a tribunal, following a claim, Mr Huss said he would "automatically" lose the case.