What does this trademark HR case mean for your small business?
How can you protect your small business from similar legal cases?
Employment law has been headline news recently with two high profile cases having been heard in court. The landmark Pimlico Plumbers and Uber court cases may bring about changes in employment law so just how could this affect small businesses?
Both Uber and Pimlico Plumbers use a common business model known as ‘gig economy’; where self-employed contractors can pick and choose each ‘gig’ or job they take on. In theory, this offers both the employer and the employee increased flexibility. It may keep payroll costs down for small businesses and gives workers the freedom to choose the jobs they want to take on.
The Court ruled against Pimlico Plumbers (employer) and determined that the self-employed, contracted plumber that brought the case was in fact a worker and therefore entitled to ‘Workers’ Rights’. That would mean the employer would have to pay National Minimum wage, sick pay and holiday pay.
The ramifications of this this case will affect HR for small business in Lichfield, Staffordshire and right across the country. Would this apply to any within your workforce? Is your human resources knowledge up to date enough to deal with the expected changes?
A spokesperson for the Department of Business, Energy and Industrial Strategy said, “The Government is committed to building an economy that works for all. We are determined to make sure our employment rules keep up to date to reflect new ways of working”.
These case rulings show that the issue has already changed. It is no longer sufficient for small business owners to rely on the umbrella-title of ‘self-employed’ for their contractors and presume that their responsibilities end there.
As a Human Resources Consultancy providing HR for small businesses we recommend conducting a proper review of all consultant or self-employment contracts across your business. Any circumstances that show your business is treating such individuals as employees implies employment status and devolves responsibility to you as an employer. For example, stipulating set hours, providing a uniform, managing performance or working for your small business solely for an extended period of time are all areas where employment status could be called into question.
Employment Partner at Irwin Mitchell, Glenn Hayes stated, “We are seeing increasing numbers of individuals challenging their status and claiming to be workers or employees”.
Obviously, challenging a case through court is extremely costly. For Pimlico Plumbers, with an annual turnover in excess of £24 million and accustomed to the PR spotlight, making an appeal against the ruling was a decision that they could afford to make. For most small businesses in Lichfield and Staffordshire this would not be an option.
With employment cases set to rise the solution comes with being prepared. The size of your business may not necessitate a human resources department but you can still benefit from the expertise of a consultancy that specialises in providing HR for small business. RF HR Solutions can perform a workforce review on your behalf.
RF HR Solutions support businesses either with an immediate, specific HR issue or provide a small business human resources package for regular and ongoing assistance. The advantage of having an expert available to address human resources issues quickly and correctly can be extremely cost effective.
Not only does it save the time of your current employees attempting to deal with human resources matters, in which they are not experts, but you also avoid the costly, negative effects of making a wrong decision.
The importance of HR for small business is becoming greater than ever in this juridical business world.
To find out more about the best human resources solution for your business in the Lichfield and Staffordshire areas contact RF HR Solutions for an HR Health Check on 01543 307 144.