Employment law for vets: what you really need to know

Being an employer is not as daunting as some think. This article summarises key elements you will need to consider – from taking on that first employee, to managing the employment relationship.

Financial issues

Regarding financials, you will need to:

• register as an employer with HMRC up to four weeks before you pay your new employee
• either operate a payroll yourself, or get an accountant or bookkeeper to do it for you
• ensure you pay at least the national minimum wage (NMW) amount
• employer’s liability insurance

Legal issues

You need to be aware of some of the basic employment rights that apply from day one of employment. These include having a right to:

• an itemised payslip
• holiday
• the NMW
• statutory sick pay
• health and safety protection
• time off for children/dependants
• protection against discrimination

Before offering a job, ensure you have checked:

• whether the individual has the right to work in UK
• his or her references
• his or her criminal record, where necessary (now called a disclosure and barring service check)

You must keep records on:

• rates of pay
• payroll – that is, tax and National Insurance
• sickness absence
• accidents and injuries

You need to be aware of the following data protection issues (particularly post GDPR):

• Personal information must be relevant and adequate – not excessive.
• You must be transparent with your employees about the personal data you hold.
• You should have extra levels of protection for sensitive data.
• You should consider why you hold personal data and not retain it for longer than required.
• Workers now have increased rights to inspect data, including a right to be forgotten.

You must, by law, have the following in place:

• discipline and grievance procedures (at least following the Advisory, Conciliation and Arbitration Service Code of Practice)
• health and safety measures if you have more than five employees
• a written statement of particulars – basic terms of employment (within two months of the employee commencing employment)
• a data protection policy (covering off GDPR)

The BVA has developed a comprehensive guide for veterinary practices on all things related to the employment relationship.

HR issues

It is likely, at some stage, you will encounter challenges with managing your staff. Creating policies to deal with the following issues can really help:

• performance
• absence
• behaviour and conduct (for example, use of computer systems and social media)
• conflict

Finding the right candidate is essential. Taking time to consider exactly what role you want your employee to undertake and what type of candidate you are looking for is key. Don’t just use general job descriptions or job adverts – make these specific to your business and needs.

Misconceptions

Many misconceptions pertaining to employment law exist. These include:

• A belief that once your employee is out of his or her probation period, it is difficult to terminate the employment relationship if it is not working out or if the employee is not performing. Probation periods mean very little in law – they essentially just allow an employer to set shorter notice periods and, in essence, all employees are on two-year probation. An employee does not have a right to claim unfair dismissal until he or she has two years’ service, or unless his or her dismissal is for a discriminatory reason (the right not to be discriminated against related to one of the protected characteristics outlined in the Equality Act 2010 arises from day one and, in some cases, before even the employment relationship has begun).
• A belief that if no contract in writing exists, no employment relationship has been formed, so ending the arrangement is easy and notice periods will not apply. An employment contract can be formed by implication (that is, just by the employee coming into work and the employer paying a wage) and employees have statutory rights such as entitlement to notice periods, holiday pay and NMW that apply automatically. Also, as mentioned, an employee has a right to written particulars of employment within the first two months of employment, and it is always advisable to provide a comprehensive contract that sets out bespoke terms and conditions of employment, to avoid any dispute or lack of clarity.

Overall, employment law is not a tightrope that an employer is precariously walking along, risking falling off at any moment. The boundaries are much wider, and the key is to properly understand what is required of both the employer and employee, and effectively manage performance – perhaps the most time-consuming, concerning and impactful issue for any employer. Getting this right will lead to engaged and productive staff, and a happier workplace.

Locums

Locums have been under scrutiny following HMRC’s changes to the off-payroll working through an intermediary (IR35) legislation. This has mainly impacted public sector locums of doctors and nurses, but it is expected locum vets will soon face more attention. IR35 applies to locums and it is advisable to seek specialist advice in the event you are unsure of the position, both from the practice’s and locum’s point of view.

However, in addition to the tax position and implications is the question of employment status. Generally, locums will be considered self-employed unless they are acting through an umbrella or personal service company. But this does not avoid the need to continually assess the actual arrangement a practice has with a locum. It should be noted, in determining employment status, the courts, tribunals and HMRC will look at all aspects of the arrangement and no single test will be conclusive in all cases. In addition, tribunals and HMRC may have different approaches to this test.

HMRC has a useful online tool to assess whether an individual is genuinely considered self-employed for tax purposes. But from an employment law perspective, a number of additional factors should be considered and it should be noted individuals not meeting the higher benchmark of being employees may still have “worker” status. Workers are entitled to some basic rights, including holiday pay and NMW.

Factors that should be considered include:

• Mutuality of obligation – is there an obligation to work when required, or some freedom to reject a request to work?
• Personal service – the individual is required to provide the service personally and no right to a substitute exists.
• Control – the individual is under the control of the company to such a degree as to make the company his or her “master”.
• Exclusivity – the individual is not normally free to work for other organisations.
• Nature and term of engagement – the length of the engagement is not determined, with the exception of fixed-term contracts, and does not relate to the performance of a specific task.
• Pay and benefits – the individual is paid a fixed amount on a regular payment date, irrespective of performance targets or completion of a specific task.

Similar to the employment relationship, it is essential to ensure the terms of a locum arrangement are set out in writing, and the intentions of the parties regarding the terms of the arrangement are clear and transparent. The position should be continually monitored – for example, in the event the locum continues to work for the practice for a long period of time, doing the same role and essentially being treated in terms similar to those of an employee.

In addition, if you continue to monitor and understand the tax implications and liabilities, locum arrangements are likely to work well for all parties.

In summary, the key points are take time to understand your legal obligations, both from a tax and employment law perspective, and don’t panic.