REWARD
How to eliminate risk when employing family or friends
Danny Done, managing director, Portfolio Payroll , highlights some of the key areas for consideration when employing family members and friends
E mploying family members or friends might sound like a great idea. It avoids the unknown of employing someone you don’t know. However, there are important employment law considerations to think about first. Employment status A friend or family member may regularly carry out work for the organisation and say they’re happy to do so without any pay. On the surface, this could be a big help to the business, particularly if they’re just starting out. It might not, however, be that straightforward and is likely to come with risk. In the eyes of the law, such an individual could be seen as being at least a worker and most workers are entitled to receive the national minimum wage for the work they do. The status of an individual also dictates the specific rights they have, so it’s important to get this straight from the start. In addition to the right to receive the minimum wage, workers are also protected, for example, when it comes to working time. Employees, however, have more rights which include (among other things): l protection against unfair dismissal l an implied term of mutual trust and confidence l the right to receive a statutory redundancy payment. Fair and consistent treatment It’s crucial to get off on the right foot and, like every other employee, they must be provided with a contract of employment on or before their first day of work. It must set out the terms which will govern that employer and employee relationship, for example, the start date, job title and where / when they will work. Not only is there a risk of a claim being brought in an employment
tribunal if it isn’t issued, but it could also cause confusion if the terms aren’t clearly set out from the start. When taking on a family member or friend for work, an employer shouldn’t assume that, just because they may have been around the business growing up, or have heard about it in a social setting, they don’t need an induction. They should, instead, be treated like any other new starter and, in addition to a contract of employment, they should be provided with all policies and procedures. That way, expectations about their behaviour at work are clearly set from the very beginning. “That way, expectations about their behaviour at work are clearly set from the very beginning” Although they might be a family member or friend, they should be treated fairly and consistently with other employees. That will mean dealing with any performance or misconduct issues in the usual way and not giving them any preferential treatment. This may be a daunting prospect for some employers if they must issue a warning or even ultimately dismiss their niece, nephew, son, daughter or parent. So, employers will need to think about whether that could be a problem for them in the future. They’re not precluded from bringing an employment tribunal claim just because they’re a friend or family member, so it’s crucial full and fair procedures are followed. If it’s a younger family member, an employer will need to ensure the specific working time provisions are adhered to, as
they must do with any young worker. 15-year-olds, for example, cannot work for more than two hours on a school day or a Sunday and no more than eight hours per day or 35 hours per week during school holidays. What if tensions arise? Everything might start off rosy. But the lines between work and personal lives can quickly become blurred when working with friends or family. Something might happen outside of work which impacts upon the working relationship. Spending a lot more time together than either party is used to may also cause friction in some circumstances. An employee, for instance, may not be used to taking instruction from their friend or family member. However, the usual rules apply. As an employee, they will have all the same rights as any other employee, so there could be a risk of an unfair dismissal claim if an employee is dismissed in the heat of the moment without any fair process and procedure. Takeaway points Just because an individual is a friend or a family member, when it comes to working for the business and employment law, that doesn’t matter. Ascertaining the status of the individual correctly from the start is key so it’s clear what rights they have. Then an employer needs to ensure they’re treated fairly and consistently with others throughout their employment. An employer will also have to make sure they’re comfortable with employing a friend or family member that they may have to discipline, or performance manage, if things don’t go as planned. n
| Professional in Payroll, Pensions and Reward | May 2024 | Issue 100 56
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