Updated: Mar 12, 2021
Time to bring in an extra pair of hands?
Congratulations! Hiring a new employee is a testament to the achievements and growth of your company. Whether hiring your first employee or sixtieth, it can be both an exciting and stressful time in any organisation, so with the expert guidance of PwC Director, Barrister and our masterclass speaker, Tilly Harries, and crafted by Jamie Lennon, we’ve put together an employment law blog to help give you an idea of the considerations you should be making.
FYI, Tilly loves ABBA, so we’ll reference them heavily, with varying degrees of relevance. But let’s just roll with it.
Take a chance on me: Recruitment
Great messaging attracts great candidates and provides them with the motivation to work for your company. Something that employers often overlook, however, is the importance of a message that draws in a diverse array of talent with the right skills and enthusiasm.
Organisations in the top quartile for gender diversity are 15% more likely than their competitors to achieve financial returns greater than their national industry average. This jumps to 35% for those in the top quartile for ethnic diversity (McKinsey, 2015).
There are many different theories as to why diversity promotes better business performance, but from a recruitment standpoint, ensuring your messaging is inclusive to the broadest pool of potential candidates will provide you with the greatest chance of uncovering your next big hire.
Unlike most organisations, ABBA are a group that nailed gender diversity from day one. Many established titans of industry are now playing catchup regarding diversity of all kinds and setting targets to address the problem. Young companies have an advantage, in this sense, as they can drive it with greater agility.
When posting job adverts, companies should make sure they are gender-neutral and avoid language which could be seen as discriminatory; paying particular attention to unconscious manifestations. For example, one study identified an array of words commonly used in job advertisements which carry ‘gendered’ connotations, reinforce gender stereotypes and prevent diversity in applications (Gaucher, Friesen, Kay, 2011).
Terms such as ‘competitive’ and ‘leader’ were found to suggest masculinity and make the role less appealing to women. The logic of this study can be extrapolated out to other areas too; words such as ‘mature’ or ‘energetic’, may imply an age bias. Where necessary, adjustments should also be made to accommodate disabled applicants.
Beyond the application stage, to help navigate these complexities, employers should ask all applicants the same questions and avoid those related to health, life stage or personal circumstances.
The day before you came: Commencing employment
One of the strengths of ABBA is their ability to seamlessly transition between roles; lead vocals, backing vocals and various instruments, when required. However, when hiring new employees, companies must be clear what the applicant’s employment status will be, i.e. self-employed independent contractor, employee or agency worker. Depending on the answer, this will impact an employee’s national insurance contributions, tax treatments and individual rights as well as the obligations of employee and employer.
With Brexit looming ever closer, it might not be as easy for the next Swedish pop group to break into these British shores. Scale-ups must check their new recruits have the legal right to work in the UK before they commence employment, but there are other legal requirements, too. A section 1 statement must be provided within two months of employment, employees must be auto-enrolled into a pension scheme and have signed an opt-out agreement if exceeding the 48 maximum working week.
It seems like a lot of information, so where do you start?! Don’t worry this is made easy and it can be found in one place through the wealth of resources available (including an on-demand lawyer) through the PwC HR Hub, designed for growth businesses, that Tilly set up and runs.
What’s the name of the game?: The contract of employment
The song ‘What’s the name of the game?’ is roughly about setting the terms of a relationship before going any further. As sure as ABBA signed a contract to Polar Music back in the 1970s, every employee needs a contract with their employer, which must consist of:
Express terms (agreed between the parties orally or in writing)
Statutory terms (minimum rights imposed by legislation e.g. notice, holidays, pay)
Implied terms (e.g. implied through custom & practice, for business efficacy. A key implied term is mutual trust and confidence)
I don’t think ABBA had any publicised instances of contractual change to reference, but employers have three choices if they want to change contractual terms:
Obtain the employee’s consent to the change;
Make the change unilaterally; or
Terminate the employment and offer re-engagement on the new terms.
Obviously, the above approaches may present difficulties. In order to avoid this, employers should responsibly build as much flexibility as possible into their contracts of employment up front. This provides the employee visibility and the employer latitude to adapt to changing business needs. For example, an employer may wish to include a mobility clause, requirements to work additional hours, requirements to work in a different role or undertake additional duties.
One Man, One Woman: Pay equality
The song ‘One Man, One Woman’ doesn’t really have any relevance to pay equality, other than the fact it mentions both a man and a woman, but it serves as a good segue. ABBA are pretty good role models in terms of gender equality, so I would hope that they split the proceeds of their work evenly and, thus, abided by an equality clause throughout their careers.
An ‘equality clause’ is implied into all contracts of employment. This operates when an employee is employed either on:
Like work (that is work which is the same or broadly similar);
Work which has been rated as being equivalent under a job evaluation scheme; or
Work which is of an equal value to that performed by a member of the opposite sex in the same employment.
If any of these three situations exist, any term in a woman’s contract (for example) which is less favourable than a man’s contract (or vice-versa) shall be modified so as to be not less favourable, unless the employer can show that the reason for the difference in pay or conditions is a material factor other than gender. To avoid any equal pay issues in the future, employers should consider how salary levels are set for specific roles as early as possible.
It’s hard to squeeze in everything you need to know in one article, so hopefully you found this a useful starting point. If you want to learn more about PwC HR Hub, our Programmes or other topics such as how to protect your business interests and manage the employment relationship, then get in touch.
Evidence That Gendered Wording in Job Advertisements Exists and Sustains Gender Inequality, Gaucher, Friesen, Kay, 2011.
Why diversity matters, Hunt, Layton, Prince, 2015.