If your franchise business model means that your franchisees are going to recruit staff whether from the word go or as their business grows, they will legally need to issue contracts of employment.

So, that means, ideally as their franchisor, that you need to give them some guidance in this area and at the very least, a part of your franchise manual should cover it in detail. Keeping the manual updated is important because changes that could affect contracts of employment can occur as often as twice a year. Here are some guidelines to get you going, but please don't hesitate to contact me if you need further advice or you would like me to run an informal training session for some or all of your franchisees as part of their induction.

So, what should your franchisees be looking to include in their contracts of employment? (Sometimes referred to as the ‘principal statement of employment particulars’)

• Names and addresses of the employer and employee
• Date when the employment began and if applicable, service which needs to be taken into account with a previous employer
• Job title or a brief description of the work for which the employee has been hired
• Remuneration details, including pay scale or rate information, timing of payment (eg daily, weekly or monthly), and the method of payment
• Terms and conditions relating to hours of work and the normal working hours
• Terms and conditions relating to holiday entitlement, including bank holidays
• The employee’s place of work
• Details or reference to grievance, disciplinary and dismissal policies
• Terms and conditions relating to incapacity for work due to sickness or injury, and
• Details of sick pay provisions (including statutory and any organisational sickness scheme)
• Details of pensions and pension schemes
• Details of period of notice to be given by the employer and the employee
• Details of any collective agreements that directly affect the terms and conditions of employment.

A simple version of a contract of employment may not always be the answer even if it covers your franchisee’s legal requirements. It may be worth having clauses to cater for possible situations that may occur, and from my experience, these have been useful for many of my clients. For example a clause gaining agreement for the deduction of wages or a restrictive covenant clause that protects your franchisee’s client base from being stolen by an employee when he/she leaves the Company.

If your franchisees don't issue contracts of employment or, the ones they do issue are incomplete or inaccurate, then a tribunal is required to award compensation of two or four weeks’ pay capped at the statutory maximum of £330 per week from February 2008. The compensation will, however, only be payable if there is another successful claim for something else, eg unfair dismissal.

About the Author

Eve Clennell of Eden HR Consulting is a Chartered Member of the Institute of Personnel and Development. Eden HR Consulting provides the full range of HR Services and for franchisors receiving this e-mail from whichfranchise.com, Eve offers a complimentary 90 minute ‘Ask the HR Expert’ Session. Contact Eve on Tel: 01403 734455 Email: eve@edenhrconsulting.com or visit www.edenhrconsulting.com