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Employee Benefits Advice for Corporate Clients

Recruitment can be a risky business

Recruitment isn’t an exact science, but in an attempt to get it right first time many businesses turn to professional recruitment firms in the belief that their expertise will save time and reduce costs. Whatever choice your company makes, it’s important to remember that there is no certainty that everything will go smoothly every time.

Our Head of Employee Benefits, Elliott Silk has put together 5 Top Tips to help reduce the risk to your business when it comes to recruitment.

5 Top Tips:

  1. Protect your business. If you have insurance, make sure you take the time to fully understand it. In most cases insurance is full of terms and conditions and you may have little control of the employment relations decisions you make.
  2. Look into EPL (Employment Practice Liability) insurance. To find out how EPL can benefit your business and its associated costs contact us.
  3. The HR function consists of a vast number of specialisms and it is important that you outsource work, where required. It can be helpful to use specialist recruitment agencies to support your business.
  4. Not all recruitment firms are the same so make sure you are comfortable and confident in the business you select. Do your homework and ask around for recommendations. You don’t have to put all your eggs in one basket and you can use multiple recruiters!
  5. Be clear about what you expect from a recruiter from the outset. It may be worth providing instructions to recruitment agencies regarding offers in writing or by email rather than verbally to save any misunderstandings. Our case study below shows how a simple misunderstanding can lead to costly employment tribunal. 

A Recent Case Overview:

An indoor snow centre recently instructed a recruitment agency to put forward suitable candidates for maintenance engineer positions. Interviews were held by the employer and after having two interviews, the claimant in this case was notified by the recruitment agency that they had been successful.

The claimant accepted the job via the recruitment agency. The offer was subsequently withdrawn by the employer and despite all parties agreeing that neither the start date nor salary were finalised at this point, the claimant felt that this ‘offer withdrawal’ constituted a breach of contract. Ensuing discussions between the claimant and the recruitment agency were disputed by both sides and as a result, this case made its way to the employment tribunal.

The Result:

The tribunal felt that although the employer has denied any offer being made, the recruitment agency was in effect acting on their behalf and as such, the case comes down to whether the recruitment agency did actually put an offer forward.

The tribunal believed the claimants recollection of events and conversations with the recruitment agency and felt that a contract had been established between claimant and employer once the offer had been accepted. As such, a contract can only be terminated by giving reasonable notice and if notice is not specified then it ultimately comes down to reasonableness. The tribunal found one month’s notice to be appropriate in this case and subsequently instructed the employer to pay the claimant in full for that period, as well as the employment tribunal fees incurred by the claimant when taking this action. Let’s also not forget the costs of the employer defending the claim.

Forms of Tribunal Protection:

The legal fees associated with defending a claim can mount up. Speaking to employers we have ascertained that some rely on outsourced HR with indemnity whilst others buy legal expense policies, both of which have some major shortfalls, to try to cover themselves in the event of a tribunal claim. When talking to an ex-Acas conciliator we were told that, in their view, the most comprehensive protection they have seen is (EPL) insurance which is insurance that is specifically designed for employment related risk.

In the case outlined, an EPL insurance policy would have protected this business from the associated costs and the insurer would also have offered the employer assistance before the claim to help guide them through the employment law minefield. The EPL insurance policy means that the employer could even give the insurer a call if they just wanted a bit of guidance. In this example, the employer could have asked the insurer what issues they should look out for with recruitment? What should they be aware of? What information should they give the recruiter? If these questions had been asked in advance, this situation may have been avoided.

Have you had any issues arising out of recruitment? Or do you think you have found the perfect solution? Either way, we'd love to hear about your experience, email us

Investing involves risk and the value of investments and the income from them may fall as well as rise and are not guaranteed. Investors may not get back the original amount invested.