UK: Domestic Bliss Or Home From Hell? - Navigating The Pitfalls Of Domestic Staff

Last Updated: 9 August 2011
Article by Catherine Bandy, David Barrett and Simon Fenton

The use of domestic staff such as cleaners, carers and gardeners is increasingly common. If domestic staff are engaged properly they can be a great asset to the household but careless hiring or firing can cause expensive legal problems. Here we highlight some of the practical issues to consider when hiring and dealing with domestic staff and how to avoid getting into trouble.

Hiring staff

Existing employment legislation applies before, during and after employment. As such, you need to be careful when hiring staff:

  • If you advertise for the position adverts should not discriminate on the grounds of sex, race, age, disability, marital status, sexual orientation, religion, belief or gender reassignment.
  • Beware of inadvertent discrimination, such as requirement for the applicant to be a particular sex for a role (eg a female nanny) or to have a minimum number of years' experience.
  • Avoid asking questions about the applicant's health or fitness to undertake the role unless you need to confirm the applicant is capable of carrying out integral elements of the role.

The advert, any relevant job description and any interview questions must focus on the objective requirements of the role.

During work

Paperwork is crucial, even in the most informal of arrangements. Staff performing regular work under your direction are likely to be employees and as such they should be provided with a statement of basic employment terms, such as pay, working hours, holiday entitlement; hours of work and the notice required to terminate employment, as soon as possible and at the latest within 8 weeks. Failure to provide a statement of terms can lead to an employment tribunal to clarify terms and a penalty of up to 4 weeks' pay per employee.

If you engage staff via an agency ensure that the agency is the employer of the staff and ideally indemnifies you just in case staff claim that you are in fact the employer.

If you are an employer make sure that you deduct Income Tax and National Insurance Contributions from staff wages through the Pay as You Earn (PAYE) scheme.

Firing staff

Unless dismissed for gross misconduct (eg theft) employees are entitled to a period of notice to end their employment. The legal minimum notice period is one week for every year of continuous employment, subject to a maximum of 12 weeks, although you can of course give more notice if you wish, which can be confirmed in their employment contract. Failure to provide this notice will be a breach of contract.

Staff with more than 12 months (51 weeks) service can claim unfair dismissal and so to avoid such claims employers must have a fair reason for dismissal (eg conduct, redundancy, poor performance or retirement) and must follow a fair procedure before giving notice to dismiss. The procedure to be followed will depend upon the reason for dismissal but for example if misconduct is suspected the matter must be fully investigated, even if the employee's guilt seems obvious, a meeting held to discuss the allegations where the employee can state their case before a decision is taken to dismiss). Make sure that written records are kept of any dismissal, related meetings and discussions.

You must consider any dismissal carefully before acting to ensure the reason and procedure will result in a fair dismissal. Getting a dismissal wrong can be an expensive mistake because a successful unfair dismissal claim has a maximum compensation of Ł76,700. Discrimination claims have no limit on compensation and there is no qualifying period of service meaning that discrimination claims can be brought from day one. Also, some dismissals are automatically unfair even if the employee has less than 12 months service (eg pregnancy-related dismissals).

Staff accommodation

Domestic staff such as carers are often offered accommodation as part of their job or to assist them in performing their duties. However, if accommodation is not offered and documented in the correct way this may affect the way in which you are able to remove staff from the accommodation even if their employment has ended. As a consequence, there might be considerable delay and legal expense involved in taking the property back.

Staff who occupy accommodation for the purpose of carrying out their job are likely to be regarded as 'service occupiers' meaning that they have very limited rights to live in the accommodation, and such rights will end when their employment ends. The accommodation arrangements must be recorded in writing, forming part of the terms of their employment so that both parties are clear as to the accommodation rights and when the staff can be forced to leave the premises.

If accommodation is offered to the employee but it is not required for the purpose of the employment, the employee is likely to be regarded as a 'service tenant' (if rent is paid in some form). This means that the power to obtain possession from the employee will be governed by statutory rules relating to the type of tenancy granted. It is likely that any new tenancy will be an Assured Shorthold Tenancy, which provides for strict periods of notice to be given before a court will order possession. In any event, a court cannot order possession of the premises before a minimum period of 6 months has expired from the start of occupation. This might cause considerable inconvenience if the employee turns out to be unsuitable and the property is needed for a replacement.

Inheritance issues

Great care should be taken if someone comes to look after you for free or less then market rate on the basis that you will give them something in your Will, particularly if you then change your mind. Your carer may be able to make a claim on your estate. Similarly, if you leave a gift to an employee in your Will it is advisable to leave a statement with your Will explaining the background to the gift to counter any suggestion by your family or other beneficiaries of undue influence.

The contents of this brochure are intended as guidelines for clients and other readers. It is not a substitute for considered advice on specific issues. Consequently, we cannot accept any responsibility for this information or for any errors or omissions.

Thomas Eggar LLP is a limited liability partnership registered in England and Wales under registered number OC326278 whose registered office is at The Corn Exchange, Baffin's Lane, Chichester, West Sussex, PO19 1GE (VAT number 991259583). The word 'partner' refers to a member of the LLP, or an employee or consultant with equivalent standing and qualifications. A list of the members of the LLP is displayed at the above address, together with a list of those non-members who are designated as partners. Regulated by the Solicitors Regulation Authority. Lexcel and Investors in People accredited.

Thomas Eggar LLP is not authorised by the Financial Services Authority. However, we are included on the register maintained by the Financial Services Authority so that we can carry on insurance mediation activity which is broadly the advising on, selling and administering of insurance contracts. This part of our business, including arrangements for complaints and redress if something goes wrong, is regulated by the Solicitors Regulation Authority. The register can be accessed via the Financial Services Authority website. We can also provide certain further limited investment services to clients if those services are incidental to the professional services we have been engaged to provide as solicitors.

Thesis Asset Management plc, our associated financial services company, provides a comprehensive range of investment services and advice. Thesis is owned by members of Thomas Eggar LLP but is independent of and separate to it. No lawyer connected with Thomas Eggar LLP provides services through Thesis as a practicing lawyer regulated by the Solicitors Regulation Authority. Thesis is authorised and regulated by the Financial Services Authority. Thesis has its own framework of investor protection and professional indemnity cover but Thesis clients do not enjoy the statutory protection of solicitors' clients.

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