Case Study - Verbal Contracts

This is a case study about a local Shropshire company and how Kay Heald helped them to not only meet their legal obligations, by turning verbal contracts into written contracts, but improve their employment relations and internal communications.

The Client

The Company is a well-regarded local family business, trading for over 20 years, employing both family and non-family members of staff.

The Issue 

Although the business was doing reasonably well, the owner manager was starting to think about the future and whether he wanted to pass on the business to another family member, or consider selling it.

As he started to consider his options, he realised that very few of the Company’s processes were actually written down and most employment procedures had never been agreed and formalised. Only a few employees, who had been recruited in the last couple of years, had their terms and conditions in writing, so most staff were working to verbal contracts.

The Solution

After meeting with the owner manager, Kay Heald was able to learn more about the Company, its future business plans and its general approach to people management, as well as find out about existing terms and conditions and custom and practice. She was then able to advise on which processes needed to be formalised and documented to ensure the Company met statutory UK employment legislation and identify further areas that would help provide more protection for the Company and its employees, particularly if the business was sold.

Kay worked closely with the owner manager to capture existing terms and conditions and turn the verbal contracts into a set of written contracts and draft suitable HR procedures to supplement the contracts of employment. She also helped organise a series of staff meetings at which the owner manager was able to explain the reasons for introducing written contracts and formalised procedures and then run a question and answer session to address any concerns raised by employees.

The Outcome

New written contracts, which reflected existing terms and conditions of the verbal contracts, were successfully introduced and signed by all staff. The owner manager is currently using staff meetings with question and answer sessions to help improve other areas of the business including health and safety and quality management. Employees have responded well to the Company’s more open methods of communication and more people are now contributing ideas and suggestions for further improvements to the business.

If you found this article useful, you may also be interested in: Aren’t You Retiring Yet? and Family Business Charter

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