Basing its conclusions on calls to its business support helpline, Croner believes that that widespread ignorance of employment law could result in costly legal repercussions at the hands of litigious employees.

‘The “management myths” we have identified are commonplace in business practice, but in actual fact are little more than old wives’ tales,’ explains Alan Phillips, employment manager of the Business Support Helpline at Croner. ‘While many business owners often remark on the cost and time involved in complying with complicated red tape, it’s actually the most basic employment principles that are tripping them up.’

Croner reveals the top five myths and the truth behind them:

1. “Smaller firms are exempt from paying staff the national minimum wage”
HM Revenue and Customs recently reported this as one of the top excuses of companies not paying the minimum wage. However, the national minimum wage must be paid to all employees, regardless of the size of the company. Enforcement teams are in place to identify companies not meeting these regulations.

2. “A monthly paid employee’s period of notice is one month”
This is a widely held misconception. The minimum legal notice period after one month is one week per year of service, to a maximum of twelve weeks. This is irrespective of how frequently someone is paid, but could be longer for more senior staff.

3. “There is no contract of employment as there is nothing in writing”
A contract does not have to be written down and can take the form of a verbal agreement, after which the employer is legally required to honour certain employment rights.

4. “An employer can sack someone on the spot without following any form of procedure providing the employee is guilty of gross misconduct”
This is highly risky, leaving the employer open to an unfair dismissal claim. A full disciplinary procedure should be followed and workers should be given an opportunity to explain themselves at a properly conducted meeting before decisions are made.

5. “An employee with less than one year’s service can be dismissed for any reason”
It is true that an employee with less than a year’s service has fewer employment rights than someone who has a year’s service or more. However, there are over 20 grounds where an unfair dismissal complaint can come from an employee with under one year’s service.