Employing staff

There are conventional ways of advertising for staff: advertising in local papers, going through job agencies or placing details in your local job centre. The trouble is they all use up time and money. Not only that but you will end up with lots of applicants most of whom don’t fit your preferred profile.

Assuming you have chosen a reasonably busy location for your sandwich-coffee bar, here’s the Miller’s Six Step Programme for getting the right staff with minimum hassle and virtually no expense.

• Print three copies of a sign advertising the job, including the hours to be worked. Do this on your computer or using a stencil set, but make it look professional.
• Put one copy on prominent display inside the shop and the other two in the front window.
• Prepare a questionnaire (which can of course be stored in your computer) to hand out to people who come in enquiring about the job. The questions should seek to elicit the basic information which you regard as most important. I have included a copy of our own questionnaire. Applicants should be encouraged to fill in the form in the shop. This enables the existing staff to observe them and form a first impression. This impression should be noted on the questionnaire.
• At your leisure look through the forms. You will be surprised how much of a feel you can get for a person from a spontaneously filled in form. Select those who seem most suitable.
• Arrange interviews as soon as possible. People looking for this kind of work really need the money and will often take the first decent job offer they get.
• Be prepared to make an instant decision after interviewing applicants. Again this is because they will usually want to be earning money as soon as possible and the best people are invariably snapped up quickly.

In seven years we have found this system to be virtually foolproof. It has the added advantage that prospective employees get the chance to look at us – so if they don’t fancy working in our kind of place they’ll just walk on by. Occasionally there are times when not so many people are looking for work so the choice is limited. At other times we have taken someone on within a few hours of putting the signs up.

With regard to our questionnaire, a few comments:

Are you a vegetarian?

I’ve nothing against vegetarians but if they are going to find it difficult to handle meat, cut off fat or gristle and so on, then working in a (non-vegetarian) sandwich-coffee bar might present problems all round. Clearly this is something which should be raised at interview.

For how long are you looking for employment?

Prospective staff are notorious for saying what they think you want to hear. Whatever they say it’s not a guarantee of anything but it is good to know what they have in mind. If the reply is three months or less you have to ask yourself whether it is worth training somebody for such a short time. Then again, if they’re good and you need cover for the summer it might be worth it, and people’s plans can change.

Is there anyone we can contact for a reference?

Prospective staff will often bring a written reference or testimonial to the interview with details of a contact name. Speaking to someone for whom the person has worked is potentially valuable and if possible you should do this. But do it by phone. Remember the time factor. Not everybody is able to provide the name of a referee. If you think they fit the bill don’t be put off by this. Your assessment is the most important thing by far.

One of the best people we have ever employed applied to work for us within hours of arriving from Australia. She had no references and her address was a backpackers’ hostel which she had not yet checked into.

New staff

Don’t drop a new employee in at the deep end. You have to take time to train them to do things your way and also train them in matters of food hygiene and health and safety (see Chapter Nine). There’s no rocket science involved but working efficiently in a sandwich bar involves working around other people and carrying out a lot of simple functions quickly, often under pressure. Training is best achieved by having new staff work under close supervision for a few hours each day for, say, three days. During this time they should get the chance to observe and carry out all the main aspects of the job. They should not be expected to work at lunchtime initially.

Of course, you may be lucky and get someone who has a lot of experience, in which case the amount of time spent training them can be reduced. There are clear advantages in taking on people with catering experience or training. However, don’t disregard those who don’t have any experience. If people have enthusiasm, an outgoing personality and a genuine interest in food – based preferably on having been brought up in a house where there was a wide variety of good food properly cooked – then you might well find they will make very good employees indeed.

A word about sandwich-coffee bar staff

Working in a sandwich-coffee bar is not a career or a vocation. It is never particularly well paid. Whilst you are entitled to expect hard work and a degree of commitment from your staff, the fact is that many of them are probably only working for you before going to university or college or as a way of financing their travels. You must be realistic about this.

When we started my wife became upset when people, who appeared to like working for us, would come in one day and give a week’s notice. I think the mistake she made was to expect that staff would or should share her commitment to the project.

You may find that the work will suit a more mature person quite well; perhaps someone returning to work after having children who is looking for long-term part-time work. Such people may be prepared to make a longer term commitment and become very valuable members of your little team.

Employment law

There have been a number of significant additions to the laws affecting employees since 1997. Many of these changes have had the greatest impact on small businesses.

The first point to understand is that the great majority of the new provisions affect all businesses regardless of size. Not long ago I had a conversation with the proprietor of a small sandwich bar who expressed the view that the rules on holiday pay did not apply to him because his business was so small and because the people who worked for him were all part-timers. Wrong on both counts.

With few exceptions, the size of the business is irrelevant. And there is now no distinction between part-time and full-time workers – both groups benefit from the new provisions.

The other important point is that over many years the emphasis has increasingly come to be on fairness and transparency when dealing with employees. It is a philosophy that makes sense. If people feel that their terms of employment are reasonable and clearly understood from the outset they will tend to be happier in their work – and more productive from the employer’s point of view.

Let’s consider some of the most important points which will affect you in more detail.

Minimum wage

You are legally obliged to pay your staff no less than the applicable minimum wage. The current rates are:

Development rate (18-21 years old): £4.25 per hour. (£4.45 from October 2006.)

Adult rate (22 years and over): £5.05 per hour. (£5.35 from October 2006.)

The figures for October 2007 are said to be ‘subject to economic conditions at the time.’

For further information you can obtain a booklet called ‘A Detailed Guide To The National Minimum Wage’ by phoning 0845 8450 360.

Paid holiday

All staff are entitled to paid holiday up to a maximum of four weeks per year. There is no qualifying period. So for instance, if someone has worked for you for six months they will be entitled to two weeks’ holiday pay when they head off to the sun.

Bear in mind though that ‘a week’ equates to the length of week a particular employee works. If someone does a five-day week then he or she is entitled to 20 days’ holiday per annum. If he or she is a part-timer who does three days a week then the entitlement would be 12 days.

The holiday entitlement is not additional to bank holidays – there is in fact no statutory right to take bank or similar holidays off. Surprisingly enough this even applies to Christmas Day!

An employee is not entitled as of right to take holidays on a particular date – but hopefully this will be a matter discussed and agreed well in advance. You on the other hand, are entitled to insist that holidays be taken at particular times. For instance, you may wish to close the shop in August to coincide with school holidays. This is your privilege and you are entitled to insist that staff holidays be taken at this time. Again, you should make this clear as early as possible, preferably at interview.

Contracts and written particulars of employment

A contract of employment exists as soon as an employee starts working for you, thus demonstrating that they accept the terms discussed when you offered them the job. However, in addition, employees who work for you for four weeks or more are entitled to receive a written statement of employment particulars within two months of commencing work. You may have particular matters you want to deal with in the statement, but the main terms to be included are:

• The names of the employer and employee
• The date when the employment (and the period of continuous employment) began
• Remuneration and the intervals at which it is to be paid
• Hours of work
• Holiday entitlement
• Entitlement to sick leave including any entitlement to sick pay
• The entitlement of employer and employee to notice of termination
• Job title or a brief job description
• Where it is not permanent, the period for which the employment is expected to continue or, if it is for a fixed term, the date when it is to end
• A note giving certain details of the employer’s disciplinary and grievance procedures
• Any pensions or pension schemes.

Maternity leave

A female employee is entitled to a period of 18 weeks’ ordinary maternity leave regardless of her length of service. The employee has to tell her employer that she is pregnant at least 21 days before she wants the leave to start, which can normally be any time from the eleventh week before the expected date of confinement up to the birth itself.

You do not have to pay the woman during the 18 weeks but at the end of the period she is entitled to return to her original job. Clearly this could create real problems for the small business.

The government has indicated an intention to introduce a right to paternity leave, possibly for two weeks, but at the time of writing there are no hard and fast proposals to report.

Statutory sick pay

If a member of staff is off sick for four or more days you will become liable for statutory sick pay. The current rate is £62.20 per week for employees between 16 and 65 years whose earnings exceed £72 per week. You are not required to pay SSP for the first three days off. The payment of SSP continues for a maximum of 28 weeks after which time the employee can make a claim for incapacity benefit from the DSS. Within seven days of the first day of sickness the employee should complete a self-certification form regarding his or her situation. The form, SC2, is downloadable from the Internet. You can also require the employee to provide a medical certificate if you wish.

The good news for small employers is that most of the money paid out can be reclaimed from the government. It depends on the amount of National Insurance you pay. Take an example: if you pay out four weeks’ SSP (£248.40) and in that particular month your NI liability amounts to, say, £100 then you can reclaim £248.40 less 13% of £100 (£13), i.e. £235.40. You get it back by means of a deduction from your next payment of tax and NI on behalf of your employees.

This is probably not something you will have to do very often and the rules do change from time to time, so I suggest that as soon as any such situation arises you make contact with the Employers Helpline – 08457 143 143 – they will guide you through the procedure.

The helpline is also able to assist with a wide variety of issues relating to staff such as stakeholder pensions, maternity leave and so on.

Stakeholder pensions

If you employ five or more people then you are required to set up a stakeholder pension scheme to which your employees can contribute if they wish. The employees are responsible for any such contributions, you only have to provide the scheme. Clearly you will require professional assistance from an insurance expert.

To help the industry to meet this requirement a new scheme has been launched called The Food and Hospitality Industry Pension Scheme. It is supported by the British Sandwich Association and other trade bodies. It is said to be highly competitive costwise. It is administered by one of the country’s largest independent brokers and run by a major life assurance company.

Dismissal of staff

If you dismiss someone you have employed for a continuous period of one year or more they have the right to make a claim against you at an industrial tribunal if they think the dismissal was unfair. If you do find yourself in the situation of wanting to dismiss someone you must act fairly. The law recognises five areas which can give rise to fair dismissal:

• A reason related to the employee’s capability or qualification for the job
• A reason related to the employee’s conduct
• Redundancy – broadly this is where the employer’s need for employees to do certain work has ceased or diminished or is expected to do so
• A statutory restriction preventing continuation of the employment
• Some other substantial reason which could justify dismissal.

At all times the question will be whether you treated the employee reasonably in the circumstances. Don’t act without warning. Tell people what they are doing wrong and give them a chance to improve. If problems persist then it is important to give written warnings before finally deciding to dismiss someone. It is regarded as desirable that employees who are at risk of being dismissed are able to meet with their employer to discuss the situation in the company of a representative – a friend or adviser.

Anyone who has ever run a small business will tell you how difficult such strictures can be. The chances are you work at very close quarters with two or three staff in one shop. Written warnings and grievance procedures – perfectly feasible in large multi-layered organisations – will be largely impractical. However, if you do run into problems the question you have to ask yourself as you try to deal with the situation is: if the employee makes a claim against me, what will an industrial tribunal make of the way I handled it?

These situations are mercifully rare. The main thing is to get the right staff in the first place.

The other extremely important thing is to respond quickly if you experience problems with staff. Don’t let problems fester. This is particularly relevant in the days after you take someone new on. You generally know quite quickly whether a new employee is going to work out. If, after a week or so, you are pretty sure that they are not suitable it’s far better to terminate their employment right away. Don’t put up with things because you you can’t face telling someone they’re not right for the job. If you do, you are just storing up problems for the future.

If you do decide to dismiss an employee you must give certain minimum periods of notice. These vary according to the length of time the employee has worked for you:

• between four weeks and two years: one week
• two years: two weeks
• for each extra year: add an extra week up to a maximum of twelve weeks.

If someone is guilty of gross misconduct then you can dismiss them on the spot. This applies to being caught stealing for instance, though you are still supposed to listen to their side of the story before taking action.

If you take someone on and it doesn’t work out and they have worked for you for less than four weeks you should give them reasonable notice. This could be a day or two or possibly just the rest of the afternoon. In such situations the employee concerned might well not want to hang around.

In general, dismissal is a matter you should consider seriously. The upper limit for awards at industrial tribunals has increased dramatically in recent times and is currently £50,000, though such awards are highly exceptional.

For employees the requirements are less onerous. An employee has to give at least one week’s notice if employed continuously for a month or more, but this period is unaffected by length of service.

The one year qualifying period for unfair dismissal claims does not apply in the cases where dismissal takes place on grounds related to:

• sex
• race
• disability
• a complaint about a breach of an employee’s statutory rights

In these cases there is no qualifying period at all.

Employment rights on the transfer of undertakings

In other words, what happens when you take over a going concern which employs one or more members of staff The relevant regulations apply specifically ‘where all or part of a sole trader’s business or partnership is sold or otherwise transferred’. The new employer takes over the contracts of employment of all employees who were employed immediately before the transfer ‘or who would have been if they had not been unfairly dismissed for a reason connected with the transfer’. These words are taken from a legal judgement on this issue. The effect is that an employer cannot just pick and choose which employees to take on.

It follows that when a business is sold, staff cannot be dismissed simply because of the sale unless there is some justification. This could be ‘economic, technical or organisational’. So for instance, if the previous business employed three people but you are sure you only need two then you may be able to dismiss one, but you would need to be able to justify this – perhaps because you intend to spend more time in the shop than the previous owner.

The staff you inherit have exactly the same rights with you as they did with the previous owner of the business. If there is a fundamental change for the worse in their conditions this could well give them the right to terminate their employment and make a claim for unfair ‘constructive’ dismissal. Even if the dismissal of staff is regarded as reasonable they may be entitled to a redundancy payment.

As you can see, taking over a going concern is not without its problems.

Remember also that if you become a member of the Federation of Small Businesses they have solicitors on call who can also give you up-to-date information – though rather than have a general chat about the state of current employment law their brief is to deal with specific queries about problems you encounter. A valuable service. Every local FSB branch arranges regular talks on current issues affecting small businesses, and you get the chance to question experts about your particular concerns. There is also a regular magazine which contains articles on small business matters – often before they are widely known. Forewarned is forearmed.

General inquiries will also be dealt with by either your local Jobcentre or ACAS (Advisory, Conciliation and Arbitration Service) – see your local phone book for details.

Up to this point I’ve talked about legal matters. I now want to discuss two points which you won’t find in any Act of Parliament but which I believe are highly relevant to the successful running of a sandwich-coffee bar: the staff handbook and staff meetings.

Staff handbook

I can hear the groans already: ‘I want to sell sandwiches and coffee, not a write a book’. This would have been my view too before we opened our first shop – but not now.

When you plan your business you build up in your mind a vision of how you want it to be. You make lots of assumptions about numerous things. When you interview a prospective employee you will get over some of this vision – but only some. When, a week after they start, you arrive at the shop to find them standing outside the shop smoking a cigarette you are annoyed and flustered. ‘We don’t do that sort of thing here’ you think and perhaps say. But did you make this absolutely clear at interview? No, you forgot that particular point. So you have to make it clear now, when the employee has spent a week thinking something else – so they are not greatly pleased either.

A staff handbook should contain your vision and your particular policies on a wide range of issues. It is also a great opportunity to spell out in detail the importance of particular matters ranging from personal hygiene to what to do if there is an accident – which are legal requirements. In other words, it can also help you to ensure that as far as possible your employees comply with relevant laws. See pages 208-11 for an extract from our staff handbook.

A staff handbook should be given to someone when you take them on. Ideally they should have a day or two in which to read it before starting work. Make sure you ask them if they have read it when they come to work on the first day and give them the opportunity to ask questions or seek clarification about any points.

A staff handbook can be quite light-hearted at times, more businesslike at others. There really are no hard and fast rules – you should include those things that are important to you.

So what are the kinds of things which you should consider including in your staff handbook? The things which you regard as important for delivering your vision and also the efficient day-to-day running of the shop. Many things will have been explained during the interview and initial training but the handbook acts as a good aide-memoire throughout a person’s period of employment with you.

• Specific duties: it is important that people understand what it is they are expected to do. You won’t have time to spell out every last thing at interview.
• Dress code and personal hygiene: to include such things as not wearing strong smelling perfume or bracelets, washing hands regularly and having long hair properly tied back at all times.
• Time-keeping: so important – you really need to get going first thing in the morning. Lateness by one member of staff puts extra pressure on the others. We tell people to arrive five minutes before their start time so that they are actually ready to start work at 8.00 not ready to start getting ready for work.
• Dealing with customers: always being polite and attentive. What to do if someone is dissatisfied with something. What to do if a customer is drunk or offensive. Fortunately these things are very rare but staff, particularly younger staff, should be given some guidance on such matters.
• Smoking: in the present climate smoking on the premises for staff or customers is unthinkable. A good rule you might say – but only if it’s enforced. Staff have to be told that they should enforce the policy politely but firmly – it’s only fair to the vast majority of people who observe the rule. A more difficult one is staff wanting to smoke outside the front of the shop. I regard it as unacceptable. It creates a bad image and inevitably the smell of tobacco accompanies people back into the shop. So how are you going to deal with it? It’s up to you!
• Moodiness: this is a really difficult one. We all of us have days when we have a lot on our minds, when we really don’t feel much like being outgoing. You have to accept that staff will on occasion be a little under par. However, some people go beyond this – and you cannot afford to put up with it in a small sandwich-coffee bar. A bad atmosphere is created which affects staff and customers alike.

We once had an employee who could be pleasant and chatty and then come in the next day miserable and withdrawn; questions would be met with monosyllabic replies. It was hell. The trouble was she was well able to do the job. Frankly the situation would have been much easier to deal with if she hadn’t been. Eventually we did dismiss her. She was completely taken aback. I wrote to her explaining the difficulties she caused. I hope she learned something from the experience. I would not have liked to have defended that one in an industrial tribunal.

• Procedure following an accident: who to notify, whether it might in some circumstances be appropriate to close the shop.
• Cheques: the correct procedure to be followed if somebody pays by cheque.
• Dogs: with the exception of guide dogs you should not allow dogs in the shop. Apart from the obvious breach of hygiene a badly behaved dog could make a considerable nuisance of itself in a busy lunchtime queue.
• Music/tv/radio: the real question here is who are these things for? Many owners of businesses would say the customers, but a lot of people working in shops would say the staff. It really is your choice but my view is that there is a balance to be struck which aims to please (which is different from not to offend) everybody. However, I am in no doubt that what is paramount is the atmosphere which is created in the shop.

Imagine this: you allow the staff to choose the kind of music which is played. Let’s say you have a fairly high turnover of staff – not uncommon with sandwich bars. This means that a regular customer might get The Beatles one week, Eminem the next and Miles Davis the one after that.

I think this is a bad idea. I believe that the boss has to exercise editorial control over the musical output – to ensure that whatever music is played fits in with their vision. What you are selling to the customer is not just a good sandwich but also an image and an ambience. And no matter how good the music, the volume should always be at an appropriate level.

If you do play recorded music (tapes, CDs) in the shop (and you’ll be pretty unusual if you don’t) you’ll need two licences. These should be obtained, along with further information, from: Phonographic Performance Ltd, 1 Upper James Street, London W1F 9DE Tel: 020 7534 1000. Fax: 020 7534 1111. www.ppluk.com

The PPL represents the interests of recording companies who assign their copyright to the PPL. For a unit of 500 square metres the current annual cost is about £100.

You also need a licence from another organisation which deals specifically with the interests of the artists. (If you only play a radio then you will only need this second licence.) The Performing Rights Society, 29/33 Berners Street, London. WIP 4AA Tel: 020 7580 5544. Licensing hotline: 0800 0684828. www.prs.co.uk

The cost of the PRS licence will be similar to that for PPL.

If you intend to have a TV in the shop or indeed a TV-enabled computer (a PC with a broadcast card) or TV receiving equipment which is capable of receiving TV programmes you will need a TV licence. One licence covers any number of sets on one site. You do not need a licence if a TV set cannot receive programmes and is only used for closed circuit monitoring, or for showing pre-recorded videos or as a monitor for a computer.

• Procedure for making a sandwich to order: all the questions to ask in the correct order (type of bread, butter/margarine/salt/pepper, etc).
• Portion control: large sandwich manufacturing factories can churn out thousands of identical portion controlled sandwiches every day. With small independents it’s not an exact science. The aim should be to arrive at a balance which is fair to the customer and fair to the business. Make clear the way you want it done during initial training.
• Procedures for particular kinds of food:
  • cutting fat off smoked turkey
  • not cutting open avocados which aren’t ready
  • an indication of the quantities which should go into each sandwich
  • defrosting prawns.

Staff meetings

In a small shop unit you might say there are numerous opportunities for discussion about anything and everything. This is true up to a point. However, you are likely to be interrupted all the time. If it is a matter of a personal nature or any degree of controversy, then discussing it during working hours with customers around is not appropriate.

Staff meetings are particularly desirable if you have new staff. You’ve given them a staff handbook and they’ve done their initial period of training but inevitably questions will arise – or it will be obvious that they are doing some things wrongly. A brief meeting held after the shop has closed provides the appropriate forum to discuss such matters.

Such meetings are good for experienced staff too. They provide an opportunity to discuss matters beyond the basics: why things are going well, why they’re not, new customer preferences and so on. This can provide very valuable feedback from the people who work at the coalface.

They also give staff the opportunity to raise matters of concern to them. In such situations try to make it as easy as possible for people to talk freely; there is absolutely nothing to be gained from having some source of irritation or frustration festering below the surface.

It is not necessary to have meetings at set intervals. You could end up looking for things to say. I think it is for you as director of the show to sense when a meeting would be a good idea. Staff should be made aware in the handbook that you have staff meetings from time to time and that they can request one if they have an issue they wish to discuss.

Employing a manager

For a small independent operation starting up, it would be surprising if the initial turnover could justify the cost of a manager. Further, such a person might have different ideas from you and immediately there could be conflict. It would, of course, be appealing to have somebody else take the strain in the shop thus freeing you up to attend to many other jobs such as going to the cash and carry, book-keeping or making soup. However, at the outset it is best for you to be involved hands-on in the shop most of the time. It means that you are there to make spot decisions and iron out problems.

If you do decide to have a manager later on the best way to achieve this is by internal promotion. You know them, they know you – and how you want things done.

I have known a couple of sandwich bar owners who have taken people on as managers (not by internal promotion) to reduce their workload and also to try to increase turnover. What happened was that their wage bill went up a lot but their turnover stayed about the same.

You really have to ask yourself if you need a manager. Assuming you are in the shop a lot and that you are taking responsibility for all important decisions, are you sure you want to pay somebody extra for taking on a few extra responsibilities? The important questions are:

• will it improve the quality of your life?
• will you still make enough money for yourself?

If the answer to both questions is in the affirmative then it may well work for you, but internal promotion will invariably be best.

If you decide to expand your empire by opening a second outlet then, of course, the arguments in favour of having a manager in one of the shops will become much more powerful. This subject is further explored in Chapter Eleven.