What digital health start-ups should think about when recruiting staff

When the founders of a new digital or tech health business start to take on staff, it is crucial that they not only get the right employment agreements in place but look carefully at whether there are any current or past contractual obligations and/or restrictions that could impact on their ability to perform as required.

Starting with the basics, employment law in Great Britain specifies the “written particulars” you must give individuals when they start working for you, unless they are genuinely self-employed. These include the obvious – such as details of pay, working hours, holiday and sick pay entitlement and notice periods – as well as matters you may not have thought about at the outset – such as training entitlement, pensions arrangements and details of disciplinary and grievance procedures.

That brings us to broader compliance issues. As well as a number of statutory rights that apply in the workplace (for example the right not to be discriminated against and the right to various types of statutory leave) employers also have a number of broader obligations aimed at protecting their workforce (such as a requirement to have a health and safety policy). These are normally addressed in separate policies, typically collected together into a digital staff handbook, which helps keep both management and workers on the right track.

Written particulars and staff handbooks are both relatively standard documents, and there are a number of ways founders of a new business can get help with this, including through LaunchPad, our legal service designed for early stage technology companies and scale ups.

Once the basics have been covered off, there are some important areas where it is well worth getting customised legal advice. In such a specialist and fast-moving field, both founders and investors will want to be sure that the necessary legal protections have been put in place to shield the growing business from unfair competition.

Here are some of the issues you will need to consider both when it comes to preparing contracts of employment for key staff and when it comes to understanding what restrictions and/or obligations those key staff members may be under from their current/ former employer(s):

  • Restrictive covenants – these legal provisions are the only method of restricting employees from certain activities, for example, competing their former employer. To be enforceable, they need to be carefully tailored, depending on the seniority of the employee concerned and their exact role.
  • “Garden leave” clause – this can be used in conjunction with or as an alternative to restrictive covenants and enables you to require the employee to remain at home during their notice period.
  • Confidentiality clause – important for all staff but particularly for key employees, especially when seeking to protect confidential information after their employment ends.
  • Pay in lieu of notice clause – essential when seeking to rely on restrictive covenants or confidentiality clauses if the employment ends without the full notice period being worked.
  • Intellectual property clause – needed for employees who are likely to invent, design, create technology or make discoveries.

The issues we have addressed apply to employees, and to a lesser extent workers – ie those who have a looser relationship with the business they are working for than employees, but are not self-employed. It is often difficult to tell the difference between these three categories – it would need a separate article to explain why! However, we think it is a fair assumption that your core workforce will be employees, and we have written this article on that basis.

Our content explained

Every piece of content we create is correct on the date it’s published but please don’t rely on it as legal advice. If you’d like to speak to us about your own legal requirements, please contact one of our expert lawyers.

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