Employment primer for in-house counsel

When joining a new business there’s a vast and sensitive range of information around employment that you are expected to address.

If you’re not versed in employment law, how do you set yourself up for success? This resource should help you get started.

This resource focuses on employment law need-to-knows for in-house legal. It should help you understand, as sole counsel or a legal leader in a lean team:

The employment-related tasks that may land in your inbox
The employment-related questions you should be asking

Feel free to copy this and customize with your own notes and additional sections.

1. Firefighting 🔥

These are the employment-related tasks that colleagues may send your way in your first 90 days. If you've been an in-house lawyer for a while, you likely have a ‘spidey sense’ for how to handle these.

Ongoing grievances

Tasks related to ongoing grievances include supporting the HR director in bringing ongoing grievances to a successful conclusion.

For the most part, the People & Talent team will address and resolve these questions. Legal may need to get involved when the grievance leads to a disciplinary process, or indicates that the business might need to rectify an error that has led to this issue - such as direct or indirect discrimination in a policy or process.

To prepare for these situations, you need to know about:

Grievance processes and disciplinaries
Whether the company is breaking an obligation when someone raises an issue
The risk associated with this grievance, and how to mitigate it

Employment contracts

Tasks related to employment contracts include:

Supporting the talent team with questions on employment contracts and in hiring processes.
Reviewing and signing off on HR vendor agreements.
Reviewing and negotiating recruitment agency engagement letters.

Recruitment agency engagement letters can be a little trickier than vendor contracts as there are specific, jurisdictional rules that apply.

You may have to look into regulations to understand the nuances of certain contracts.

Share option plans

Tasks related to share option plans include administering employee share option plans. This also involves navigating board approvals.

Share options are relatively formulaic, but the rules of each plan differ from company to company. This means you can't effectively answer questions about shares until you dedicate time towards reading the company’s policies.

These policies will help you answer questions like: when do I get my share options? How do they vest? When can I exercise them? When can I get my cash?

There’s also plenty of resources, like Practical Law, that can help legal prepare for share-related questions. Equity management platforms, like Ledgy or Capdesk, also have useful reading on the subject.

Terminations

Tasks around terminations may involve supporting the HR team through termination processes of various kinds, such as redundancies or misconduct.

If you have little to no experience in employment law, being thrust into this situation can be difficult. The best way to approach it and ensure you’re dealing with the situation in the most ideal way would be to seek external support. If you join our private community of in-house lawyers, you’ll have access to our curated and crowd-sourced list of counsel and suppliers, as recommended by your peers. You can also grab our contract templates, like this free employment termination agreement template.

2. Strategic projects 🔮

These are the questions you should be asking to better understand the business in your first 90 days.

These will help you map out the strengths and weaknesses legal needs to address, so the business is well set up for due diligence - whether that’s for a future funding round, an IPO, or an acquisition.

Workforce structure

With working-from-anywhere high in demand, it’s important to understand the workforce structure at your business by asking the following questions:

What does the company’s workforce look like? Are you comfortable with the risks inherent in that approach?
Does the company employee all its workers directly, or does it use more complex structures involving contractors or employers-of-record?
Where contractors or employers-of-record are involved, has the company thought about misclassification risk?
Is the company complying with off-payroll working rules?

Employment contracts

Where there’s a business, there’s contracts - these questions can help you better understand employment contracts and company hygiene around them:

Do the company’s employment contract templates present any due diligence red flags?
IP: Do the employment contracts contain an effective assignment of IP rights created by employees in the course of their employment?
Termination: Are there any unusual termination provisions?
Restrictive covenants: Are the restrictive covenants (non-compete, non-solicitation, etc) appropriate and enforceable?
Executive team: Are the employment contracts for the executive team appropriate for employees of their seniority?

Collective representation

Questions that you could ask regarding collective representation are around:

Unions: are there any unions or works councils involved?
Agreements: are there collective agreements that apply to the company’s workforce?

Share option plans

Share option plans are a frequently asked question, particularly at a smaller business. To get the best understanding of share option plans, make sure you ask the following questions:

What share option plans are in place, if any?
Are the rules clearly communicated to workers?
What processes are in place to comply with rules for tax-advantaged schemes (e.g. EMI options)?

Location

If your business operates in several locations, it’s worth getting a handle on location of these employees, and compliance with local rules.

Where is the workforce based?
Does the company comply with all local rules, including by remitting tax and social security payments to the right authorities?
Do workers work remotely, and - if so - on what terms?
Are employment contracts appropriate to the location where workers are based?

Similarly to the location section above, it’s important to understand the policies: Does the company have a complete set of workforce policies, and when were they last reviewed?

Grievances or performance management

Ask the following questions to get an understanding of the processes around grievances or performance management.

Does the company have clear policies for grievances and performance management?
Are these policies followed?

Pensions

When joining a new business, it’s useful to understand::

Whether the company operate a pension scheme
What the risks are (e.g. underfunding)

Employment law advisors

Has the company got the right external advisors in place for its workforce? For this, you’ll need to consider geography, workforce structure and collective representation when deciding the appropriate firm.

Feel free to copy this and customize with your own notes and additional sections.