Staff issues with running your first salon
Even in the difficult current economic climate; salons continue to open across the country. But what issues do the owners face and what legal issues should you consider if you are considering opening your first salon business?
David Wright, who advise Habia and a range of salons, gives his advice on some of the pitfulls to look out for.
A salon in my neighbourhood is for sale as the owner is retiring. It has an established turnover but I think modernisation will increase turnover further. However, there are a number of long-serving staff. What are the issues with them?
Obviously, you are looking at the profitability and performance of the salon, which is exactly right. However, you need to be aware that, in law, the staff automatically transfer to you. Their existing pay and terms and conditions are all protected. The law covering this is called TUPE.
If you pursue your interest you should ensure you obtain a copy of the employees' contracts and details of other terms and conditions to enable you to effectively assess your potential wage bill.
I am buying a small salon that I intend to manage, but there is already a manager there. What can I do?
The question concerns all the staff transfer to you. Potentially, it is possible to dismiss the current manager on the grounds of redundancy. Post TUPE dismissals are permissible for 'economic, technical, or organisational' reasons.
In your case this would be an 'organisational' reason, ie you potentially have two managers. There would be a need for a consultative process and there might be a possibility of redeploying the manager to a stylist's post.
You have to consider the income the current manager generates and bear in mind that the manager would be entitled to notice and a redundancy payment. There are lots of potential pitfalls and I recommend you obtain professional advice.
I have just bought a salon and while looking through the staff files noticed one has a final written warning for persistent absenteeism. Since I took over she has had three absences, what can I do?
The good news is that the staff transfer under TUPE. This also means that the disciplinary procedures transfer, as does the final written warning.
Providing the warning is still 'live' - the disciplinary procedure will indicate how long the warning will last - you could take further action that could reasonably result in dismissal.
I have just discovered that one of the staff in my new salon has a claim against the business following an accident at work. However, the accident occurred months before I purchased it, am I liable?
Yes; as indicated above, the staff transfer to you with all their rights. As the new owner any liabilities transfer to you.
When purchasing a salon it is imperative you obtain written confirmation of the pay and conditions enjoyed by the staff. In addition, you should specifically ask for details of any outstanding claims against the business. If the previous owner had then failed to disclose the claim, you would be protected.
When I purchased the salon I saw three stylists and an apprentice. Three months on I have been contacted by a stylist indicating she is able to return from maternity leave. Do I have to agree and could I make her redundant?
You have no option but to allow the employee to return. If you make her redundant you would almost certainly lose the case at an employment tribunal on the grounds of sex discrimination, as the dismissal would relate to her pregnancy.
Potentially, there might be a redundancy situation, but all four stylists would be in the pool for selection and you would need objective criteria for the selection.
I am buying a new unit to open as a salon. I have selected my product range and equipment but need to find two or three staff. Do you have any tips?
I could write pages on this. Remember at the end of the day it is the quality of the staff that determine your success. I have two main tips:
- Have a thorough selection process not just a chat and a trade test. As it may be difficult to predict demand, make sure you build in as much flexibility as possible when agreeing the hours with new appointees.
- Make sure you have a contract and policies in place before you recruit to ensure you utilise your staff in the most flexible and cost-effective way.
More of David Wright's Legal Advice For Salon Owners