Employee Contract

[Green Pro Clean Ltd]

for your first employee there are many circumstances where you will need to put someone on a 0 hour contract

If that's how you feel honestly you aren't ready to employ.  

You know I follow the work smart and not hard rule but believe me I worked myself in to the ground to be ready to take on an employee , almost literally. 

If you're leaving the house before your kids go to school and getting home after they been put to bed (and I don't mean your teenagers) the you are about ready to figure out that you need help in the day to day and need to figure out how you're going to employ.  

If you're stressed cause you get to fist job at 9.30am and done by 2pm and you're having to do a whole 4 days a week then honestly don't even comment. 

As above, some want to build companies, others simply want a tidy round to take of them.  Either is fine and each one wont suit every one.   

 

[Part Timer]

Bed time for me, I'm starting to agree to much with @Green Pro Clean Ltd

 

[Green Pro Clean Ltd]

Bed time for me, I'm starting to agree to much with @Green Pro Clean Ltd

Subconsciously you always have, it's just more fun to convince yourself you don't!  But as I'm ALWAYS right what choice do you have?  ? 

 

[Part Timer]

Subconsciously you always have, it's just more fun to convince yourself you don't!  But as I'm ALWAYS right what choice do you have?  ? 

Fairly certain I was the only one, and took plenty of abuse, that has always said that to get good staff you have to pay them accordingly. Glad you finally listened and are doing well because you did so ?

 

[P4dstar]

If that's how you feel honestly you aren't ready to employ.  

You know I follow the work smart and not hard rule but believe me I worked myself in to the ground to be ready to take on an employee , almost literally. 

If you're leaving the house before your kids go to school and getting home after they been put to bed (and I don't mean your teenagers) the you are about ready to figure out that you need help in the day to day and need to figure out how you're going to employ.  

If you're stressed cause you get to fist job at 9.30am and done by 2pm and you're having to do a whole 4 days a week then honestly don't even comment. 

As above, some want to build companies, others simply want a tidy round to take of them.  Either is fine and each one wont suit every one.   

On a personal level i'm 100% in agreement with you. I am over half way to full and I have a plan to employ a permanent member of staff, none of this self employed or 0 hour b*llocks.

I do think some lads that want to employ won't be able to or simply won't want to get to the level you and many others got to before they do it. I just hope that if they do decide to go ahead with employing someone on a 0 hour contract it's on a short term basis with the aim to giving them a full time permanent contract as soon as possible.

While we're here debating over 0 hour contracts and self employed people lets remember there are still plenty of lads out there being paid 'cash in hand' with no protection, no employee benefits.... 0 hour contracts ain't great but at least the lads considering them are actually gonna give a contract.

 

[Green Pro Clean Ltd]

Fairly certain I was the only one, and took plenty of abuse, that has always said that to get good staff you have to pay them accordingly. Glad you finally listened and are doing well because you did so ?

I've always agreed with decent pay and conditions, but like many starting without resources it takes some graft to position yourself to be able to do so.  

0 hour contracts ain't great but at least the lads considering them are actually gonna give a contract.

Think about that sentence mate.  A contract that guarantees you NOTHING is better than no contract?   You want to stand by that?

 

[P4dstar]

Think about that sentence mate.  A contract that guarantees you NOTHING is better than no contract?   You want to stand by that?

Haha ??? Yeah. A bad contract is better than no contract man.... I'm with you though, should something better come along people will be off sharpish.

I used to go out with a girl in Cheltenham who's brother worked for a trad windy, had done for 2 years, this was back in 2010. Cash in hand, came away with 50% of the takings and did all the work. Works for him because he claimed his benefits and went out up the ladder, i'd rather see 0 hour contracts than things like that going on.

But anyway, this is all irrelevant. I'm just chatting ? about points of view I don't care about. I'm of the same point of view as you and @Part Timer only difference is I don't want to condemn people who want to give out 0 hour contracts or employ people self employed. Don't want to sit on that side of the fence but live and let live!

 

[Cleanco]

I happen to have met Charlie Mullins through my best mate whom is also a London based plumber (does not work for Charlie but in same circles)  

Charlie is a shrewd 'del boy' character that will duck the system wherever possible, the fact that the court found against him shows that what he is doing is not generally agreeable with common legal practices.  The fact he got dragged to court was because although he had given loads of work to someone 'self employed' when that 'self employed' person all of a sudden did not find things going his way he started to cry and shout about it, pretty much biting the hand that fed him. 

Now before I carry on I will say that I feel qualified to comment on this as I am an employer and as well as employees (full time on the books) I also have part time staff (on the books) and subcontractors I can call on and franchisees so I have spent considerable time and and effort researching the subject, hiring accountants and engaging lawyers to draft contracts etc

However having said that I have no intention of discussing the law of the matter but more the moral and ethical side of the matter. 

• Would you go to work for a 'Zero Hours Contract'  No guarantee of any work this week however if I feel like throwing you a bone you have to come running at my beck and call failure to do so will see you in breach of your contract and (although not legal) treated unfavorably regarding hours in the future?
  
  You Wouldn't go to work under such conditions so why expect someone else to do so? 
   
  
• With all the information available on government websites and helplines it is really not difficult at all to work out someones PAYE (even easier if like us you let the accountant deal with it). Are you really so lazy that you'd rather spend your time watching East Enders than putting in an hour a week to sort out the Tax and NI of one of our most valuable assets?
   
  
• You're going to advertise for someone that has all their own gear, van and knowledge of how to do the job and keep your customers happy.   This person is obviously no catch as they have 'All the gear and no idea'  or they have exactly one idea -- nick your client base!  Regardless of your 'agreement' because if you're too lazy to deal with their tax and NI then I will bet a bottle of Johnny Blue you never bothered to consult and contract and Lawyer to draft you a contract. 
   
  
• You expect them to turn in every day as long as the weather is OK for work but be happy with not earning anything if the weather is a bit rough and they cant get out today.  I'll tell you exactly what they're doing the first day they realise there's no money coming in.... looking elsewhere for another job!  
  

Our employees are all on the books, all on full time contracts, all on a guaranteed 35 hour week, £8 per hour. £5 per day for every job list completed complaint free, £10 per day for every job sheet completed above a certain monetary value (No I wont tell you their targets) £10 for each new 'walk up' customer they sign up and £10 per week for keeping the van clean and 5.6 week paid holiday per year.  

I have one lad making an average of £150 in bonus alone each week but guess what?  I'm earning more thanks to the effort he puts in day in day out.  (Yes for those doing the math he's taking best part of £1800 gross pay per month) They make decent enough money each month that they are happy and I get to retain motivated, quality ASSETS! 

If we have a run of weather that is too bad to work then I'll just take it on the chin and they'll still get their basic pay, it's not their fault mother nature is a fickle mistress. 

It wasn't until I realized the value of quality employees treated right by a business that I really started to grow.  Thanks to an understanding of hiring the right people we will treble what we did last year. 

This has all helped with a couple of things.  1: I get to spend my time working on the business and not for the business, I haven't actually cleaned a window in nearly 3 months.  2: It has made us an actual business. What I mean by this is I could sell my business tomorrow as a working asset where a new owner could walk in and take over and due to the staff it will continue to run as smoothly for them without me here.  That's a real asset.  If I had carried on just looking for casual help, 'self employed' subs, zero hours grunts the sole value of the business would be the round and tools, same as if I had just stayed on the tools. 

Many out there don't want to be an employer and simply want to have a good round and in my book there is not a thing wrong with that but if you are at a stage where you are thinking you need to hire due to work-load but don't want the responsibilities of being an employer then start by culling the dregs of your round, have a price rise to drop a few whilst earning more or sell off a portion but don't mess others about with nonsense like zero hours and 'self employed' subbing etc I personally feel it's a little disrespectful.  

Now I know there's going to be a whole slew of 'Yeah well you know nothing, my mates dads auntie bangs this bloke that plays golf with a fellow who says......' and the likes but remember, above is simply what I think and how I operate.  Nothing more.  I have no special skills and in fact except for Rope Access, Driving Licence and Rescue Diver I don't have a single qualification to my, no GCSE not even a CSE wouldn't know what a BTEC was is you slapped me in the face with one.  What I do have though is the time and patience to learn and a willingness to do it as well as I can so please believe me (if you bothered to read this far) if I can do it anyone can! 

I'll leave this with one final comment.  I have always paid people smarter (more interested) than me to do the things I don't want to / like to do.  Accounts / Web Development / Contracts etc. Makes life a hell of a lot easier

Great insight that my friend, you clearly know your stuff. That Charlie guy did come across a bit like that on tv but I suppose you don’t get to were he’s got from being nice. Your right, I think the self employed route can work but can go drastically wrong when the worker decides he/she doesn’t like it and changes their mind about the situation. One thing I can say though is that I used to work on a zero hours contract around fifteen years ago before I started for myself and I was very happy. I was on a bit more than 1800 a month though and for a twenty year old lad fifteen years ago I thought that was good goin. 

 

[Cleanco]

On another note if you don’t mind me asking  @Green Pro Clean Ltd how much profit do you expect to yield from each van in a multiple van operation based on one man per van these days?  I’m not expecting you to discuss your exact financial business aspects as I most certainly wouldnt on an open forum but just a rough guide as I looked into this a good few years back and went through a few figures with my accountant and we worked out that with all the extra expenses it brings also including lockups, a yard, admin staff and premises/office etc I’d need at least 10 vans out there before I could see a financial gain compared to what I was achieving on my own as a sole trader. I know once that barrier has been broken the world is your oyster but I didn’t want to be stuck with all the stress of running a big business for not much extra financial gain which is why we are all in this job. I’m also guessing that it’s not just a case of, get a few vans on the road and watch the money come rolling in. I bet once your at a certain size there’s more work to do off the tools than when you was on them. 

 

[Iron Giant]

Down south you'll get it easier though, 2010 guys were hardly out for about 4 weeks. Last winter was also pretty bad and during the winter the working hours are reduced so you've only got a Saturday for OT

That winter was bad but that was something that's not happened in years and could be another 8 years again as for reduced daylight hours most lads don't work till 5pm and beyond I usually will till 4-4.30pm so in reality through the winter I only lose 30 minutes daylight a day which can be easily made up by pushing on through a working day.  

 

[Cleanco]

Some of you will be able to point back to posts where I have been an advocate of taking on people as self employed... My opinion of this has largely changed due to how my little brother has been treated recently so I now agree a lot more with what you've said here mate.

My little bro works for a builder who has massive contracts with the likes of BT and Barclays. His lads work all over the country. Take home pay is around £300 if they're home and £520 if they're working away. They are ''self employed'' on a scheme that has been running since the 90's where the company you work for pays your tax. They submit payments direct to HMRC and confirm how much you earned that week. The lads all seem to end up with a rebate and are well chuffed when this comes through. Thats really helpful of them as they don't need to find an accountant. They also don't know to claim every pair of steelies they buy or every winter work jacket, they don't put fuel through... The list is endless. They lose a lot more through this than a decent accountant or bookkeeper would cost.

At the beginning of December I became an uncle for the second time. He was back to work the next day, literally the next day. He is legally entitled to £150 a week Paternity leave for 2 weeks. He wasn't told about this. It's paid by the government so wouldn't cost his boss a penny. This week he was laid off for the week as the guy has no work ready to start.... 2 young children at home to feed, doing it all legit, it just ain't fair. Yes you are correct, he is looking for another job!

This is where I go off on a slightly different point of view.... If you fill one van that brings in £4.5k per month, less expenses it's at £3800 say, very very roughly of course. Try and take on a full timer on a permanent full time contract, 3 weeks of no work and you're in massive trouble. Take on a part timer (no pun intended) and he or she will either only want part time hours permanently or will be looking for a full time job elsewhere which leaves you at risk of losing him or her and leaving yourself with too much work.

Just a little side note, most good accountants will advise you are better to employ a team of part timers instead of a few full timers, less NI contributions, holidays are easier to cover, sickness is easier to cover etc. This is a strategy is taken by a lot of large UK businesses. It doesn't necessarily suit the demographic we would look to employ though which is often a family man who is the main bread winner.

I think for your first employee there are many circumstances where you will need to put someone on a 0 hour contract, if you can afford to then putting them on a 16 hour contract with the intention of them working 35-40 hours or whatever will be much better. The contract can be increased at a later date. Yes it isn't necessarily fair in worst case scenario's but I think as long as you intend to treat them as fairly as possible it will usually work out nicely.

With regards to self employed there is one simple way to look at it, if an employee came to you and said 'I ain't coming in next week because i'm bricklaying for mike down the road' would you tell them they aren't? If the answer is yes then they are employed and should be treated as such. If you have a handful of employees already and want to take on a casual worker that can be brought in when things are busy then there is no reason they have to be employed. If for example you take on a bunch of conny roof cleans and want a lad who can dip in sort them all out for you then he isn't necessarily employed, still has to agree to work on a self employed basis though. This is the same principal as me dropping someone on here a message to work a job with me, they are self employed sub contractors and I just pay them whatever we agree etc.

Sounds like you bro was being fleeced on that sort of money for a self employed builder. That aside I think were he went wrong though was that he treated his income as a weekly wage which you cannot do when self employed. My dad taught me that as he was a self employed engineer/welder and when the times were good they were very good but he also had some bad times that you have to prepare for. I had a conversation with a self employed builder once and the way he does it is for the first few months of the year he would save most of his earnings to cover that years basic living expenses then once they are covered it doesn’t matter what happens as your essentials to live comfortably are covered. Then your basically working for your luxury’s. Working as self employed can be far more lucrative than as an employee if you’ve got the brains to go about it the right way (no disrespect to your bro), some just prefer the security that being an employee offers. 

 

[Green Pro Clean Ltd]

On another note if you don’t mind me asking  @Green Pro Clean Ltd how much profit do you expect to yield from each van in a multiple van operation based on one man per van these days?  I’m not expecting you to discuss your exact financial business aspects as I most certainly wouldnt on an open forum but just a rough guide as I looked into this a good few years back and went through a few figures with my accountant and we worked out that with all the extra expenses it brings also including lockups, a yard, admin staff and premises/office etc I’d need at least 10 vans out there before I could see a financial gain compared to what I was achieving on my own as a sole trader. I know once that barrier has been broken the world is your oyster but I didn’t want to be stuck with all the stress of running a big business for not much extra financial gain which is why we are all in this job. I’m also guessing that it’s not just a case of, get a few vans on the road and watch the money come rolling in. I bet once your at a certain size there’s more work to do off the tools than when you was on them. 

You must have missed the part above where I said I wasn't going to talk about their targets.  ?

If your accountant thinks you need 10 vans to make profit either your numbers are way off and you love doing £3 jobs all day or he is simply a poor accountant. 

 

[Cleanco]

You must have missed the part above where I said I wasn't going to talk about their targets.  ?

If your accountant thinks you need 10 vans to make profit either your numbers are way off and you love doing £3 jobs all day or he is simply a poor accountant. 

Fair play, don’t want your employees finding out how much you making eh?

Not ten vans to make a profit, ten vans to make as much as I can on my own. That was also on the basis that I came off the tools altogether.

 

[P4dstar]

Fair play, don’t want your employees finding out how much you making eh?

Not ten vans to make a profit, ten vans to make as much as I can on my own. That was also on the basis that I came off the tools altogether.

I have looked at some rough figures as i'm working towards a multi van operation. Can't see you would need 10 vans to make the same profit as a single operator, no one would do it if that was the case. I reckon the van you add that takes you over the VAT threshold would basically compensate for the loss in income from paying VAT. It would be possible to take yourself over the VAT threshold in the first van under some circumstances, more likely in the second and pretty much definite in the 3rd. 20% of your takings on each van are lost immediately to VAT. Around £1700-1800 per month in  wages of 16k with your NI contributions and pensions (Not including any bonus schemes) If each van takes 4k and needs £600 worth pf petrol and equipment each month you are still clearing a grand on that van.... Very rough, no planning involved with any of that. I'm sure all of the above can be cut down to maximise the profit. Then its up to you if you get in a van and save that £1800 a month or let someone do it for you. I would be surprised if 10 vans wasn't fetching 9-10k per month once you factor in holidays though.

Before anyone shoots me down with ''what about this and what about that'' I was just giving a very very rough example. I am aware you would probably need an office with a receptionist etc etc etc at that point.

 

[Green Pro Clean Ltd]

I have looked at some rough figures as i'm working towards a multi van operation. Can't see you would need 10 vans to make the same profit as a single operator, no one would do it if that was the case. I reckon the van you add that takes you over the VAT threshold would basically compensate for the loss in income from paying VAT. It would be possible to take yourself over the VAT threshold in the first van under some circumstances, more likely in the second and pretty much definite in the 3rd. 20% of your takings on each van are lost immediately to VAT. Around £1700-1800 per month in  wages of 16k with your NI contributions and pensions (Not including any bonus schemes) If each van takes 4k and needs £600 worth pf petrol and equipment each month you are still clearing a grand on that van.... Very rough, no planning involved with any of that. I'm sure all of the above can be cut down to maximise the profit. Then its up to you if you get in a van and save that £1800 a month or let someone do it for you. I would be surprised if 10 vans wasn't fetching 9-10k per month once you factor in holidays though.

Before anyone shoots me down with ''what about this and what about that'' I was just giving a very very rough example. I am aware you would probably need an office with a receptionist etc etc etc at that point.

Van 1 will get you to just below VAT threshold - Once you go VAT registered you need to move quickly from £85K to £102K just to offset the hit on the VAT before you're moving forward again. Take your estimate of 10 vans doing £9 - £10 K Profit for you, double it and add on some for good measure.   

 

[Green Pro Clean Ltd]

Fair play, don’t want your employees finding out how much you making eh?

Not ten vans to make a profit, ten vans to make as much as I can on my own. That was also on the basis that I came off the tools altogether.

The employees know exactly what's going on, they have the ability and authority to make collections, give quotes and sign new business and they can't do that without knowing the pricing structure.  

How much the company makes is of no relevance to the employees, the only relevance to them is that it's making profits and capable of meeting payroll. 

I don't wish to be rude here but just two vans run right will take you off the tools and make you more than you can do yourself in one van, this isn't hypothetical, we've done it.  As I said above, you must either be working like a dog on massively underpriced work or your accountant isn't very good at his job.  

No one would run a 10 van fleet and all that entails just to take the same money they could do in 1 van on their jacks without the responsibilities, it's just not worth it.  

 

[P4dstar]

Van 1 will get you to just below VAT threshold - Once you go VAT registered you need to move quickly from £85K to £102K just to offset the hit on the VAT before you're moving forward again. Take your estimate of 10 vans doing £9 - £10 K Profit for you, double it and add on some for good measure.   

As I say, figures written on the back of a cigarette packet they're so rough. It's of no relevance to me, that sort of structure is a distant dream at the moment!

I do like your way of looking at it with regards to VAT registration. Too easy to get caught into what each van is worth and not just look at the physical earnings of the business as a whole.

 

[Part Timer]

What people forget to add to the equation is just because 2 vans make X it isn't guaranteed that 4 vans will make X x 2. A lot of businesses fail because they use a small business plan and extrapolate into a large business plan.

 

[scottish cleaning service]

When I was in fire brigade, we had 4 commands. One command had over 2,000 employees and the others had around 700 employees. The three small commands didn't have any bother with employees getting time off nor training. On the other hand the large command was a nightmare to run, too many employees. Now its worse because we have one big command that will take years to sort out. I reckon a person can manage about five employees comfortable, after that all it does is cause stress and makes less money. FWIW 

 

[Cleanco]

The employees know exactly what's going on, they have the ability and authority to make collections, give quotes and sign new business and they can't do that without knowing the pricing structure.  

How much the company makes is of no relevance to the employees, the only relevance to them is that it's making profits and capable of meeting payroll. 

I don't wish to be rude here but just two vans run right will take you off the tools and make you more than you can do yourself in one van, this isn't hypothetical, we've done it.  As I said above, you must either be working like a dog on massively underpriced work or your accountant isn't very good at his job.  

No one would run a 10 van fleet and all that entails just to take the same money they could do in 1 van on their jacks without the responsibilities, it's just not worth it.  

As predicted my calculations must be way off the mark. Can’t blame the accountant as he only has what I give him hence why I was asking for advice and a rough estimate in the first place. 

My calculations are as follows and based on one man doing 300 per day, 5 days a week

300-vat

500-reasonable wage for employee

100-holiday pay, sick pay,workplace pension

200-running expenses per van

200-global business expense e.g admin staff,office, yard +lockup to store vans and epuipment etc

leaves me around 200 per week profit. 

Now you see were I got ten vans from. 

The global business expenses may come down a little the more vans you acquire but not much. 

 

[P4dstar]

200-global business expense e.g admin staff,office, yard +lockup to store vans and epuipment etc

In the same respect that 4 vans wouldn't make double the amount 2 vans would that wouldn't necessarily increase by 200 per van, you say it may come down a little but surely you're not thinking people get a new premises every time they get a new van