A new automated employment contract generation tool, with foreign language capability, which will help small firms avoid business busting fines, has been developed thanks to a Scottish Enterprise grant.

To assist businesses comply with legislation and avoid hefty penalties at tribunals, Empire, an HR employment law firm, has launched Contract Generator, a new online tool which will produce comprehensive yet easy to read, legal employment contracts in just five easy steps.

Empire, which is based in Aberdeen, Inverness and Glasgow, claims that 1.2million businesses in the UK are risking legal fines as they fail to issue legal contracts to their employees.

According to government statistics, nine out of ten small businesses fail to issue legal agreements to their staff, leaving the business at risk of fines at tribunals. Where an employer has not issued a written statement, an industrial tribunal can fine the company four weeks’ wages.

Contract Generator, the first fully automated employment online contract tool, has been developed by Empire thanks to an Innovation Grant from Scottish Enterprise.

The Innovation Support Service offers support to Scottish-based businesses with an innovative business plan, which can prove they will finance a significant part of the project costs. Empire was successful in gaining the innovation grant to develop innovation within Empire and in particular the Contract Generator tool.

Val Cheetham, Innovation Specialist from Scottish Enterprise, said:

“Scottish Enterprise (SE) awarded Empire an Innovation Grant to support the creation of an innovation culture within Empire.  The development of the Contract Generator has increased skills and knowledge within the company and will also see the number of skilled employees increase over the next three years.  By adding the Contract Generator to the company’s portfolio of products and services the company’s turnover will increase which is a consideration when SE is looking to award Innovation Grants.

“SE support made it possible for Empire to complete the project in a shorter period of time and as a result keep the company ahead of the competition”.

Empire CEO, Steve Cook, said: “The law states that Employers must issue a written contract to an employee within 8 weeks of commencement to protect both the employer and the employee. In reality, these contracts should be issued before the employee starts, however, many small businesses struggle to find the time, or do not have the expertise required to put together a legal contract, relying instead on verbal agreements, or old contracts regurgitated from a previous employer.

“Employment contracts do not have to be complicated – but they should be legal, user friendly and clear. After just an interview or two, employers always take a chance when employing new staff, so a written document outlining the responsibilities and rights of both parties is crucial to the employee/employer relationship.

“Contract Generator is the first of its kind. Employers will be able to choose from simple, very often pre-completed, drop-down boxes, and quickly produce an up-to-date legal document for each employee. The contracts are updated automatically when new legislation arises, so businesses can be sure they are always issuing the latest legal documents.

“The new service also accommodates the needs of employers who have non-English speaking staff. As the number of immigrants grows, businesses face a huge challenge to communicate terms and conditions with employees. The Contract Generator deals with this issue instantly as the contracts can be issued in Polish, Latvian, Spanish, French and others, at the touch of a button.

“Furthermore, as employment laws changes, with increasing family-friendly rights coming later this year and into 2015, the contract generator will automatically update to keep ahead of all new legislation. Employers can also choose whether to use Scots or English law, as applicable.

“In an increasingly busy and international workplace, Contract Generator will save employers time, stress, costs and potentially legal fines.”