An outsourced HR consultant in Ipswich warns that informal working arrangements can prove expensive

Your business is growing, your team is delivering, and your flexible arrangements seem to suit everyone. But sometimes, what works well in practice doesn’t line up with what employment law expects and that mismatch can leave you facing unexpected costs.

As an experienced HR consultant that business owners in Ipswich turn to for advice, I know that the law focuses on how relationships work day to day, not just what you call them. Over time, arrangements that began informally can evolve into something that carries different legal obligations.

Here are three common scenarios that can catch business owners out and how to fix them.

1. The reliable regular without a contract

You have someone who works the same hours each week, knows your customers well, and consistently delivers. There’s no formal contract because you both wanted to keep it simple.

The risk: If they work regular hours under your direction and mainly for your business, the law may see them as an employee. That means they could be entitled to rights such as holiday pay, notice periods and unfair dismissal protection.

The fix: If they work like an employee, employ them properly. A clear employment contract protects you both and sets expectations.

2. The long-term contractor who’s part of the team

They invoice through their own company but follow your schedule, work to your methods and handle tasks only they can do.

The risk: If they operate like an employee, they could be entitled to backdated rights, such as holiday pay or redundancy.

The fix: Review how they actually work. If they don’t have control over how, when and where they work, reclassify them as an employee or worker.

3. The flexible worker with no written terms

They help during busy times or for specific projects. Everyone understands the arrangement, but nothing is written down.

The risk: Without written terms, disputes are harder to resolve. All workers are entitled to written terms from day one, covering basics like pay, hours and notice periods.

The fix: Put the essentials in writing. It doesn’t have to be complex, just clear and agreed.

Protecting your business

• Review reality vs paperwork: Look at how the role works in practice.
• Match contracts to reality: Employees need contracts, workers need written terms and genuine contractors need independence.
• Review regularly: As your business grows, roles can change without you noticing.

Why this matters

If you get it wrong, you could face backdated holiday pay, notice pay, or redundancy costs that run into thousands. More importantly, unclear arrangements create uncertainty for your team and risk damaging trust.

Final thoughts

You don’t need to overhaul everything overnight. Start with your most established arrangements and make sure the paperwork reflects reality.

If you’re unsure whether your current agreements meet legal expectations, I can help. I provide HR consultancy services in Ipswich, working with business owners to protect their flexibility while avoiding costly surprises. As an outsourced HR consultant, I’ll help you keep the arrangements that work for you while ensuring they meet legal requirements.