The Importance of Staying Compliant .. and what you need to be compliant with UK employment law

Any business employing staff, regardless of the number of staff, must be aware of four documents that they must absolutely have in place to be compliant with legislation as detailed below:

  • Contract of Employment
  • Disciplinary Policy
  • Grievance Policy
  • Health and Safety Policy

Contract of Employment

Failure to provide written particulars of employment as detailed within the contract of employment by the end of the employees first day with the business is against the law and poses several significant risks to the business.

  • There is potential for pay out of significant financial costs and damage to credibility and reputation if the business is taken to employment tribunal. It is worth noting that an employee can't make a standalone claim against the business for failure to provide a contract of employment and if this document isn’t provided to the employee it is unlikely that anything will happen immediately but if, at some stage in the future that employee takes the business to employment tribunal for another reason I.e. unfair dismissal, discrimination, unlawful deductions, then that's when the fun begins. Sadly, employment tribunal claims can and do happen regularly because sometimes things can very quickly spiral out of control with even the most prestigious of employees and/or businesses. At this stage failure on the part of the business to provide written particulars of employment will be added to the claim and it could cost a monetary sum of anything between 2 and 4 weeks of the employee's salary payment on top of any other elements to their claim. Additionally, employment tribunal judges look very unfavourable on businesses who fail to adhere to legislation and you therefore risk having a black mark against your name as far as the employment tribunal is concerned prior to getting down to the nitty-gritty of the claim.
  • Without a contract of employment, it is impossible for each party within the employment relationship to know and understand their obligations. Consequently, neither party will know their entitlements or the expectations placed on them, nor will they know how to handle even the most basic situation that they could encounter during the employment relationship. For example, if either party wishes to end the relationship how much notice do they have to give each other, what statutory benefits is the employee entitled to and are there any enhanced benefits that the business are offering.
  • As a business providing a contract of employment is your opportunity to create clauses to protect colleagues, customers and the wider business. Some examples of this include confidentiality, data protection, non-compete and non-solicit clauses.
  • What's the alternative to a written contract of employment? There really isn't one - but if for example you attempt to adhere to a verbal agreement how on earth do you keep track of this? How do you ensure consistency and fairness between colleagues? Proving what's been agreed would be very difficult and what happens if there's a dispute and each party have a different version of the verbal agreement? Things get very complicated.
  • Having a contract of employment is also reassuring for the employee, especially when they are resigning from a role to join you. They need to know you are a credible future employer, and one of the first indicators of this will be the contract of employment.

Many small businesses are not aware of their legal obligations in relation to the contract of employment, but rest assured that if you have fallen foul of this, you still have time to rectify it. By acting now, no employee will have the right to demand compensation from you in relation to this going forward.

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Discipline, Grievance, and Health & Safety Policy

UK legislation says businesses must have 3 policies as an absolute minimum, and this includes the discipline, grievance, and health & safety policy.

The reason why the discipline and grievance policy is so important is because any concerns that the business may have with an employee and any concerns the employee may have with the business should be dealt with through these policies and in line with the principles outlined in the ACAS code of practice. Therefore, all discipline and grievance policies need to be compliant with the ACAS code of conduct and should, therefore, allow for a fair process to be followed.

It is hoped that having these policies in place will assist in ensuring that such issues are dealt with fairly and consistently internally; without the need to go to employment tribunal. But it remains to be the case that many claims that employment tribunals are dealing with arise further to initiating the discipline or grievance process. Sometimes a business may have failed to follow these processes properly but ultimately how are you going to have a chance of getting this right if you don’t have these policies in place? Obviously, there are many factors at play when the employment relationship goes so badly wrong that an employee takes their employer to employment tribunal but if the business possesses these policies and uses them in a fair, consistent and proper manner they are more likely to see a successful outcome at employment tribunal.

It is also worth noting that failure to follow the business's discipline or grievance policy could result in an increase in a tribunal award by up to 25% of the claim.

It goes without saying that the health and safety of any business is of paramount importance. Although legislation says that businesses only need to state such a policy in writing when they have 5 employees or more, it is recommended and best practice to have health & safety policies in writing from the moment you take on your first employee.

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Author: Anna Roberts

Anna Roberts

Anna is a HR Consultant at StaffLeave, heading up our HR Services division, and likes to contribute ways to help you get the most of your holiday management, improve well-being and work-life balance.