From February 2012, the maximum compensatory award made by an Employment Tribunal is £72,300 for a successful unfair dismissal claim whilst awards made in cases of unlawful discrimination can be unlimited

For an SME this kind of payout, not to mention the legal fees, disruption to work and bad publicity, could irreparably damage a business. Falling foul of other Employment Legislation can be costly too. So what can you do to minimise your risks?

1. At a minimum provide all employees with a Written Statement of the Terms and Conditions of Employment within 8 weeks of their start date – this is a legal requirement.

2. Preferably provide all employees with a more comprehensive Employment Contract that includes key rights and requirements associated with being employed by your business; provide this prior to employment commencing or as soon as possible after the start date.

3. Maintain comprehensive employee records that evidence your correct and fair treatment of employees; ensure that these records comply with Data Protection requirements

4. Check your employees – always obtain references, request medical reports if you have any concerns, complete CRB checks if required, and ask to see proof of qualifications and driving licence if appropriate to the job.

5. Check eligibility to work in the UK whenever you take on a new employee – the fine for not doing so is £10,000 per employee who is not entitled to work in the UK and you could face 2 years in prison.

6. Proactively establish a company culture of respect and value for people, that promotes fairness and does not tolerate prejudice, discrimination, harassment or bullying.

7. Ensure that all matters relating to Health, Safety and Welfare of employees are managed by a competent person who fully understands their responsibilities.

8. Set clear workplace policies, rules and issue guidelines for conduct and performance; consider training for employees to ensure that these are understood and followed by everyone.

9. Outline the consequences for failure to adhere to these rules in a Disciplinary Policy that complies with the ACAS Code of Practice – this is a legal requirement.

10. Set out a formal Grievance Policy that complies with the ACAS Code of Practice to deal with concerns or complaints raised by employees – this is a legal requirement.

11. Deal with problems and issues as they arise; deal with matters immediately, fairly and consistently. In the first instance aim to deal with matters informally, however if matters are significant enough to warrant formal action, do so in accordance with your Disciplinary or Grievance Policies as appropriate.

12. If in doubt seek the advice of an expert! HR Consultants are an invaluable service to your business that can save you time, money and help you avoid costly mistakes, whilst legal advice through an expert employment law solicitor is advisable in circumstances of a complex nature.

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