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Human Resource Compliance – What Each UK Company Director Needs to Know
Bill Tait

If you run a UK business with employees, your chances of having a case brought against you in relation to employment matters are just under 1 to 1. Well, it’s a grim picture. But if you act responsibly by complying with the regulations, your chances of failing in an Employment Tribunal are less. But, what is Human Resource Compliance, how does it affect businesses and finally what should be done to your specific business to comply with the current regulations. Let’s try to answer these complex questions in a simple fashion.

Human Resource Compliance System - Basic Facts

The UK government and the EU stipulate UK businesses must have certain policies, procedures and evidence in place in relation to employees. Collectively these can be called a business’s Human Resource Compliance System.

The following are the basic reasons for a business to have a Human Resource Compliance System in place.

- To meet legal requirements.

- To have policies and procedures which show that you have acted reasonably and have the evidence to prove it, when it comes to a court of law.

- To save on management and legal costs.

- To avoid adverse publicity.

- To keep your employees satisfied.

- To focus on running your business and not be distracted by things you can deal with in advance of problems occurring.

What are the consequences if you do not have a Human Resources Compliance system?

The first thing an Employment Tribunal or similar court will ask for is your policy, procedure and associated evidence – if you do not have them you have very little proof to show that you have acted reasonably.

In discrimination cases, an award by a Tribunal to an employee may be unlimited. You can usually not recover the costs of management time and legal costs. Your business reputation will suffer if a case catches the attention of the press and becomes known to the public.

What are the chances of a case being brought against your business?

There are about 4 million businesses in the UK; more than half of these are one person, family employees or partnerships.

In 2003-2004 115,000 cases were brought to Employment Tribunals – probably a similar number were settled by ACAS or others before reaching the Tribunal – so your chances are about 9 to 1 against a case being brought.

The normal UK business lasts for about 7 years – so your chances of having a case brought against you over the life of the business are just under 1 to 1.

How to check the Human Resource Compliance situation of your company?

You can ask an experienced HR professional to do an assessment for your business or ask a law firm to do the same.

One free but comprehensive solution is the following where you can input the specifics of your business and receive a detailed report on what you need to do to comply with Human Resource legislation in the UK.

http://www.customerhouse.com/hrcomply

Once you understand the policies you need to implement based on your business situation you may also need to make sure you implement the systems in such a way that 1) you can provide proof for your employee being made aware of it 2) change the policies based on legislative changes at a later stage.

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About the author

Bill Tait has more than 15 years experience in Human Resources Management, Employment Legislation and Industrial Relations, Policies and Procedures. He provides Human Resource Compliance services to businesses in the UK as a consulting partner at Customerhouse Limited.

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