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Essential Policies Every Business Must Have

Policies are essential for managing the legal obligations associated with having employees, which can be complex but crucial for creating a safe and equitable working environment. While navigating the legal landscape can feel daunting for time-poor small businesses, it’s important to remember that the legislation is in place to protect both your employees and you as an employer.

In this article, we identify the key policies you should have in place to ensure you meet the minimum legal standards and create a positive working environment.

Health and Safety Policies

As a responsible employer, the safety and well-being of your employees should always be your top priority. The Employment Rights Act (ERA) 1996 mandates that businesses with more than five employees must establish a health and safety policy.

These policies should outline your commitment to maintaining a safe workplace. This means establishing, detailing, and communicating your procedures for reporting hazards or accidents, conducting risk assessments, and the protocols for emergency situations.

Failure to comply with health and safety regulations not only jeopardises the welfare of your employees but can also result in severe legal consequences, including fines and potential litigation.

An employer should take all reasonable steps to meet health and safety legislation and keep their employees safe, should that be the case, it is likely any breaches of the legislation would be at the fault of the employee. Based on our experience, we recommend that you take reasonable steps such as implementing comprehensive health and safety training (including record keeping) and ensuring that employees understand the company’s health and safety policy. This is not simply referring employees to a staff handbook but including posters and clear signage throughout the workplace. It is also good practice to have health and safety questionnaires sent to employees periodically so they can report any issues and feel confident that they can come forward with any known or anticipated risks.

Disciplinary and Grievance Procedures

To resolve conflicts in the workplace fairly and transparently, it is crucial that your business has clear guidelines for disciplinary actions and grievance procedures. The ERA 1996 defines that you must inform employees of disciplinary procedures from the outset of employment, including avenues for appeal and reporting grievances.

Additionally, adherence to the Advisory, Conciliation, and Arbitration Service (ACAS) code is essential, as it establishes minimum standards for your disciplinary and grievance processes. Your failure to follow these guidelines could leave you vulnerable to claims of unfair dismissal and may result in increased compensation awarded by employment tribunals.

Having clear procedures in place with regards to Disciplinary and Grievance is vital, not only to adhere to legal requirements but to protect the company and its employees in the event of action being taken. Following a full and fair procedure is tantamount to being a good employer. We have experience of dealing with matters where Disciplinary procedures were not followed in circumstances where the employee in question breached their employment contract and company policy so severely, but the Tribunal still found that there had been an unfair dismissal. The compensation was reduced dramatically given the employees conduct but this is a fitting example of how the Tribunal, no matter the conduct, will find in favour of the employee if little or no procedure is followed.

GDPR Compliance

In a time where data privacy is paramount, you must comply with the General Data Protection Regulations (GDPR) 2018 to safeguard personal information. GDPR mandates strict protocols for the collection, processing, and storage of personal data, placing responsibility on businesses to protect both customer and employee information.

Having clear policies outlining data handling procedures is essential for ensuring compliance and mitigating the risk of data breaches. Training employees on GDPR requirements is equally vital to prevent careless violations and to demonstrate a commitment to data protection.

Equal Opportunities and Diversity

It is important that your business is promoting equality and diversity within the workplace not only as a moral imperative but because it is your legal obligation. While not mandated by law, implementing an Equal Opportunities policy aligns with the Equality Act 2010 and helps prevent discrimination based on protected characteristics such as gender, race, sexual orientation, and religion.

Failing to address issues of equality and diversity can have significant repercussions, including damage to your business’s reputation and potential legal action. Having a policy in place demonstrates your  commitment to adopting an inclusive work environment where all employees feel valued and respected.

Considerations for Comprehensive Staff Handbooks

You may benefit from creating a comprehensive staff handbook that includes the essential policies discussed above and additional guidelines such as those for hybrid working arrangements, dress codes, and the use of the internet and social media.

By providing employees with a comprehensive handbook,  you create clear and consistent communication of your policies and procedures.  This will support the creation of a positive workplace culture built on transparency and mutual respect.

Implementing robust policies in line with legal requirements will protect both your employees and your business. By prioritising health and safety, fair treatment, data protection, and diversity, you can create an environment that promotes productivity, innovation, and long-term success.


If you run a small business and are seeking assistance implementing the policies mentioned above, please get in contact with Alex May from our Employment Law department.

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