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3 Employment Policies Every Small Business in the UK Has to Have - By Law!

Being the owner of a small business is a thrilling experience. It means you’ve stepped into your own power, and - hopefully - you’re pursuing your passion while earning a living. But from the moment you take on your first employee, you'll face a labyrinth of rules and regulations and a legal obligation to have at least three specific employment policies in place.

Small businesses need to be aware of legally required employment policies

In this blog post, we'll outline the three employment policies every small business in the UK needs and provide step-by-step guidance on implementing these policies effectively.


UK Employment Policies Required by Law


1. Health and Safety Policy

By law, all businesses in the UK must have a Health and Safety Policy in place. The policy should be in writing if you have five or more employees. For less than five employees, an unwritten understanding of the policy is legally sufficient. However, we'd still encourage you to document it.


Your Health and Safety Policy should outline your commitment to providing a safe working environment, including your responsibilities as the employer and those of the employees.

When it comes to your employees' well-being, there’s no compromise. Providing and maintaining a safe and healthy work environment isn't just a legal obligation; it's a moral responsibility that contributes to a more productive and harmonious workplace.


Here's how to create and implement it.


Policy Overview

Your Health and Safety Policy should serve as the cornerstone of your commitment to providing a secure workplace. It's not just a document. It’s a pledge to safeguard your employees' physical and mental health.


To create an effective policy, consider covering:

  • Statement of Intent: Begin with a clear and concise statement articulating your commitment to health and safety. This statement sets the tone for the entire policy.

  • Scope and Applicability: Define the scope of the policy, specifying which employees it covers and the areas of your business it includes.

  • Roles and Responsibilities: Clearly outline the responsibilities of both employers and employees in maintaining a safe working environment.

  • Legal Compliance: Mention your dedication to adhering to all relevant laws and regulations concerning health and safety.

Compliance Steps

1. Risk Assessment

A comprehensive workplace risk assessment is the foundation of your Health and Safety Policy. Look for potential hazards such as electrical risks, fire hazards, ergonomic concerns, and any other factors that could jeopardise employee safety.

  • Action Point: Document all identified hazards, assess their severity and likelihood, and prioritise your mitigation efforts.

2. Health and Safety Training

Ensuring your employees are well informed and trained in health and safety procedures is crucial.


Here's how to go about it:

  • Identify Training Needs: Assess the specific training needs of your workforce. For instance, employees in a manufacturing setting may require different training from those in an office.

  • Regular Training Sessions: Schedule regular training sessions to keep your employees updated on safety procedures, emergency protocols, and the proper use of safety equipment.

  • Training Records: Maintain detailed records of employee training, including dates, topics covered, and attendees. This will serve as evidence of compliance.

3. Emergency Procedures

In the event of unexpected incidents like fires or accidents, having well-established emergency procedures is indispensable.


Here's what you should consider:

  • Evacuation Plans: Develop and communicate clear evacuation plans for different scenarios. Ensure that employees know the location of emergency exits and assembly points, and how to use fire safety equipment. Place maps around the workplace to help remind employees and inform any guests.

  • Emergency Contacts: Compile a list of emergency contacts, including local authorities, medical facilities, and key personnel within your company. Consider appointing a fire marshall to lead employees in the case of an emergency.

  • Drills and Testing: Conduct regular emergency drills to ensure that employees are familiar with evacuation procedures and can respond effectively in real emergencies.

4. Regular Review

Your Health and Safety Policy isn't a 'one-and-done' document. It should be reviewed and updated regularly to be current and effective.


Be sure to cover:

  • Schedule Reviews: Establish a schedule for policy reviews, which may be annually or during significant workplace changes.

  • Adapt to Changes: Be vigilant about staying up-to-date with changing circumstances, new regulations, and emerging risks. Update your policy accordingly to reflect the evolving needs of your business.

By following these comprehensive steps, you'll not only meet your legal obligations but also demonstrate a genuine commitment to the well-being of your employees. A robust Health and Safety Policy is the foundation upon which a culture of safety and security can flourish in your small business.


2. Grievance Policy

A well-structured grievance policy is a legal necessity and a crucial tool for fostering a positive workplace culture. It allows employees to raise concerns or complaints in a structured and fair manner.


Note: In the UK, your Grievance Policy should follow the ACAS Code of Practice: Disciplinary and Grievance Procedures. If it doesn’t, it can affect any compensation you may be required to pay your employees and the results of any employment tribunal claim.


Let's delve deeper into how to create and effectively implement a Grievance Policy.


Policy Overview

Your Grievance Policy should be a beacon of transparency, outlining how employees can report grievances, the process for addressing these grievances, and the steps involved. Doing so is valuable for building trust within the company.


For clarity, be sure to cover:

  • Reporting Mechanisms: Specify the various channels through which employees can report grievances, such as in-person meetings, written submissions, or dedicated grievance forms.

  • Process Explanation: Define the process clearly from the moment a grievance is reported to its resolution, including the roles and responsibilities of all parties involved.

  • Confidentiality Assurance: Reiterate your commitment to maintaining the confidentiality of the process, emphasising that employees' concerns will be kept private to the greatest extent possible.

  • Timelines: State the expected timelines for each stage of the grievance resolution process, from initial reporting to final resolution. Timelines help manage expectations and ensure a timely response.

Compliance Steps

1. Designated Contact

Appointing a designated person or HR representative to handle grievances is vital. This individual should be impartial, well-versed in the grievance process, and accessible to all employees.


Here's how to implement this step:

  • Clear Point of Contact: Ensure that employees know the designated contact person and how to reach them. This information should be readily available, whether on a prominent notice board, in an employee handbook, or on your company's intranet.

  • Training: Train the designated contact person or HR representative to handle grievances effectively, ensuring they are well-prepared to navigate the process.

2. Confidentiality

Confidentiality is a cornerstone of any grievance policy. Assure employees that their concerns will be handled discreetly.


Here's how to ensure compliance:

  • Confidentiality Pledge: Emphasise the confidentiality pledge in your policy and reiterate it during grievance reporting to reassure employees.

  • Limit Access: Restrict access to grievance-related information to only those directly involved in the resolution process.

3. Timelines

Establishing clear timelines is essential to prevent undue delays and maintain trust in the process.


Follow these steps:

  • Define Timeframes: Specify timeframes for acknowledging receipt of a grievance, conducting investigations, and reaching a resolution. This sets expectations for both employees and management.

  • Regular Updates: Keep the involved parties informed of progress and any changes in timelines. Transparency helps manage expectations.

4. Documentation

Maintaining thorough records of all grievance proceedings is crucial for compliance and accountability.


Here's how to ensure proper documentation:

  • Standardised Forms: Use standardised forms or templates to record grievance details, interviews, findings, and resolutions. This ensures consistency in documentation.

  • Secure Storage: Store all grievance-related documents securely, either electronically or in physical files, depending on your company's practices and data protection regulations.

Incorporating these compliance steps and practical examples into your Grievance Policy will help create a workplace culture where employees feel safe and supported in raising their concerns, ultimately contributing to a more harmonious and productive environment. Remember that ongoing training and regular reviews of your policy are essential for its continued effectiveness.


3. Disciplinary Policy and Procedures

Maintaining discipline and fairness in the workplace is essential for a productive and harmonious environment. A well-crafted Disciplinary Policy and Procedures document is a fundamental tool in achieving this goal.


Note: As with your Grievance Policy, your Disciplinary Policy should follow the ACAS Code of Practice: Disciplinary and Grievance Procedures. If it doesn’t, it can affect any compensation you may be required to pay your employees and the results of any employment tribunal claim.


Let's explore how to create and implement this policy effectively.


Policy Overview

Your Disciplinary Policy should serve as a clear roadmap for both employees and management, outlining the rules, consequences for misconduct, and the process to be followed in disciplinary matters.


Be sure to:

  • Define Unacceptable Behaviour: Begin by defining precisely what constitutes unacceptable behaviour in your organisation. This can include insubordination, absenteeism, harassment, theft, or any other behaviours that breach company policies.

  • Disciplinary Procedure: Outline the step-by-step procedure that will be followed in the event of misconduct. This should include the stages of discipline, from initial counselling to possible termination.

  • Potential Consequences: Specify the potential consequences that can result from misconduct, such as verbal warnings, written warnings, suspension, demotion, or termination. Be clear and consistent in detailing these consequences.

Compliance Steps

1. Clear Guidelines

Provide employees with a comprehensive set of rules and expectations regarding their conduct.


Steps for clarity and understanding include:

  • Employee Handbook: Incorporate your disciplinary guidelines into the employee handbook, which should be provided to all employees upon hiring.

  • Regular Communication: Ensure that these guidelines are not just handed out but actively communicated to employees. Regular training sessions or reminders can help reinforce expectations.

2. Progressive Discipline

Establishing a progressive discipline approach is crucial to ensure fairness and consistency in addressing misconduct.


Consider the following:

  • Verbal Warning: Start with a verbal warning for minor infractions. Document the date, details, and actions taken during the warning.

  • Written Warning: If misconduct persists, issue a written warning. Clearly outline the problem, the expected improvement, and the consequences of failing to do so.

  • Suspension or Further Action: For severe or repeated misconduct, escalate to suspension, demotion, or other appropriate actions. Ensure that these steps are outlined in your policy.

3. Investigation

Thoroughly investigating any allegations of misconduct is a critical aspect of a fair disciplinary process.


Follow these guidelines:

  • Impartiality: Ensure that investigations are conducted impartially and by individuals with the necessary expertise. Avoid conflicts of interest.

  • Interviews and Documentation: Interview all relevant parties and document findings, evidence, and witness statements meticulously.

  • Due Process: Provide the accused employee with an opportunity to respond to the allegations before making any decisions.

4. Appeals Process

Including an appeals process in your policy adds an extra layer of fairness to the disciplinary procedure.


Here's how to incorporate it:

  • Appeals Committee: Designate an appeals committee or individual who was not involved in the initial disciplinary action. This ensures an unbiased review.

  • Clear Procedure: Outline the steps an employee can take to appeal a disciplinary decision. Ensure that the process is clear and straightforward.

Implementing your Disciplinary Policy and Procedures diligently and consistently can help maintain a fair and disciplined workplace, ensuring that employees understand the consequences of misconduct and their rights throughout the process.


Playing it Safe: Legal Compliance for UK Small Business

In the complex landscape of UK employment law, these three essential policies are your pillars of compliance and effective HR management. By following the steps outlined and customising these policies to your business's unique needs, you can cultivate and uphold a safe, fair, and productive work environment while ensuring legal compliance.


At MARGE, we understand that your small business is your passion and livelihood. You're an expert in your trade or business, not in the legal and regulatory matters of employment. And why should you be? That's what we're here for. To support you on your journey as your business grows. Our experienced team is ready to assist you. We'll tackle your policy requirements so you can get back to building your business.

Contact MARGE HR today to help you implement employment policies needed in your small business


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