Category: Employment Law
Running a small business is no easy task. With so much to manage, HR can often fall to the bottom of the list, but overlooking key HR responsibilities can be costly. From legal risks to lost productivity and reputational damage, HR mistakes can have a serious impact on your business.
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Here are 5 common mistakes to watch out for and how Access2 Human Resources can help you stay compliant, protected and confident in your HR processes.
No (or Outdated) Written Employment Contracts
Relying on verbal agreements or outdated contracts might seem harmless until something goes wrong. Written employment contracts are a legal requirement and the foundation of a strong employer-employee relationship.
All employees and workers are entitled to a written statement of terms on or before their first day of employment. This applies to full-time, part-time, fixed-term and even casual or zero-hours staff.
Without a legally compliant, up-to-date contract, you risk:
- Misunderstandings around job duties, working hours, salary, notice periods, or holiday entitlement.
- Disputes over sickness absence, flexible working, or disciplinary processes.
- Difficulty defending claims at tribunal if terms were not set out in writing or were ambiguous.
- Non-compliance with statutory entitlements, including those introduced in recent employment law updates.
Lack of HR Documentation – Policies & Procedures Missing or Ignored
Having clear HR policies in place is essential but simply writing them is not enough, your team needs to understand them, and you need to follow them consistently. For policies to be effective, they must be accessible, communicated clearly to employees and applied consistently by managers across the business. Access2 Human Resources is a Platinum Partner of BreatheHR, which gives you and your employees instant access to the data you need using one system.
Policies set the standard for how your business operates and how your employees behave. They help ensure fairness, support legal compliance and provide a clear framework for handling issues such as:
- Disciplinary and grievance procedures
- Sickness absence and return-to-work protocols
- Equal opportunities and anti-harassment commitments
- Health and safety responsibilities
- Family-friendly rights and flexible working requests
- Data protection and use of IT systems
Tribunal judges expect employers not only to have these policies in place, but also to demonstrate that they are understood and consistently applied. If an employee raises a complaint or claim and your policies are either missing, outdated, or not followed, your position will be significantly weakened, even if you acted with good intent.
Policy updates are also essential. Recent changes in UK employment law, such as statutory neonatal leave, flexible working from day one and enhanced protections for pregnant workers and carers, must now be reflected in your HR policies and employee handbook.
Our HR experts can review, draft, or update your full suite of policies, ensuring they are legally compliant, clearly written and aligned with your business values. Every client on our HR Plus and HR Premium plans receives a bespoke employee handbook tailored to your organisation, along with advice on how to communicate and implement the policies effectively. Our team also can create or update your employee handbook, ensuring all essential policies are covered and we also provide guidance on rolling these out effectively.
Missing Employee Records – Including Right to Work Checks
Incomplete or disorganised employee records are a common issue for small businesses, but they can lead to serious compliance breaches – particularly when it comes to right-to-work checks. Employers are legally responsible for confirming and recording that every employee has the legal right to work in the UK before employment begins. Failing to carry out these checks correctly, or not documenting them in line with Home Office guidance, can result in significant penalties.
Since 2024, the maximum civil penalty for employing someone without the right to work has increased to £60,000 per worker. In more serious cases, criminal prosecution is also possible, particularly where there is evidence of knowingly employing someone illegally. Beyond the legal and financial risks, businesses can also face reputational damage or risk losing a Home Office sponsor licence, if applicable.
Many employers mistakenly believe that simply viewing a passport is enough. However, the law requires you to follow specific procedures, including keeping clear copies of original documents, recording the date the check was carried out, and repeating the check where applicable for time-limited visas.
If you are unsure whether your employee files meet current requirements, get in touch. We will help you put everything in place to stay compliant and avoid costly mistakes.
Failing to Address Performance Concerns Early
Performance issues rarely go away on their own. In fact, the longer they are left unaddressed, the more damaging they can become. Avoiding difficult conversations might feel easier in the short term, but over time, it can lead to a breakdown in team morale, reduced productivity and a lack of trust in management.
When underperformance is not managed properly, it can also set a precedent for poor standards across the business. Other employees may feel frustrated if they see colleagues not meeting expectations without consequence, which can affect motivation and create unnecessary tension within the team.
From a legal perspective, failing to address performance concerns promptly and fairly can leave your business vulnerable. If a situation escalates and results in dismissal, any failure to follow a structured and transparent process could be challenged in an employment tribunal. This includes having clear documentation of concerns, setting objectives for improvement and providing support before considering formal action.
Not Keeping Up to Date with Employment Law Changes
Keeping up to date with changes in employment law is essential for all businesses, no matter how small. The pace of legislative change in recent years has been significant, and employers who fail to stay informed can easily fall out of compliance without realising it.
From April 2024, several key legal changes came into force that affect how you manage your workforce. These aren’t optional best practices; they are statutory requirements, and failing to apply them correctly can leave your business exposed to claims and penalties.
Some of the key 2024 updates include:
- The Employment Relations (Flexible Working) Act, effective from April 2024, gives employees the right to request flexible working from day one of employment (previously 26 weeks). Employers are now required to consult with the employee before rejecting a request and respond within two months instead of three.
- Protection from Redundancy (Pregnancy and Family Leave) Act extends redundancy protection for employees on maternity, adoption, or shared parental leave. This protection now begins from the moment an employee informs you of their pregnancy and continues for 18 months after birth or adoption.
- Carer’s Leave Act introduces a new statutory right to unpaid leave for employees with caring responsibilities. From April 2024, eligible employees are entitled to one week of unpaid leave per year to care for a dependent.
- Neonatal Care (Leave and Pay), Act establishes the right to paid leave for parents whose babies require neonatal care. It can be used when the baby is no longer receiving neonatal care, for example, at the end of maternity leave.
Failing to reflect these changes in your contracts, handbooks, and day-to-day HR practices could lead to formal legal challenges, so at Access2 Human Resources we monitor legal developments for you and make sure your documentation is always up to date. As part of our HR Premium package, we provide regular updates on employment law changes, revise your policies and contracts accordingly, and guide you through any necessary changes to your internal processes.
How can Access2 Human Resources Help?
We specialise in HR for SMEs, offering straightforward, professional and legally sound advice that’s tailored to your needs, with affordable packages designed especially for small businesses.
No jargon. No hidden costs. Just practical HR support that makes your life easier.
Call us on 01722 325833 to book a FREE meeting with an HR professional to see how we can help.
Or email us at info@access2hr.co.uk