The right side of the law

Employment law is complex. Frequent changes and amendments make it hard for busy employers to keep abreast of their responsibilities.

However, ignorance is no defence and, should you fall foul of employment legislation, there can be significant consequences.

The scope of employment legislation is vast, covering not only recruitment and treatment of staff during their time with the company, but also dismissal, redundancy and retirement. In recent years we have seen the EU Working Time Directive implemented under UK law and rules on discrimination progressively tightened - so it's no surprise that many employers struggle to stay abreast of new and existing legislation. However, failure to do so can be costly.

Employment law guarantees a fair and safe working environment for employers and employees. It governs the relationship between the employer and employee from the recruitment stage, when individuals are not yet employees, to post-employment discrimination and harassment, when individuals are no longer employees.

Well-drafted documentation - from contracts to handbooks and written policies - play a vital role in setting out the obligations and standards expected by you as an employer and your employees. Transparency is vital, not only relating to working time and holidays (which are governed by the Working Time Regulations 1998), but also the smaller yet potentially contentious issues, such as the acceptable use of the internet during working hours and absence reporting procedures.

Equality in the workplace ensures that everyone has equal opportunities and cannot be denied promotion or training for prejudicial reasons. Employers cannot discriminate against employees because of age, gender, nationality, pregnancy and maternity leave, sexual orientation, disabilities, race, ethnic background, religion and beliefs.

Good record keeping should extend to areas such as recruitment and promotion, to help guard against claims of discrimination. An individual's failure to secure employment or a promotion on the alleged grounds of age, gender, disability or race etc, may result in a claim for compensation. Documentation explaining the reasons why certain decisions were made will help you defend erroneous claims.

Unfair dismissal claims account for a large percentage of employment tribunal claims so it's vital that dismissals comply with employment legislation and satisfy one of the five potentially fair reasons for dismissal set out in the Employment Rights Act 1996 - conduct, capability/ performance, redundancy, statutory restriction and some other substantial reason.

One of the biggest legislative changes in recent years was the abolition of the default retirement age. On April 6, 2011 it became unlawful to dismiss an employee based on their age as it amounts to direct age discrimination under the Equality Act 2010. While it is an ageist assumption that older workers perform less well than their younger colleagues, most employers have experience of some employees' performance 'tailing off' for a variety reasons, particularly in more physically demanding jobs. However, where previously employers could lawfully retire employees who were beginning to 'tail off'', they must now look at one of the five potentially fair reasons to dismiss long-serving employees who are no longer capable of fulfilling their role. Employees, who once used to retire with a golden carriage clock and their heads held high, now have to face the indignation of capability proceedings and a 'dismissal' on the records.

Understanding employment law is crucial for both employers and employees. Treating employees well by implementing clear terms and conditions will reduce the likelihood of legal actions. Compliance with the law also reduces the chance of any legal action being successful.