The 1 October saw a flurry of new employment legislation come into play that could have serious repercussions for businesses if not enforced correctly. So how can HR professionals stay on top of the legal paper mountain? Louise Druce finds out.

Even for HR professionals who were well prepared for the raft of employment legislation that came into force on 1 October, staying on top of it all can be challenging as the full effects are felt in the months to come.

To give a taster of what’s in store, the Age Discrimination Act has just passed its one year anniversary and, according to research from international recruitment firm Badenoch & Clark, nearly half of UK employees still think discrimination exists in their industry, leaving firms wide open to the risk of expensive tribunal claims.

Two of the most significant new laws affecting workers that came into force on 1 October are increases in holiday entitlements and the national minimum wage. The changes to annual leave, which aims to bring the law in line with EU standards, has probably caused the most furore over costs and operational issues as it gives employees the right to 4.8 weeks off (including public holidays), further increasing to 5.6 weeks from 1 April 2009.

But the main challenge, when any new law comes in, is raising awareness at all levels throughout the company and watching out for any subsequent changes or updates. Simply keeping a note of it in an HR file is unlikely to hold sway in a legal case should any issues arise.

“Employers can easily be tripped up by a lack of knowledge about new developments,” says Gillian Dowling, employment technical consultant at business consultancy Croner. “In small and medium sized businesses especially, where there is no formal HR function, legislative changes are just another burden which the employer has to face alone unless they have access to support.

“It’s not just finding out about the changes to the law but working out how it affects your particular business and how you are going to manage it, which is a concern for employers.”

Dust off the handbook

The first port of call is checking and updating all employee documentation, including (where necessary) individual contracts and the staff handbook.

For example, Sikin Andela, partner in the employment unit at Glovers Solicitors, says as the minimum wage and holiday entitlements are not detrimental to the employee, they will not need an amended contract. However, a letter does need to be sent to all those affected by the changes no later than one month after the law has come into force.

And while annual leave entitlements may seem straightforward when it comes to bank holidays, appearances can be deceptive. “In industries where the business is likely to be open on bank holidays, there is a potential issue with paying premiums for working on these days,” explains Andela.

“For example, the employee’s contract may state they are entitled to 20 days’ holiday excluding bank holidays but those bank holidays (if worked) will be paid at twice their normal salary. If an employer tried to amend this so that the employee is entitled to 24 days’ holiday but that the bank holidays worked will be paid at the normal rate, this is potentially a detrimental change and the employee could potentially bring a claim for constructive unfair dismissal.”

Firms who want to take more of a best practice approach need to make sure all information is communicated effectively to staff via e-mail, intranet, newsletters etc. There may also be call for more training, straight off the bat from an employee induction, according to Jonathan Mansfield, partner at employment law experts ThomasMansfield.

“As seen with the age discrimination law, HR needs to review changes and how they are briefing managers, first of all at the recruitment stage and also making sure they are aware of the issues throughout employment,” he says.

Stuck in the middle

Mansfield claims one of the biggest problems HR has to deal with is inertia at the management level, particularly middle management. Yet, they play a crucial role in being the first to spot any contentious problems that arise. “It’s about really making management aware and encouraging them so that the policies and procedures are properly understood by the people under them,” he continues.

“You not only have to make sure there are the right words within the policy, you have to go beyond that and make sure there is proper training so that employees are fully aware of the implications.”

Mansfield advocates checklists, for example, so there are records of who has read a copy of the current policies in place and that they have been easily understood. This can then be followed up by training sessions to raise awareness on a practical level.

The added advantage for senior management is that they know everyone has received the same information as, very often, they are the last people to know that policies are being breached until it’s too late and the employee has decided to take the matter to tribunal stage.

“With any discrimination law, an employer can be fixed for liability for something that happens even when they are not present,” Mansfield explains. “For example, if someone is harassing [a colleague] at work and making jokes about their age, if that person gets fed up with it and decides to act, the company could be liable unless they can show they have taken all reasonable, practical steps to prevent the situation from happening.”

Whilst Andela points out it’s unlikely an employee would object to increases in pay or holiday entitlement, HR still needs to be aware of any changes to their employment terms that they might be unhappy with. “This could potentially give rise to a claim for unfair dismissal or breach of contract if the employee then leaves or is dismissed from the job,” she adds.