One of the most important parts of an HR department’s work is to ensure compliance with the law. As there is an extensive list of regulations that govern the relationship between employer and employee, the responsibility for making sure that the employer is fulfilling his/her obligations falls upon the shoulders of the human resource manager. HR compliance helps companies avoid fines and penalties, and build a more positive organisational culture based on fairness.
The cornerstone of a successful HR compliance strategy is remaining current with every new rule and regulation. To do that you can closely follow employment law or you can hire an external counsellor to get advice on what changes you need to implement.
Every employer is obliged to follow the laws and regulations set out by the government. But, HR compliance should not be seen just as an obligation, rather it should be treated as a process of shaping the behaviours of both the employee and the employer. In fact, when HR compliance is integrated with a company’s core values it can be seen as a way to effectively boost the organisation’s employment brand.
Sources of employment law
Employment legislation in the UK has traditionally been governed by three sources. Common or contract law, statutory law and European law. But, with Brexit, it looks like European law will have little say over employee rights in the UK, so let’s take a look at common and statutory law:
1. Common law
Common law refers to contracts. Almost all employees in the UK are required to work under a contract, whether that is written or not. Certain rules and regulations govern contract law that need to be agreed by both the employer and the employee. Unless an employee agrees to regulations included in their contract they should not be expected to fulfil them.
What’s important to note is that common law does not surpass statutory law and cannot in any way undermine it. For example, according to government legislation, every employee is entitled to 28 days of paid leave per year. This is the minimum number of paid holidays a UK worker is allowed and contracts should not, in any way undermine it, i.e. an employer is not allowed to only offer 20 days of paid leave. But, they are allowed to offer more if this is stated in the contract.
Whereas statutory law is the bare minimum of what an employer can offer their employees, contract law includes the kind of work experience employers want to offer. If creating a positive organisational culture is one of your priorities you need to ensure that the necessary steps are included in the contract.
If you are interested in rewarding employees with a performance-based bonus each year, it should be written down in the contract. The more comprehensive the contract you are offering is, the more employees will know what to expect. If you clearly spell out their obligations and rights, it will help create fewer problems in the long run.
2. Statutory law
Statutory law refers to the legal rights passed by the Parliament, and it is there to protect employees. Most workers in the UK are governed by statutory law and as an HR manager, it’s essential that you remain vigilant of any new regulations as they are an integral part of HR compliance.
Statutory law covers everything an employer needs to do to keep their employees safe and improve their quality of life. Some of the legislation covered by statutory law is:
- National minimum wage
- Paid leave
- Paid time off for trade union duties
- Paid Maternity/Paternity/Adoption Leave
- Not to be discriminated against
- Maximum of 48 hours work-weeks
- Notice of dismissal
If you want to find out more about employee rights, take a look at this comprehensive guide we’ve built.
The two pillars of effective compliance programmes
HR compliance policies need to be well structured and clear as this can help build a more efficient workplace where both management and employees can collaborate more effectively. Employees who know exactly what is expected of them and how they will be rewarded are not only more motivated, but they are also much effective at work.
As you can see, investing time and effort into building tools that will help the department be more compliant is worth it.
The employee handbook is perhaps the most important tool in ensuring compliance as it clearly states what rules and regulations the organisation abides by, while it clearly communicates what is expected from employees based on common law.
What’s more, the employee handbook can help protect organisations from unjust employee claims as it’s responsible for clearly stating the responsibilities and duties of both parties. Of course, to make the most of it, it’s important to invest effort in producing an employee handbook that’s top notch and leaves little room for misunderstandings and second guessing.
An employee handbook can help introduce new employees to an organisation, its culture, mission and values and as such can help speed up the adjustment period. It also communicates to existing employees exactly what is expected of them.
1. Avoid jargon
It might seem like a good idea to use legal language; the truth is that an employee handbook does not need to be formal. It should be written in a way that’s straightforward and friendly because it represents your company culture.
2. Keep to reasonable rules
As we’ve discussed time again, organisations that value their employees and actively try to create positive workplaces are much more efficient. As such, it’s important to use the company’s employee handbook to promote this culture and one way you can go about doing that is by not implementing unreasonable rules.
3. Be consistent
Ensuring that your rules are consistent is often more important than producing long lists of rules. It’s important to the HR department to include different scenarios and exceptions to the rules so that they remain consistent.
HR audits are conducted to determine whether organisations are keeping up to date with employment legislations. They are comprehensive methods that are performed externally and review policies, procedures and documentations.
External auditors are also beneficial because they can review your internal policies and see how integrated they are with core company values. This can be great at helping you identify areas where the company needs to improve or focus on, while it can also help you identify areas that you need to update.
Areas the audit needs to include:
- Hiring and Onboarding
- Benefits and Perks
- Performance Evaluation
- Termination Processes
HR compliance is not just mandatory by the law; it’s also a discipline that can significantly assist companies in creating a positive environment where people feel inspired. Remaining current with the legislation can also help protect companies from employee claims it also assists in developing effective HR policies and strategies.
How do you ensure compliance with the law in your company? Let us know in the comments section below.