Damage Limitation: Businesses must maintain accurate documentation on employees

Proper documentation is essential to laying a good foundation for employment decisions and it protects your company from paying unnecessary damages later if a complaint is taken to tribunal. Employers must maintain good documentation for every employee concerning every aspect of the employment relationship from hiring to evaluations, discipline and termination. Thorough, precise and honest documentation may deter potential claimants and their lawyers.

The latest published employment tribunal figures show a rising trend in claims with a total of 132,577 (Apr -March 2007) compared with 115,039 in the previous year. Half of these claims were for unfair dismissal or breach of contract. The average award for unfair dismissal in 2006 was 8,670 up from 7,303 in 2005. This is a huge cost for a business to pay especially when some of these cases could have been avoided in the first place if thorough documentation and procedures were in place.

In many cases organisations simply donít have the time or the resource to ensure documentation is up to date and accurate and that procedures are followed through. Even if an HR resource is available, mistakes can easily be made. Organisations simply canít afford to get this wrong and itís crucial that the following points are taken into consideration if employers are to avoid large and costly litigation damages in the future:

Employers need to be aware that the moment an applicant unconditionally accepts a job offer a contract of employment comes into play. The contract can provide evidence of the terms and conditions of employment between you and the employee if there is a dispute later on.

Employers must maintain all documents concerning an employee from the start of employment right through to the end. In the event that litigation cannot be avoided, the documentation can be an invaluable resource in the defence of Claims lodged.

Itís vital that you seek advice from a solicitor, to check that both your employment contracts and handbooks are complying with employment regulations and covering all areas and that you are keeping things up to date. You also need to ensure that changes to working hours and salaries are updated in the terms of employment.

If you are in the process of disciplining or dismissing an employee legal advice is a must. Dismissing employees is a difficult and sensitive process, and should always be approached with caution. There are a number of acceptable reasons for dismissing an employee. Gross misconduct or repeated minor misconducts, or an employee failing to effectively carry out their job over a period of time are all legitimate reasons for dismissal.

Only in severe cases of gross misconduct should an employee be dismissed without warning. Even then, they should first be suspended with pay, while an investigation into the accusation takes place. The employee should be given a chance to answer the accusations, and only then should a final decision on disciplinary action or dismissal be made. Refusing to give the employee a chance to explain their side before sacking them could leave you open to an unfair dismissal claim. A company should also make its standard disciplinary procedure available to its employees: The Employment Rights Act 1996 says that employers should provide written information for their employees on the disciplinary rules and procedures.

Whether a company has an internal HR representative or not, itís vital to consult with an employment lawyer to ensure that the company procedure complies with legislation. This will ensure that there are no loop holes that the company could fall through at a later date.

Taking steps such as these are relatively insignificant from a financial point of view when you consider how much you could potentially loose if litigation went forward. The national increase in the number of employment tribunals is a warning to companies that they need to be fully prepared for possible claims, and that keeping up-to-date with ever-changing legislation is essential for a prosperous business.

How to minimise costs in recruitment during a downturn
Attend the Online Recruitment Conference & Exhibition on 3rd June 2008
www.onrec.com/june