What is HR compliance? Essentially, it’s a process that allows a business to check that it complies with all relevant labour laws, regulations, and occupational health and safety (OHS) standards. In the UK, HR compliance has become an important task because of the high level of complexity in employment legislation that has emerged over the years, as well as the risk of a company and its directors facing a penalty for non-compliance, including financial penalties, litigation, and reputational damage. Whether you’re a small business owner, the HR manager in a large company, or even a manager overseeing the employment-related activities of the business, knowing about HR compliance in the UK is crucial.
This guide covers the main areas of HR compliance in the UK, from employment contracts and health and safety legislation to data protection and equality standards. In this way, companies can use these guidelines to deliver a fair, safe, and legally sound workplace.
Understanding HR Compliance in the UK
Employee relations in the UK is an incredibly complex area of HR compliance that requires employers to adhere to a range of different employment laws to protect both the employer and worker, prevent discrimination, and ensure a safe working environment. HR compliance, for instance, requires that an employer follow statutory guidelines set out in Acts of Parliament, such as the Employment Rights Act, as well as guidelines that form part of accepted best practice, such as those set out by professional bodies, including the Chartered Institute of Personnel and Development (CIPD). The key areas of HR compliance include:
Employment Contracts and Terms of Employment
Every employee in the UK is entitled to receive a written statement of employment particulars. The statement specifies the main terms and conditions of the employment relationship, for example, the title of the job, the pay, the hours of work, the annual leave entitlement, and the length of the notice period.
UK law requires that the written statement be provided to the employee within two months of the employee commencing work. Key Components of an Employment Contract:
Job Title and Description: Clearly define the employee’s role and responsibilities.
Salary and Benefits: Specify the employee’s pay, including any bonuses or other financial incentives.
Working Hours: State the employee’s regular working hours and any expectations regarding overtime.
Holidays: All staff in the UK are entitled by law to at least 5.6 weeks of paid holiday per year, including bank holidays, which add on another eight days.
Periods of Notice: State the periods of notice that an employer and an employee must provide if the contract is terminated.
Contracts may also include provisions concerning confidentiality, intellectual property, and restrictive covenants such as non-compete clauses. Employers must ensure that all employment contracts comply with the Employment Rights Act 1996 and other relevant legislation.
Employee Rights and Protections
The law in the UK to protect employee rights is robust, and HR professionals are responsible for ensuring compliance with these protections.
The fundamental rights enjoyed by employees are laid out in the Employment Rights Act 1996 and include:
National Minimum Wage: Employers must pay at least the national minimum wage, depending on age and whether the employee is an apprentice or not. For instance, ÂŁ11.00 per hour for workers aged 23 and over, ÂŁ10.18 per hour for workers aged 21 to 22, and ÂŁ7.49 per hour for workers aged 18 to 20.
Hours and overtime: Under the Working Time Regulations, full-time employees’ hours cannot normally exceed an average of 48 hours per week (there are ways to opt out of this if both you and your employer agree). Any overtime must be paid at a premium rate.
Holiday: Employees are entitled to 5.6 weeks of paid holiday per year.
Sick Pay: Statutory sick pay (SSP) can be paid to employees who are too ill to work. Employees can receive SSP for up to 28 weeks. Employers need to make sure they meet the legal requirements for paying SSP.
Parental Leave and Flexible Working Regulations: The parental leave and flexible working regulations provide parents and caregivers with the right to take time off work or flexible working, and employers are obliged to consider such requests seriously.
Health and Safety Compliance
Health and safety are other vital areas of HR compliance in the UK. The general duties of employers are laid down in the Health and Safety at Work Act 1974, which sets out the steps employers must take to ensure the health, safety, and welfare of their employees.
The Health and Safety Executive (HSE) is responsible for enforcing these regulations, and getting things wrong can mean penalties, including fines and, for serious breaches, imprisonment.
Risk Assessments: Employers should conduct a risk assessment as a process to determine the existing hazards in a workplace and adopt preventive and protective measures.
A safe work environment: Employers must keep the workplace safe and secure, such as by ensuring that all equipment is maintained and that employees are well-trained in regard to health and safety practices.
First aid: appropriate first aid provisions in the form of first aid kits and trained first aid personnel.
Reporting of Injuries, Diseases, and Dangerous Occurrences (RIDDOR): The HSE must be notified by employers of certain work-related injuries, illnesses, and near-misses.
Keeping up with health and safety standards is as much about being a responsible employer as it is about being legal. If you are a business owner, check that your health and safety measures are up to date and that you are aware of any new regulations that affect your workplace.
Data Protection and GDPR Compliance
Ensuring data protection has become a key part of HR compliance in light of digital technology, as the General Data Protection Regulation (GDPR), which came into force in 2018, stipulates what businesses must do in order to collect, process, and store private data.
This includes employee records, which include personal information, payroll details and performance appraisals, to give an example. Employers need to obtain employees’ express consent to gather and process their data.
Data Storage: Employee data must be securely stored and controlled, and employers should make sure that only approved personnel can access that information.
Data retention: Employers should retain only data necessary for the purposes for which it was collected for as long as required and should have policies on data retention and destruction.
Employee Rights: GDPR grants employees the right to request access to their data, correct their information, and request erasure of their data.
Data Breaches: Employers must report data breaches to the Information Commissioner’s Office (ICO) within 72 hours.
Companies face penalties of up to £17.5 million—or 4 percent of global turnover, whichever is greater—if they don’t comply with GDPR. As a result, HR functions must put in place strong policies and practices to ensure that they are able to comply with the legislation.
Equality and Anti-Discrimination Laws
The UK has robust provisions against discrimination at work, and an HR system must comply with the law. The Equality Act 2010 is the central piece of legislation governing equality and non-discrimination in employment.
It prohibits discrimination through one of the protected characteristics listed in the legislation:
Recruitment: Employers should ensure that their recruitment processes are not biassed and that they do not discriminate against applicants on the basis of their protected characteristics.
Equal Pay: Men and women doing the same or similar work must not be paid different amounts.
Sex Discrimination: Sex must not be used as a reason for discriminating between men and women when providing goods, facilities, and services.
Family Responsibilities: It is unlawful to discriminate against someone on the basis of their family responsibilities.
Harassment: It is unlawful to harass anyone, whether a man or a woman.
Religion or Belief: It is unlawful to discriminate against anyone on the basis of their religion or belief.
Sexual Orientation: It is unlawful to discriminate against anyone on the basis of their sexual orientation.
Age: It is unlawful to discriminate against anyone on the basis of their age.
Disability: It is unlawful to discriminate against anyone on the basis of their disability.
Race: It is unlawful to discriminate against anyone on the basis of their race.
Pregnancy and Maternity: It is unlawful to discriminate against anyone on the basis of pregnancy and maternity.
Reasonable Adjustments: Employers must make reasonable adjustments for disabled employees to avoid placing them at a disadvantage at work.
Harassment and victimisation: The employer must take steps to prevent harassment and victimisation in the workplace and to provide procedures for reporting and dealing with such harassment and victimisation.
Compliance with the Equality Act: Compliance with the equality act will not only help an employer avoid legal disputes. Still, it will also create an environment that is safe and supportive for a diverse workforce. Employers need to conduct regular audits of their policies and procedures to ensure that their obligations under the law are met.
Termination and redundancy procedures
Managing termination and redundancy is also crucial in the UK, and employers need to be aware of the correct procedures that must be adhered to in order to avoid claims of unfair dismissal or any other unlawful treatment.
Termination Procedures: Period of Notice Employers need to provide the minimum period of notice as per the contract of employment or statutory provisions.
Disciplinary Procedures: Before a worker can be dismissed for misconduct or poor performance, the employer must follow a fair procedure. This means that the worker will receive warnings, a disciplinary hearing, and the chance to appeal.
Settlement Agreements: Sometimes, employers will use settlement agreements to exit an employment relationship. Lawyers should review the terms of any proposal to ensure that they are fair and legal.
Consultation: Employers must consult with employees and, if they are unionised, with the relevant trade union before any redundancies are carried out, in particular about the reason for redundancy and any alternative to redundancy.
Selection criteria: When employers choose employees for redundancy, they must use objective and fair criteria to avoid discrimination claims.
Entitlement to Redundancy Pay: Employees who have worked for a company for two years or more are entitled to statutory redundancy pay, calculated in accordance with age, length of service, and weekly pay.
Employers must follow the correct formalities to avoid being subjected to expensive litigation, including claims of unfair dismissal or wrongful termination. Employers should be aware of the legal procedures that need to be followed. Where necessary, they should seek legal advice.
Best Practices for HR Compliance in the UK
To avoid violating the UK laws on work, HR professionals should implement the following:
Get Up to Date with Employment Law: This is a fast-moving area of work, so HR teams must ensure that they keep abreast of the latest changes and developments by attending regular training and maintaining membership in professional organisations such as the CIPD.
Audit HR policies and procedures regularly: Employers need to audit HR policies and procedures on a regular basis to make sure they are compliant with the law. Examples include employment contracts, health and safety policies, data protection policies, and equality practices.
Train Managers and Employees: Organisations should provide training for managers and employees about their rights and responsibilities under UK employment law. This would help keep them informed about compliance requirements and help avoid compliance issues from arising.
Keep Up to Date with Employment Law Changes: Organisations should keep up-to-date with the latest employment law changes in the UK. This would help to keep them informed about compliance requirements.
Obtain Legal Advice: Organisations may choose to seek legal advice from a solicitor or other legal expert in UK employment law to ensure that they understand their compliance requirements.
Comply With Employment Law: Organisations should take steps to ensure that they comply with the requirements of UK employment law. This could involve ensuring that they follow the correct procedure when dismissing employees.
Report Up-to-Date Policies to the Board: Organizations should report to their board about how they are keeping up to date with the requirements of UK employment law.
Assess Employees’ Attitudes: Organisations should assess their employees’ attitudes towards workplace issues, such as bullying and harassment, and how they can be prevented.
Consult a Lawyer if Necessary. Employment law is complex, and there will be times when you need to consult a lawyer to get the right advice. Don’t be afraid to seek help if you have a complex matter to deal with, such as making redundancies, a discrimination claim, or a disciplinary case.
Design a Culture of Compliance: HR compliance is more than just compliance; it is a workplace culture that embraces fairness, transparency, and respect for the law. Employers can design a culture that supports employees and their commitment to compliance with legal requirements.
Conclusion
In the UK, in particular, HR compliance is a complex, ever-developing area that requires organisations to keep up with a myriad of employment laws and regulations. The Employment Rights Act, for example, means that HR professionals must make sure all employment contracts comply with its requirements. Meanwhile, the GDPR dictates how an organisation must handle personal data, while health and safety legislation also impacts the HR function.
With a grasp of the critical HR compliance issues, a knowledge of the ever-evolving legal landscape, and a bunch of best practices, you can create a safe, equitable, and legally compliant work environment. That means avoiding the risk of costly legal disputes and benefiting from an environment in which employees feel valued.
After all, HR compliance is a fundamental element of creating prosperous and sustainable businesses in the UK. Employers who put compliance at the heart of organisational culture will prioritise fairness. This will serve to protect their business and their critical asset: their people.