Employment law can be complex, and even well-intentioned organisations can find themselves exposed to legal risk if HR processes are not kept up to date or followed correctly.
In this article, we look at some of the biggest employment law risks currently facing UK organisations today. Understanding where these risks can arise and having the right processes in place to manage them, can help employers prevent disputes and deal with employment law risks effectively.
Unfair Dismissal
Dismissal can lead to costly claims if the correct process is not followed. Employers should have a fair reason for dismissal and follow a reasonable procedure, including appropriate investigation, meetings and opportunities for the employee to respond.
With changes to unfair dismissal rights due to take effect in January 2027, reviewing dismissal and performance management processes now is important, particularly when considering employment law risks for employers.
Discrimination & Equality Risks
Discrimination claims can arise at any stage of employment, from recruitment to dismissal. Employers must ensure that decisions are not influenced by protected characteristics and that managers understand their responsibilities under the Equality Act 2010.
Risks can also arise from failing to make reasonable adjustments for disabled employees, overlooking potential discrimination in workplace practices or allowing inappropriate behaviour to go unchallenged. Clear policies, effective training and consistent decision-making can help employers reduce these employment law risks.
Failure to Prevent Sexual Harassment
Employers have a responsibility to take ‘reasonable steps’ to prevent workplace sexual harassment and to act appropriately when concerns are raised. Organisations should ensure employees and managers understand what constitutes harassment, provide appropriate training, have clear reporting procedures and investigate concerns promptly and fairly.
Failure to take effective steps to prevent or address sexual harassment can expose employers to significant legal, financial and reputational risk, making it an important consideration when managing employment law risks for employers.
Sickness Absence & Disability
Managing sickness absence can present significant legal risks, particularly where an employee has a disability or long-term health condition. Employers should consider whether reasonable adjustments are required and avoid making assumptions about an employee’s ability to work or return to work.
Decisions relating to absence, capability or dismissal should be considered on an individual basis, supported by appropriate medical advice where necessary, and handled fairly and consistently to help reduce employment law risks.
Poor Disciplinary & Grievance Procedures
Even where an employer has legitimate concerns about an employee’s conduct or performance, failing to follow a fair and consistent process can increase the risk of a claim. Issues can arise where allegations are not properly investigated, employees are not given a reasonable opportunity to respond, or decisions are made before all the relevant information has been considered.
Employers should ensure disciplinary and grievance procedures are clearly documented, consistently applied and aligned with the Acas Code of Practice where relevant. Managers should also understand their role in following these procedures and know when to seek HR advice to help manage employment law risks for employers.
Keeping up with Changing Employment Legislation
One of the biggest challenges for employers is keeping policies, contracts and day-to-day HR practices up to date. Changes to employment legislation can affect areas such as statutory payments, family leave, flexible working, dismissal procedures and employee rights. Staying up to date with these changes is essential for managing employment law risks.
Simply having policies in place is not enough. They must reflect current legislation and be applied correctly in practice.
Reducing the Risk with External Support
Many employment disputes can be avoided by having clear and up to date contracts and handbooks, well-trained managers and consistent HR processes. Taking these steps can help organisations identify and manage employment law risks for employers.
Keeping up with employment law changes can be challenging, particularly for small businesses. EML can provide practical advice, help you review current processes and give you greater confidence that you are meeting your obligations. Contact EML on 01942 727200 or email enquiries@employeemanagement.co.uk to find out how we can support your organisation.
