How to Reduce Risk of Legal Claims in Your Business

Running a business is a juggling act that requires steady hands, a clear mind, and thorough understanding of your legal responsibilities to your customers and employees. Sometimes, due to lack of knowledge or negligence, things slip through the cracks and lead to employees filing legal claims.  

Litigation can be one of the most crippling things to happen to a business. Some of the most common legal claims in employment include:  

• Ministry of Labour claims 
• Civil claims for wrongful dismissal or constructive dismissal  
• Health and safety claims 
• Human rights claims 
• Workers’ compensation claims 

Knowing the steps to take to avoid legal claims in employment, can save your business thousands of dollars, prevent wasted time in court proceedings and protect your business’ reputation.  

Here are five things employers should do to reduce their risk of legal claims.  

Create watertight employment contracts

Employment contracts help to provide clarity about the terms of the relationship agreement. A good contract outlines the employee and employer responsibilities and avoids confusion. It should also detail the employee’s salary, benefits, disciplinary procedures, end-of-contract/termination clause, and more.  

Develop protection policies to cover your business

Thorough, clearly written policies are the foundation of your business. They are a good way to manage expectations within the company and mitigate risks. They should include legally mandated policies for your jurisdiction to ensure compliance and clearly communicated when onboarding each employee.  

It is also recommended that employers create additional company-specific policies to lower their legal risk. Some of these policies include: 

• Drug and alcohol policy – This policy sets the precedence for zero-tolerance for drug and alcohol use in the workplace. Employers must, however, be careful not to discriminate against employees who may be struggling with addiction as this could also lead to claims.  
• Disciplinary policy – Clearly outlines a procedure for handling employee wrongdoing. This could range from formal warnings to termination.  
• Absenteeism policy – If an employee is routinely late or absent for work, this policy ensures that they understand the behaviour is unacceptable and the disciplinary actions they could possibly face. 
• Social media and mobile policy – Your employees should know what is and isn’t acceptable when it comes to their online presence. Employees are a reflection of the company. Having a policy that clearly states what is unacceptable online behaviour leaves little room for misunderstanding or ambiguity. 

Provide training and education for employees

Employees at different levels will require different training depending on their job functions and responsibilities. However, training employees and managers on workplace behaviour, legal compliance, and company policies will help to mitigate risk. Some training programs you can implement are: 

• Employee Handbook Overview 
• Workplace Violence, Harassment & Discrimination 
• Interpersonal Relationships 
• IT Training 
• Leadership Training 

Health and safety training is also mandatory for some industries in Canada. Inadequate or improper health and safety training can lead to accidents and injuries, costly fines, stop-work orders and loss of hours, and costly insurance claims. 

Keep detailed records

Maintaining detailed and thorough documentation of the business operations is crucial. This includes certifications, employment records, employee performance, and records of disciplinary actions.  

If an incident was not properly documented, it can lead to later confusion about what took place and the recommendations or decisions on the way forward. Proper record-keeping also helps to prevent litigation, manage performance, and ensure you meet legislative obligations. 

Ensure you remain compliant

Every Canadian province has a set of minimum employment standards that employers must adhere to. There are some industries where exemptions may apply, however, generally, employers are governed by these minimum standards. Some examples include:  

• Minimum wage  
• Vacation time and or pay  
• Termination pay  
• Public holidays/public holiday pay 
• Overtime pay  

Do you need help creating policies or HR documentation for your business?

 The stress of running a business can sometime cause you to miss crucial documentation or processes that protect your business. Our expert legal and HR consultants can clarify any concerns you may have, create policies, or help you navigate current situations with employees. To learn more about how our services can benefit your business, call an expert today at 1 (833) 247-3652.