The biggest legal risks to business owners (and how to avoid them)

James Potts - Legal Services Director

August 17 2022

As an employer, you shoulder a lot of responsibility. Staff safety, job security, legal compliance…it’s a lot for anyone.

And if there is an accident, a discrimination claim, or a data breach, the onus is on you. That’s why you need solid HR policies and procedures to stay safe and successful.

Not sure where to start? Read on to discover the biggest risks to your company and how you can protect yourself…

1. Injuries and accidents at work

No matter what line of work you’re in, there’s always a risk of accidents. At any time, your worker could trip up and fall, or injure themselves whilst using machinery.

If you breach health & safety regulations, you may have to pay out hefty amounts of compensation if your worker hurts themself on the job.

So, make sure you take precautions to help minimise the risk of accidents and keep your staff safe. This should include:

  • carrying out regular risk assessments - check for physical hazards that might cause injury, and any mental hazards, like long hours or a heavy workload that could lead to psychological distress
  • providing regular up-to-date training - teach your staff to carry out tasks safely to minimise the risk of them hurting themselves and others
  • providing PPE – depending on your industry, you may need to provide personal protective equipment (PPE) like safety glasses, protective clothing, or hard hats

You also need a watertight health & safety policy.

Your health & safety policy should outline the measures you have in place to protect staff. This helps you keep accidents at bay and stay legally compliant with HSE regulations – to avoid facing hefty fines or prosecution.

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2. Discrimination and harassment claims

It’s important you take steps to prevent discrimination in your workplace.

Discrimination is treating someone unfairly – either directly or indirectly - for any of the following reasons:

  • age
  • disability
  • race
  • sex
  • marriage and civil partnership
  • sexual orientation
  • gender reassignment
  • maternity
  • religion or belief

Equality law protects these characteristics. So, if someone does treat a co-worker unfairly for any of them, they’ll be breaking the law.

You can help reduce the risk of discrimination in your workplace by:

  • providing anti-discrimination training to staff – teach them what discrimination is, how it can happen, and the types of behaviour you won’t accept
  • outlining how staff can report incidents – make sure you have a process for staff to report any incidents of discrimination they experience or witness
  • having an up-to-date equality and diversity policy – this should outline the steps you take to make your workplace inclusive and protect staff from discrimination

If your worker makes a discrimination claim and you don’t have a policy or can show you followed any procedures to prevent it, you’ll be at legal risk.

Prevent workplace discrimination

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3. Data breaches

Data breaches can lead to fines, broken trust, and irreparable damage to your reputation.

And almost 90% of data breaches occur due to human error, according to studies.

It’s rare for a hacker to break into a system out of nowhere. Usually, it’s down to an unsuspecting employee clicking a dodgy link in a phishing email.

As a company, you have a legal duty to store sensitive data safely and securely. You might have a lot of personal information about staff and clients on your systems - and you do not want that finding its way into the wrong hands…

That’s why you need to:

  • educate staff on the most common threats – make sure your staff know what cybersecurity threats to look out for and how to avoid them
  • provide security awareness training – train staff to follow best practices that help defend them against data breaches, like creating strong passwords and using two-factor authentication
  • establish a protocol – outline the steps staff need to take if they think there’s been a data breach
  • have a watertight data protection policy – this tells staff how you manage data and how they need to act to maintain your compliance with data protection law

So, if an incident were to happen, you’ve covered yourself.

4. Corruption

Corruption isn’t always sinister.

Sometimes, it happens accidentally, with the best of intentions.

For example, your employee might offer a client a gift in good faith. They might accept a gift in good faith. What they don’t realise is they’ve just engaged in an act of bribery. It’s as easy as that.

And if your company is liable for corruption, this can result in damaged staff relations, a bad reputation, and even prosecution.

So, to protect yourself from risk, you need to make sure you have:

  • an anti-corruption policy – establishing your zero-tolerance for bribery, what it actually is, and the consequences if staff get involved
  • anti-bribery training – your staff might not be aware that bribery can take many forms, so make sure they understand how it can present itself and how they should report it

By offering training and creating a watertight policy, you help keep staff in line and protect yourself in the eyes of the law.

5. Unfair dismissal claims

If you have to dismiss a worker, you’ll need to follow a formal procedure.

If you don’t, your former employee could make a claim for unfair dismissal, which is likely to end in costly legal pay-outs.

With the exception of gross misconduct, dismissal should always be a last resort. But if you feel you have no other choice, then make sure you:

  • follow a disciplinary process – if you’ve made a decision to dismiss an employee, you’ll need to be able to show you followed a fair process and justify your reason, or you’ll put yourself at legal risk
  • have a disciplinary policy – you should outline your disciplinary process in a policy all your staff have access to

If you follow a fair process for dismissing your employee and can prove it with a watertight policy, you’ll be legally protected against unfair dismissal claims.

Focus on your business, while your HR experts protect it

Without policies or processes, you open yourself up to legal risk, costly claims, and reputational ruin.

While it might seem like a lot of effort and stress to set them up, it’s necessary if you want to stay safe and legally compliant.

If you need help setting up policies, advice on how to navigate a staff challenge, or face2face support from an expert, you can either:

It’s better to stay safe. Because when you take steps to protect your company, you hold onto the success you’ve worked so hard to build. So, whatever your issue – no matter how big or small -  get in touch and we’ll sort it.

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