Employment law solicitors are warning companies to review their HR policies and handbooks as the economic recovery gathers pace.
Employers who have gone without recruiting for a significant length of time may be caught out by new changes to employment law since they last took on staff.
That risk could be compounded if firms have delayed recruiting for as long as possible in order to keep costs down, warn solicitors at law firm Coles Miller.
Overworked HR departments may be tempted to cut corners to get new staff in place as quickly as possible - and that could store up trouble in months and years to come.
The warning from Coles Miller follows latest data from the Confederation of British Industry (CBI).
CBI officials’ poll of 151 companies puts business optimism at its highest level in a quarter of a century.
Hotels, bars, restaurants, leisure firms and the professional services sector are all seeing higher than normal levels of business - and hiring more staff as a result.
Coles Miller employment law solicitor Neil Andrews said: “It is excellent news that companies are seeing increased business but this optimism must be tempered with some common sense caution.
“Employers who have not recruited for some time may suddenly find themselves having to take on large numbers of new staff - with HR policies and documentation that may not have kept pace with all the changes over recent years.”
Holiday pay entitlement is just one change that could have very large and expensive ramifications - particularly for employers who rely heavily on a commission-based remuneration structure.
Employers must now take into account commission when calculating holiday pay entitlement. It follows a ruling by the European Court of Justice (ECJ) in the case of Lock v British Gas Trading Ltd C-539/12, 22 May 2014.
The court ruled that workers should not suffer detrimental treatment for taking annual leave. Its judgment means that the UK’s Working Time Regulations may have to be amended.
Mr Andrews said: “Judgments such as this are a prime example of why companies must keep their HR documentation and policies up to date.
“Failure to do so could be very costly in the long run. It really is a case of a stitch in time saving nine,” he added.
Dorset-based Coles Miller has one of the largest teams of commercial solicitors in the Bournemouth and Poole conurbation.
Their employment law work includes advising on holiday pay entitlement, equal pay claims, TUPE, unfair dismissal, discrimination claims, restrictive covenants, health and safety, data protection and business reorganisations.
The commercial team can also assist with start-ups, mergers and acquisitions, partnerships, joint ventures, MBOs and MBIs, contracts, commercial property conveyancing, litigation and dispute resolution, debt recovery and marine law.
Coles Miller also acts for clients all over the UK in cases involving interest rate swaps.
Coles Miller has 14 Partners and 115 staff. They are based at five offices in Bournemouth, Poole, Broadstone, Charminster and Wimborne.
For more information, contact Coles Miller LLP on 01202 673011.