The legal aspects of employee management: What HR needs to know

Managing people is one of the most rewarding parts of running a business, but also one of the most legally complex. From recruitment to retirement, every stage of the employee lifecycle is governed by UK employment law.

Failing to meet your legal obligations doesn’t just lead to reputational damage, it can cost your business thousands in tribunal claims, fines, or staff turnover. Whether you have a dedicated HR team or manage employee responsibilities yourself, it’s essential to understand the key legal aspects of employee management.

At SafeHR, we support businesses with expert HR guidance and smart, compliant software to help you stay protected, save time, and focus on growth. Here’s what you need to know.

1. Employment contracts: Laying the legal groundwork

A legally compliant employment contract is not a ‘nice to have’, it’s a statutory requirement under the Employment Rights Act 1996. Every employee is entitled to a written statement of employment particulars on or before their first day of work.

This employee contract should include:

• Job title and description
• Start date and place of work
• Working hours and salary
• Holiday entitlement
• Notice periods
•  Grievance and disciplinary procedures
• Statutory benefits like sick pay or parental leave

Why it matters: A well-drafted contract defines the terms of the relationship, protects both parties, and reduces the risk of future disputes. It’s your first line of defence in the event of a legal challenge.

How SafeHR helps: Use our expert-drafted templates to quickly generate compliant contracts tailored to your business.

2. Right to work checks: Preventing costly mistakes

Before employment begins, employers must verify that the candidate has the legal right to work in the UK. This applies to every employee, regardless of nationality.

You must:

• Conduct right-to-work checks before the employee’s start date
• Check and copy original documents or use the Home Office online service
• Keep a clear audit trail

Failure to comply can result in civil penalties of up to £60,000 per illegal worker and potential criminal charges.

SafeHR tip: Our software supports streamlined onboarding and checklist tracking so nothing is missed.

3. Disciplinary and grievance procedures: Following the ACAS code

When issues arise, whether related to conduct, performance, or employee complaints, you’re legally obliged to follow fair procedures. The ACAS Code of Practice provides the framework—and while it isn’t law, Employment Tribunals take it very seriously.

Key requirements:

• Set out a clear policy for disciplinaries and grievances
• Investigate issues thoroughly and fairly
• Allow employees to state their case and appeal decisions
• Keep written records throughout

Risk of non-compliance: If you don’t follow a fair process, even a valid dismissal can be deemed unfair, leading to expensive tribunal claims.

4. Managing sick leave and absence lawfully

Employers must tread carefully when managing sickness absence. Employees may be entitled to Statutory Sick Pay (SSP), and if the illness is long-term or related to a disability, you may be required to make reasonable adjustments under the Equality Act 2010.

You also need to consider:

• Fit notes from GPs
• Return-to-work interviews
• Mental health considerations
• Absence trends and potential underlying issues

Why it matters: Mishandling sickness absence can result in discrimination claims or breach of contract allegations.

SafeHR insight: Our software allows you to manage absence, monitor trends, and document conversations to support compliance and wellbeing.

5. Working time regulations: Respecting limits and entitlements

The Working Time Regulations 1998 govern how many hours employees can legally work and what breaks they’re entitled to.

You must ensure:

• Employees do not exceed an average of 48 hours per week (unless they opt out)
• Minimum 11 hours’ rest between working days
• 20-minute breaks for shifts over six hours
• At least 28 days of paid holiday (including bank holidays for full-time workers)

Night workers are subject to additional rules, including health assessments and shift length restrictions.

SafeHR benefit: Use our tools to monitor working hours, manage leave, and avoid breaches of regulation.

6. Data protection: Handling employee information responsibly

Employees entrust you with sensitive personal data, from payroll details to health records. Under UK GDPR, employers must ensure this information is collected, processed, and stored securely and lawfully.

You must:

• Have a lawful basis for data processing
• Limit data collection to what’s necessary
• Store data securely and restrict access
• Provide transparency through privacy notices
• Respond to data access requests (DSARs)

Consequences of non-compliance: Breaches can lead to investigations by the ICO, significant fines, and reputational damage.

7. Fair dismissals and redundancies: Avoiding tribunal trouble

Ending employment, whether due to misconduct, capability, or redundancy, must be handled carefully.

To avoid claims for unfair dismissal, you must:

• Have a legally valid reason
• Follow a fair and consistent process
• Document every step
• Provide the right notice period or pay in lieu

Redundancy brings additional requirements, including:

• Fair selection criteria
• Genuine consultation with employees
• Exploring alternative roles
• Redundancy pay (for employees with 2+ years’ service)

Top tip: Avoid the temptation to ‘cut corners’. A small procedural mistake can lead to large legal consequences.

8. Health and safety responsibilities

The Health and Safety at Work Act 1974 places a legal duty on employers to protect the health, safety, and welfare of their staff.

This includes:

• Conducting regular risk assessments
• Providing training and PPE
• Monitoring workplace hazards
• Supporting mental wellbeing
• Reporting incidents under RIDDOR regulations

SafeHR support: Our HR documentation tools help ensure health and safety compliance is integrated into your wider HR management.

SafeHR: Your partner in legal compliance and people management

Staying legally compliant isn’t just about ticking boxes, it’s about creating a fair, safe, and supportive workplace where your business and your people can thrive. But we know keeping up with employment law changes can be overwhelming, especially for small businesses.

That’s where SafeHR comes in.

Our all-in-one platform helps you:

• Create compliant contracts and handbooks.
• Track absences, leave, and working hours.
• Access a library of expert HR templates.
• Get real-time advice from qualified consultants
• Keep secure records of all HR activity

Whether you choose our HR software-only solution or full HR support service, we’re here to keep your business protected and your people empowered.