One of the most important internal relationships for an in-house legal department is with the human resources (HR) team. HR deals with multiple legal issues daily, from handling routine personnel management to potentially being on the front line should any claims alleging wrongful dismissal, discrimination, sexual harassment, bullying and other types of mistreatments arise. This is why it is so important that the legal department and the HR team cooperate and align on how to best protect the company from employment-related issues. Here is a checklist of several ways the legal department can best communicate and work with HR:
Most companies provide training to employees on a wide variety of issues, including sexual harassment, compliance, business ethics, and data security. Legal and HR should meet once a year to go through the training programme and materials to make sure they are relevant, effective, and updated to capture new issues. New hire orientation is another place for legal teams to reach employees and discuss important policies and issues.
From making sure people have the right to work in the UK, to determining employees’ entitlements to paid holiday, sick pay, and pension contributions, to working out at what rate they should be paid under Minimum Wage rules (if relevant) or equal pay legislation, and when gardening leave should apply, there are many vital processes on which HR should collaborate with Legal. Getting any of these things wrong can set the company up for severe legal problems and potentially significant damages, not to mention the reputational harm. Work with HR to create easy-to-understand guidelines and processes regarding employee status, pay and benefits and to train all managers making hiring decisions and job offers in this area.
Typically, the legal team drafts employee agreements — such as confidentiality, non-compete, or IP ownership clauses — and HR administers them. Unfortunately, over time, agreements get modified in a non-uniform manner or out-of-date versions are used when newer versions exist. When the time comes to enforce these agreements, it may be hard to locate the signed copy. HR and legal should meet regularly to discuss the preparation and administration of such agreements, including a process to maintain version control and whether changes may be needed given new circumstances or changes in the law.
Many companies have an employee handbook containing key policies such as “Code of Ethics and Business Conduct,” “Anti-Corruption,” “Insider Trading,” “Health and Safety,” etc. Set up a yearly process with HR to go through the handbook and policies together and update as needed.
Independent contractor review
Another area of cooperation is reviewing all self-employed contractors each year to ensure they are not being treated like employees. If they could be deemed to be – to all intents and purposes – employees, then they could therefore be entitled to the same rights and protections as employees – or create PAYE and NIC liabilities for the business. Train anyone with the ability to engage contractors about the proper process to hire and manage them. Set up a procedure to flag and review contractors who have been working with the company for a set period of time — for example, six months — and ensure there is a process to decide whether to reengage or terminate the relationship. If an independent contractor stays on for years and years, you may have trouble claiming they are not, in fact, an employee.
A proactive legal department will work with HR to be prepared for the possibility of redundancies in any year, including creating a process to reduce the legal risks that can arise when job cuts happen. Create a simple checklist of all the steps the company will need to take in the event that redundancies are necessary and make sure that paperwork is kept to demonstrate the proper procedures have been followed. For example, issues such as fairness, transparency and communication are key. Statutory worker protections can trip the company up and impose additional costs if not adhered to. Developing severance agreement templates is good planning and can be helpful when things start to pile up.
Internal investigations policy
At most companies, internal investigations typically involve the legal department, internal audit, and the HR team. Over time, the lines can become blurred and information gets siloed, leading to inconsistent results and duplicative efforts. Consider creating a matrix that clearly sets out the roles and responsibilities of each group depending on the type of issue presented. Set out how information will be shared, what follow-ups are required, who is copied on what, etc.
Given the potential legal exposure for making a “bad” hire, some companies perform criminal background checks on potential employees. Liaise closely with HR to exercise caution here. Make them aware of their responsibilities for how they access this information and how they process it, for example under GDPR rules.
Legal and HR should also meet regularly to communicate about cutting-edge issues in employment law, from work-from-home policies, to social media policies, dress codes/religious accommodation guidance, to wellness programmes, and a host of other issues. Meeting regularly, sharing ideas, and issue spotting can make life easier for both groups and better protect the company and its employees which, in the end, is the goal.
There is an endless supply of issues and concerns that the legal department and HR share. The checklist above is a good start but the real takeaway is the importance of setting up regular meetings between the two. The company will benefit from the legal team taking a proactive and strategic role in identifying areas of employee risk and working as a partner to minimise problems down the road.
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