Some Common (And Costly) HR Mistakes


Nobody in small business looks forward to dealing with HR issues; the regulations associated with HR issues seem tedious, dry, and difficult to interpret. Unfortunately, mistakes where personnel are concerned can quickly become costly matters, what with the growing propensity of disgruntled employees to lodge court actions when they believe they have been subjected to an unfair work practice.  To protect your business there are several areas you really must deal with, and there are places you can go for free help and assistance.


Harassment takes many forms, from bullying to sexual overtures. Your business should have a strong written policy on harassment and when incidents are reported you must take immediate steps to enforce its provisions.


Discrimination occurs whenever someone is treated differently because of their religion, race, sexual preference or culture. It can take place as part of the recruitment process by influencing who you select to interview and hire; by being used as an excuse to terminate a person; by influencing evaluation for a promotion; or by being brought into consideration when choosing who gets to undertake a training course or represent the business at a trade show. Treat all members of the team impartially and don’t allow others in the business to practice discrimination.

The hiring contract

Every person you appoint should be provided with a written copy of their basic contract conditions. They should sign two copies, one for their personal retention and one for your files. This will ensure that both parties have a clear understanding of the terms of the appointment - pay, duties, leave entitlement and other relevant details, and have agreed to them.

Protecting the firm’s IP

Every business has intellectual property of some kind. It could be patents or copyrights, or just its customer database and pricing schedule. Everybody employed should sign an agreement that states they will not disclose this intellectual property to others, both during and after their employment with you, and that on termination all documents related to IP or owned by the company will be returned.  Put it in as part of the hiring contract.

Contractor relationships

It can’t be assumed that every person who seems to be in the position of ‘contractor’ to a business, is for that reason necessarily excluded from entitlement to all of the benefits that normally accrue to ‘real’ employees. This area of law varies widely and it’s best to get expert advice before taking on someone in a ‘contractor’ role just to be certain of their legal position in relation to your business and your obligations to them.

Invasion of privacy

If you’re going to monitor team members’ communications, now a common practice in these days of email and the Internet, be sure the way you do it can’t be seen as an invasion of their privacy. State your policy in this regard as part of your hiring agreement and don’t try to get away with anything that could be construed as ‘snooping’. 

Employment history records

You should document every significant element of a team member’s relationship with your business from the time of their appointment until the time they leave. If a person is promoted (or not promoted) the reasons need to be recorded for future reference. This includes recording things like disciplinary problems, customer complaints, minutes of counselling meetings and violations of your employment policy.  It should also include any complaints they make to you. But don’t just dwell on the negatives – you should be recording the customer kudos and their other work related achievements as well.

So, while there's little you can do to prevent the truly bogus lawsuit, you can reduce your risk of a case arising in the first place, and improve your chances of winning a court action, by documenting, distributing and enforcing strong policies around these core issues. This will also keep you in compliance with labour law in many instances also. And, just as important, you need to ensure your employees understand the issues by providing short information courses that explain why they are important and how breaches will be treated. That way nobody can claim ignorance as a defense and it might just work to deter any improper actions in the first place.

It needn’t be too difficult to put together a set of ‘plain English’ polices covering these issues – first stop should be the various government departments charged with aspects of employment law. They often have educational materials like brochures and workplace posters, offer training on important issues and provide standard policy statements you can use in your own policy manual.

In today's business climate employees are much more likely to head for court if they believe that they are being treated unfairly, so it makes good business sense to try to avoid costly HR mistakes from arising in the first place. This is one area where a little prevention is worth a lot of cure.

Until next week,
Mike Reddy