Human Resources (HR) policies are an essential ingredient of any successful start-up or small business. Good policies will establish a clear understanding for expectations and standards, while also protecting the rights of employers. Unfortunately, while policies are important in a workplace, they can be one of the last things on the mind of a small business owner.

To help you get on the right path to creating business policies and a positive work environment, we’ve compiled a list of 12 HR policies all businesses should have to minimise legal risks.

12 essential HR policies

1. Work Health and Safety Policy

Workplace hazards can significantly impact your business, from decreased productivity to increased insurance premiums and obligations like sick pay and hiring temporary replacements. Workplace policies on Work Health and Safety (WHS) define procedures and outline the responsibilities of both the employer and employees to maintain a safe working environment. Without adequate HR policies and procedures in WHS, businesses risk failing to identify and mitigate risks, violating legal requirements, and not adhering to applicable laws.

2. Bullying, Harassment and Discrimination Policy

Did you know an employer can be held legally responsible for acts of discrimination, bullying or harassment in their business? To minimise this risk, comply with anti-discrimination laws, and demonstrate legal obligations, the business must show that they have taken all reasonable accommodations and steps to prevent discrimination or harassment from occurring. This includes establishing preventative measures and ensuring equal employment opportunities. This is almost impossible if you don’t have comprehensive policies in writing.

Having a well-documented anti-discrimination policy in place communicates clearly to employees what constitutes acceptable behaviour, including banning sexual harassment, discrimination based on gender identity, sexual orientation, or religious beliefs, and forms of toxic workplace culture. Such policies also provide guidance on handling employee grievances and internal disputes to reduce risks of legal disputes or breaches of the Fair Work Act 2009 (Cth)(FW Act). A good policy will also outline procedures for dealing with complaints.

The failure to have a bullying, harassment, and discrimination policy (or individual policies addressing these matters) can contribute to poor workplace culture and, in the case of sexual harassment, amount to a breach of legal compliance.

3. Code of Conduct

A Code of Conduct is important for setting the standards of employee behaviour you expect from your team, and is essential to align with ethical standards and business goals. Common issues such as dress code or appropriate attire, mobile phone use, punctuality, ethical behaviour, and the use of company property will be included in a Code of Conduct.

By outlining unacceptable behaviour and educating employees on business values through a policy, you are in a better position to manage unacceptable conduct in the workplace if and when it arises.

This policy provides objective criteria for addressing misconduct, ensuring employee relations and disciplinary responses are fair and actionable. Its absence may result in inconsistent practices and challenges during the hiring process, onboarding new employees, or addressing performance-related employment issues.

4. Drugs and Alcohol Policy

The use of drugs and alcohol during and outside of work hours can present significant safety risks and costs to your business through injuries, absenteeism, damage to company property, and potential breaches of workplace laws, including National Employment Standards (NES). A drugs and alcohol policy will reiterate the business’s zero-tolerance approach while also communicating the potential for employees to be subjected to random testing. Without such guidelines, both the employer and most employees face increased risks of workplace injuries, unsafe practices, and reputational harm, hindering organisational culture and adherence to workplace policies.

5. Leave Policy

For businesses that experience seasonal busy periods, managing annual leave entitlements becomes equally important as operational demands. This is when an effective leave policy can be extremely valuable. A leave policy promotes work-life balance and clarifies expectations for busy periods, business closures, or insufficient leave accrual. The absence of a leave policy can result in inconsistent leave practices and the abuse of leave entitlements. As a result, employers risk running into rostering issues, increased workload for staff, higher levels of employee stress, and poor operational coverage during busy periods.

6. Grievance Policy

Every business will have to deal with a workplace dispute at some point. Having a grievance policy in place acts as an important tool for employees to understand what steps they should follow when making or handling a complaint while meeting employment laws. The failure to implement an appropriate grievance policy can result in inconsistent management practices, increase the risk of claims being made to the Fair Work Commission (namely, General Protections), and result in a toxic organisational culture. Consistent processes help to ensure fair treatment for all parties involved.

7. Performance Counselling and Discipline Policy

Performance management is a common practice within any business, but can often be a delicate process. A policy will assist you in remaining compliant with requirements of procedural fairness and provide guidance on how unacceptable conduct will be dealt with.

Without a performance counselling and disciplinary policy, an employer will lack transparency with their employees about the consequences of their actions. In addition, management practices may be inconsistent, creating the risk of legal disputes such as a General Protections, adverse action, or discrimination claim to the Fair Work Commission.

8. Internet and Email Policy

With the increased use of technology in businesses, it’s important to establish acceptable behaviour, including the appropriate use of the internet. An internet and email policy will define proper use of company technology, mitigating risks to privacy laws, cyber threats, or misuse, as well as the consequences an employee may face for breaching the policy.

In the current technological environment, employers face significant risk when they fail to implement an appropriately detailed internet and email policy. The misuse of email and the internet can amount to a misuse of company property and resources but also expose the business to reputational damage and cyber threats, among other costly consequences.

9. Social Media Policy

Social media use is rapidly increasing and becoming incorporated into our working lives. A social media policy is essential to protecting your company’s reputation, especially if employees list their place of employment on their profiles. On social media, lines between professional and personal networks can become blurred, so it is a good idea to let employees know that how they behave on social media reflects on the business, and what may be the possible consequence of that behaviour. Without a social media policy, employers face the risk of employees engaging in inappropriate behaviour in a public forum creating reputational risk and a permanent digital footprint associated with the business.

10. Privacy Policy

Employers have a responsibility under privacy laws to safeguard the personal information of employees and customers. Therefore, businesses must have a policy in place articulating how their private information is used and managed. A privacy policy makes it clear what information is allowed to be made public and what is required to stay private or within the walls of the company. A privacy policy should include employee health records and personal information such as addresses, phone numbers and emails.

Employers without a privacy policy may end up with inconsistent privacy practices and can easily fall foul of their privacy obligations, creating a risk that they’ll be investigated by the Office of the Australian Information Commissioner and, in the case of serious or repeated breaches of privacy, face civil penalties.

11. Driving and Motor Vehicle Policy

As driving becomes more and more common as a work activity, it is important to tell employees what is expected as they get out onto the roads. Whether they are driving a branded work vehicle or their personal vehicle, while they are driving for work purposes, the vehicle becomes their workplace. This means their behaviour, conduct and standards should be the same as when they are in the office. Safety policies relating to driving and motor vehicles should include a procedure for breakdowns and emergency situations.

Not only are WHS obligations at stake in terms of physical risks to employees and other persons when an employer goes without an appropriate driving and motor vehicle policy, there’s also a heightened risk of damage to or misuse of company property. This is often associated with increased financial liability and reduced chances of receiving just compensation from a responsible employee.

12. Working from Home Policy or flexible work arrangements

A good portion of employees are now working at least part hours from home. The need for clear instruction and clarity around expectations has never been so key to managing employees and performance. How an employee works, where an employee works and when an employee works should all be captured in a Working from Home policy. A checklist to confirm specific set-ups and obligations is a handy way to practically implement a Working from Home policy.

Importantly, there are significant WHS risks associated with the failure to have and properly implement a working from home policy. Employees may suffer physical and psychological injury without proper remote working arrangements, which can in turn affect their productivity. There may also be an increased likelihood that employees will misuse company property.

Compliance with employment laws starts with developing HR policies and procedures

HR workplace policies are a simple way to ensure your business is well-equipped to handle a number of common workplace issues. Citation HR’s HR software solution allows you to download all of the above HR policies and more. Better yet, Citation HR’s Workplace Relations Specialists will draft tailored HR Policies to suit your unique business needs.

Got employee relations questions? Our HR experts have the answers

If any of this information has raised questions about your organisational policies, please contact our workplace relations experts via the HR Advice Line.

Not a Citation HR client? To learn more about how our HR Services can help your business, please contact us.

12 HR policies all businesses should have