HR Policies for SME… legally, which ones?

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Policies and procedures play a huge part in corporate Human Resources, they outline an organisation’s approach to various HR issues and working, govern the working practices and shape the culture of an organisation and reinforce your overall strategy.

As an SME why would you bother with HR Policies and Processes? Surely, they are not required in a small business? Is it excessive to have HR bureaucracy for so few people?

At HRCentral, we think that the HR structure is even more important in small business and this is the reason why… many business owners and decision-makers have to wear numerous hats. Owning and running a business doesn’t make you an expert in HR!

One of our latest clients asked us if having a disciplinary policy was necessary, as they didn’t like having awkward disciplinary type conversations. This is exactly why you should have processes and policies in place so that everyone knows what is expected of them and what the consequences when your team step out of line. Don’t make it up as you go along, and don’t ignore the issues.

Having correctly worded policies in place will enable you to scale easily and to ensure that the Company policies reflect the Organisation’s ethics and culture.

Which policies should you legally have as an SME?

Despite the fact that very few policies are legally required; there are some policies that will assist you as a business owner to manage your team, save you time, stress and hassle and ensure that best practice decisions made are consistently applied to everyone.

There are some employment policies that your business will need to be compliant with UK legislation. These are applicable to both SME and large corporations; and will assist with managing any issues with the minimum amount of fuss.


Consider where to store your policies so they are accessible to the team, ideally in a system where you can check that your team have read all the policies associated with their employment.

Contracts of employment:

We recommend that you don’t include policies in your contracts of employment – by making them non contractual it is far easier to change them as and when your operating practises change, without having to consult with everyone individually.

But you must include the following in your contract:

  •  Family friendly policies need to be included as does a section on mandatory training requirements required for the role, even if there are none.
  • Section including all benefits (not just pension) such as bonus, car allowance, healthcare, life assurance etc.
  • Must now detail times and days of work – not just total weekly working hours.
  • A full and detailed schedule to be included detailing all types of family leave payments that are available to the employee (adoption, maternity pay etc).


A handbook with reference to lots of policies is a great idea. You can use this as an operating manual, a great way of communicating with the team. If you have access to an HR information system, such as Breathe HR, with a read receipt option you can tell who has, and more importantly, who has not read the policies.


Our top recommended policies for SME are as follows:

  • Health and Safety – ensure that your staff feel supported and safe, especially in these uncertain and anxious times (law to have this if you have more than 5 employees)
  • Equal opportunities – ensures fair treatment and prevents claims for discrimination on the grounds of protected characteristics such as sex and race  
  • Disciplinary – commits to a fair process that is applicable to all – a legal requirement
  • Grievance – commits to fair hearings and what to do if a member of your team has an issue – a legal requirement

For further information, or bespoke documentation to support your business and help it to grow, or information about the Breathe HR Information system, please get in touch.


#BreatheHR #WhichpoliciesdoSMEneed #legalcompliance #HRprocedures #equalopportunities #employeehandbook

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