By Stephen Jackson, head of the employment law team at Harding Evans Solicitors

People are the most important resource of any business, and so it is essential that you have the tools to effectively manage them from the outset. Your most fundamental tool will be a contract of employment, tailored to meet the specific needs of your business.

Irrespective of size all employers must now issue employees with a statement setting out the terms and conditions of their employment or face a fine of up to 4 weeks pay. Thanks to the Employment Act 2002 the days when small employers were exempt from this obligation are long gone.

A comprehensive contract of employment will protect your interests not only whilst an employee is in your employment but also once they have left. A well-drafted contract can prevent an employee from leaving you and walking straight into the arms of your competition, or systematically contacting all your clients to promote their own new company.

All companies, large or small, must also have a grievance and disciplinary procedure so it is clear to everyone how problems are going to be dealt with. Since October of last year the law provides that a failure to follow these minimum procedures could result in compensation payable by you to an employee being increased by up to 50 per cent.

Your ultimate aim should be to have a staff handbook which reflects the aims, needs and culture of your business and in doing so allows you to get the most out of your employees and protect your business.