If Your HR Department Overlooks the Importance of this Key Role, It Could Cost You

Financial Post: 14 April 2015 Financial Post: (c) 2015 Financial Post. All Rights Reserved.

As any practitioner will tell you, the field of human resources has undergone a sea change. Gone are the days of its role as merely an administrative-payroll arm. Now, HR has become a key part of management with expertise in a variety of specialties related to managing people.

To achieve vocational prestige (and concomitant, rising remuneration), HR successfully conducted a major rebranding campaign to demonstrate its importance to Canadian businesses, and rightly so. Business success depends on your employees and strong HR programs provide an edge in hiring the best. But in this rebirth, HR effectively dissociated itself, to the extent possible, with anything administrative in nature. And the lowliest aspect of that perceived administration is employment files.

Being responsible for these would make any HR professional cringe, but in doing so, they sell themselves short. In the digital age, information is critical to businesses preventing and succeeding in litigation. A well-managed employee information system, consisting of a complex myriad of records in various digital and paper formats, provides business history essential to decision-making, demonstrates legal and ethical compliance and protects the organization from lawsuits.

I’ve argued recently that HR professionals must be trained with the requisite legal knowledge to handle investigations, terminations, and other litigious employment issues. Legal training ensures practitioners make improved decisions and retain the supporting documentation that will protect the employer.

Some examples illustrating the importance of effective employee information management policies and practices, and the problems endemic in their absence, include:

Are your employees bound by your company policies? Not if they haven’t signed off on them. Peter Thomas admitted to having seen his employer’s policy manual before he was hired and he acknowledged that the policy of returning commissions at termination was widely known. However, because no signed document of acknowledgement was produced, he was not found to be bound by the policy. Ensure proper sign off on any policy you expect to enforce.

Will your termination clause stand up? Don’t count on it alone. Brian Graff was terminated using a standard termination clause. Graff had previously disclosed, by memo, a medical condition that should have required accommodation before termination. While the employer, Jones Lang LaSalle Real Estate Services, argued it did not have a copy of the memo, the adjudicator found the employer to lack credibility due to inconsistency. This demonstrates the importance of employers maintaining effective systems of records retention to ensure key documents can be located and applied.

Can you send an email about an employee without them finding out? Not necessarily. If the employee requests it, and your organization is covered under privacy legislation (either because it is federally regulated or is in Alberta, B.C., or Quebec), the employee may have the right to access that email upon request. Even if a document is not physically placed in an employment file, the employee may still be able to view it.

Being accountable for employment files is complex and challenging. It requires a deep knowledge of the law and can result in serious and costly legal consequences if not managed properly.

Re-evaluate your love for your files. It is time for HR to take a step backward into the future.