HR documents every small business needs: a top 10 list

Every small business with staff needs a core set of HR documents: a written agreement for each worker, policies on conduct, bullying and discrimination, workplace health and safety, and records of pay and leave. These documents set expectations, give you a consistent way to handle problems and show what you agreed with each person. The list below covers the ten that matter most, with the Australian laws each one draws on.

These documents don't replace advice on a specific dispute. If you're facing a termination or a claim, get advice from a lawyer or your industry association before you act.

1. Employment agreements

An employment agreement sets out the terms of a worker's job. It should include:

• start date and, for fixed-term roles, the end date
• job title and main duties
• whether the job is full-time, part-time or casual
• pay rate and any allowances or benefits
• ordinary hours, and how leave is accrued and taken
• how the employment can end, and the notice period

Put the agreement in writing before the first day. A worker who says they were promised more than the contract shows is much harder to deal with if there's nothing on paper.

The agreement must also meet the minimum standards set by the Fair Work Act 2009. That includes the ten National Employment Standards, which cover things like maximum weekly hours, annual leave and notice of termination. Most workers are also covered by a modern award, which can set higher pay rates and conditions for their industry or occupation. Check which award applies before you write the pay terms.

2. Worker code of conduct

A code of conduct sets out the behaviour you expect at work and what happens when someone breaks the rules. It should cover:

• the values and standards that guide your business
• behaviour on site, online and at events, including dress and language where it matters
• how to report a concern or complaint, and who will handle it
• what consequences apply, and that they're applied fairly

Give each worker a copy, ask them to sign it, and go over it in their induction. Our worker code of conduct policy gives you a starting structure.

3. Anti-discrimination, harassment and bullying policy

Employers must take reasonable steps to stop discrimination, sexual harassment and bullying at work. The federal Acts are the Racial Discrimination Act 1975, Sex Discrimination Act 1984, Disability Discrimination Act 1992 and Age Discrimination Act 2004. Each state and territory also has its own anti-discrimination law, so your policy should match the places where you operate.

The policy should define what's unacceptable, explain how to report it and promise that complaints will be handled promptly and fairly. Bullying and harassment are also psychosocial hazards under WHS law, so link this policy to your risk controls. Start with an anti-discrimination and equal employment opportunity policy and a bullying policy.

4. Internet and technology use policy

This policy covers company devices, networks, email and the internet. It should say what's allowed, what's not, and what you'll monitor. It should also deal with confidential data and what happens when a worker puts that data at risk, such as by using an insecure website on a work computer.

Monitoring is regulated. Under the Privacy Act 1988, personal information must be handled according to the Australian Privacy Principles, and some states have their own surveillance rules. New South Wales, for example, requires notice before employers can use camera, computer or tracking surveillance under the Workplace Surveillance Act 2005. Tell workers what you monitor, and why, before you start. Copyright also matters: the Copyright Act 1968 covers what staff can copy and share. An internet use policy is a good place to put these rules.

5. Performance management

A performance management system sets clear standards, agrees goals, gives regular feedback and records how each worker is going. It's how you address underperformance before it becomes a dismissal problem. A simple version has:

• written performance standards for each role
• goals agreed with the worker, reviewed every few months
• regular feedback, both positive and corrective
• a performance improvement plan with a clear timeframe and support
• a record of every conversation

Don't wait for a yearly review to raise a problem. Address it early, in private, and write down what was said. The Fair Work Ombudsman publishes guidance on managing underperformance, which is worth reading before you start a formal process.

6. Payroll and leave

Pay and leave are where small businesses most often get caught out. You must pay at least the rate set by the national minimum wage and any applicable award, and you must track leave correctly. Underpayment can lead to penalties, back-pay orders and the cost of a dispute.

Keep a written payroll policy that covers:

• how and when you pay wages, and how you record hours
• how overtime, penalty rates and allowances are calculated
• how leave requests are approved and recorded
• how you report to the Australian Taxation Office, including Single Touch Payroll

A payroll policy and a leave policy set these out. Check the pay rates against the current award each year, because they usually change in July.

7. Workplace health and safety policy and procedures

Under section 19 of the WHS Act, a business must ensure, so far as is reasonably practicable, the health and safety of its workers and of others affected by its work. A WHS policy states your commitment to that duty and how you'll meet it. Procedures show how it works in practice, covering hazard reporting, incidents, consultation, training and emergencies.

For work that carries risk, the WHS Regulations and codes of practice set the detail, and psychosocial hazards now have a model code of practice. Victoria has its own OHS laws. Our WHS policy gives you the top-level statement, and our guide to ten WHS policies every workplace should have explains the rest.

8. Privacy policy

A privacy policy explains what personal information you collect, why you collect it, how you keep it safe and how people can ask to see it or raise a concern. Staff records include tax file numbers, bank details and health information, so this matters even if you have no website.

Whether the Privacy Act applies to you depends on your turnover and what you do. Many businesses with an annual turnover of $3 million or less are exempt, but there are exceptions, including health service providers and businesses that trade in personal information. Check those before you rely on the exemption. Even if the Act doesn't apply, a clear policy builds trust. A separate worker-facing privacy notice is a useful companion.

9. Disciplinary action policy

A disciplinary policy sets the steps you'll follow when a worker breaks a rule or keeps underperforming. Typically that means a conversation, then a written warning, a final warning and, if nothing changes, termination. The policy should say when you'd skip a step, such as for serious misconduct.

Consistency matters. If one manager issues a verbal warning and another dismisses on the spot for the same behaviour, you invite claims. The Fair Work Act 2009 protects workers against unfair dismissal, and the award or enterprise agreement that covers them may set its own procedures. Record each step, and give the worker a chance to respond before you decide. Write the stages into the policy so every manager follows them.

10. Company vehicles policy

If your staff drive for work, whether in company cars, their own cars or your vans, you need a policy for how vehicles are used. It should cover who can drive, licence checks, maintenance and pre-use checks, personal use and insurance.

Work-related driving is also a WHS issue. Under section 19 of the WHS Act, you must manage the risk of your workers driving for work, including fatigue and time pressure. The Fringe Benefits Tax Assessment Act 1986 applies when you provide a car for private use, so keep records of that use. A vehicle pre-operational checklist help put the policy into practice.

Keep the documents together

Store your HR documents in one place that staff can find, and check them every year. A quick review should confirm the awards, pay rates and laws are still current, and that the forms match what you actually do. Old templates that nobody uses are a risk in themselves.

Common questions

Do I need all ten documents to start?

No. Start with employment agreements, a WHS policy and a payroll and leave policy, because those cover most of your legal obligations from day one. Add the others as you grow.

Do I need a written contract for casual staff?

You don't need a formal contract for every casual job, but you should record the key terms, such as pay, hours and how the work is offered and accepted. Written terms make it easier to show what was agreed.

Can I use a template for my HR policies?

Yes, as long as you check it against the laws and awards that apply to your business. A template is a starting point. An auditor, a tribunal or the Fair Work Ombudsman will look at what you actually do, not what the document says.

How often should HR policies be reviewed?

At least once a year, and whenever a law, award or your business changes. Record each review with the date and the person who approved it.

This is general information, not legal advice. Check the current law with the Fair Work Ombudsman or your state or territory regulator.