Canadian Employment Law Today

CELT November 13 2013:celt 467.qxd 13-10-25 10:57 AM Page 7 CANADIAN EMPLOYMENT LAW TODAY Proactive auditing Why conducting an HR compliance audit is crucial for your organization | BY LAURA WILLIAMS | consequences including potential administrative penalties, fines, WHEN MOST business owners, man- unfavourable tribunal rulings or agers and HR professionals hear the employee lawsuits. Worst of all, a visit word "audit," images of Canada Rev- from a labour inspector that turns up enue Agency (CRA) inspectors comb- legal violations in your workplace ing their financial records could serve as a red flag to other agenimmediately come to mind. While a cies — think CRA, for example — that visit from the taxman can be a source can open the door to unwelcomed of anxiety for any executive, another scrutiny. area of exposure poses just as much That's why it's important to carry risk for their businesses, and that out a comprehensive HR law and best comes on the human practices audit — which resources front. examines key areas such Time and time again, as workforce planning COMPLIANCE we're called upon to help and recruitment, workorganizations — ranging ers' compensation, from SMEs to major corporations — employment standards, health and address and repair damage from an safety, and other relevant areas that otherwise preventable HR law-related most often produce significant legal incident. By then, however, it's often and HR risk for employers — to protoo late to do more than simply react tect your organization from compliand manage the issue. It's at that point ance-related exposures. An audit that matters can become costly. Busi- offers three key business benefits: ness leaders are often left with little • It highlights the adequacy and choice but to remedy the situation by robustness of existing processes, polipaying hefty fines or reaching size- cies and procedures which govern and able out-of-court settlements, unless affect your workforce — not to menthey opt to take the even more expen- tion critical HR law liabilities across sive litigation route, where a your organization — while defining favourable judgment is never guaran- areas for HR policy improvement. teed. • It helps evaluate your ability to manThe solution, of course, is to take a age claims, manage legal risks associproactive approach in designing a ated with non-compliance incidents in comprehensive and effective employ- the workplace, and facilitate effective ment law compliance and HR policy and informed decision-making. An foundation. It starts by understanding audit reinforces HR best practices to your jurisdiction's relevant employ- build stronger cultures, avoid penalment legislation as it relates to your ties or legal challenges, and build a business, then ensuring you comply more efficient workplace where HR with the law. That's especially impor- practices are aligned with the organitant in Canada, where workplace leg- zation's strategic objectives. islation is changing in provinces on an • It helps build a strong HR foundation increasingly frequent basis, leaving across your organization to gird employers exposed to potentially crip- against business-management chalpling legal and financial risks. As the lenges — related to everything from speed of legislative change intensifies, employee turnover and rapid growth, many employers are left confused by to succession opportunities — while their obligations. Even HR profession- also demonstrating to labour ministry als are finding it difficult to keep pace, inspectors that your organization is opening the door to a wide range of committed to legislative compliance. Conducting a proper audit Of course, this begs the questions of how to conduct a proper audit in the first place. Here are five basic steps to put your organization on the path to full employment law and HR policy compliance: Rely on a professional. Like any proactive initiative on the HR front, an audit can be a complex process. The most important point to remember is to trust the process to HR professionals or HR lawyers with a strong grasp of applicable labour and employment laws and HR best practices. As mentioned earlier, workplace legislation is changing so rapidly that it requires specialized expertise to understand compliance responsibilities as they relate to your organization, then structure a coherent, customized HR framework that ensures compliance on all fronts. Set clear objectives. This means taking the time to understand relevant workplace legislation as it applies to your organization, then strategically defining the scope and goals of your audit. Audits that are too broad tend to run aground simply due to a lack of focus. And if the task is left to just one or two internal employees to manage, that risk of failure on the audit front is only heightened. Define what a successful audit looks like for your company — both in terms of identifying areas of HR law exposure and potential HR improvements that could be introduced into your workplace — then begin analyzing your strengths and opportunities. Collect data in an organized manner. This typically involves preparing a checklist to help assess the level of compliance and effectiveness of various HR policies and procedures, then tapping a wide array of internal resources — from policy manuals Published by Canadian HR Reporter, a Thomson Reuters business 2013 Continued on page 8 7

• Cover