HR policies matter because they are evidence. When an employee brings a tribunal claim, the tribunal does not ask whether you meant well – it asks what you actually did, measured against the Acas Code of Practice and against your own written standards. An unreasonable failure to follow the Code lets a tribunal increase an award by up to 25%. And two changes make this materially more expensive: from 30 October 2026 employers must take “all” reasonable steps to prevent sexual harassment rather than merely reasonable ones, and from 1 January 2027 the unfair dismissal qualifying period falls to six months while the cap on compensation is removed altogether.
The generic answer to this question is that policies bring consistency and clarity and they are clearly worth having. But the reason to prioritise them these days is narrower and sharper: the legal system treats a written procedure as the benchmark you set for yourself, and from January 2027 the price of missing that benchmark stops being capped.
The short answer: policies are evidence
Almost every employment claim turns on process rather than outcome. A tribunal deciding unfair dismissal does not substitute its own view of whether you should have dismissed someone – it asks whether dismissal fell within the band of reasonable responses and whether you reached it fairly. Procedure is most of what “fairly” means.
That makes your policies the primary documentary evidence of whether a fair process existed. They are disclosable, they will be read out, and any gap between what they say and what happened becomes the shape of the claimant’s case.
There is a second, less obvious function. For discrimination and harassment claims the employer has a statutory defence available – but only if it can prove it took reasonable steps to prevent the conduct. A policy is not the defence itself; it is evidence of a step. Which is why the quality of the document, and whether anyone acted on it, decides whether the defence works at all.
What it costs when you have no policies
Five distinct heads of exposure, and they stack.
The Acas Code uplift. Where an employer unreasonably fails to comply with the Acas Code of Practice on Disciplinary and Grievance Procedures, a tribunal may increase the award by up to 25%. This is commonly assumed to apply only to unfair dismissal. It does not – the list of qualifying claims includes Equality Act work discrimination claims, unlawful deduction from wages, working time claims and breach of contract. A discrimination award where the grievance was handled badly can be uplifted on that basis.
The written statement award. If an employee wins any qualifying claim and you were in breach of the duty to provide written particulars when proceedings began, the tribunal must add two weeks’ pay and may add four. With the statutory week’s pay capped at £751 since April 2026, that is £1,502 or £3,004 on top of whatever else you owe. Note it is parasitic – there is no standalone claim – but it attaches to a long list of jurisdictions including unfair dismissal and discrimination.
Unfair dismissal. Fairness is assessed on whether you acted reasonably in treating the reason as sufficient for dismissal. Where a fair procedure was not followed, the tribunal considers what would have happened had it been – but a procedural failure does not become harmless simply because the outcome might have been the same. The compensatory award is currently capped at £123,543 or 52 weeks’ actual pay, whichever is lower, with a minimum basic award of £9,157 in some cases.
The discrimination defence. An employer is liable for discrimination and harassment committed by its employees in the course of employment, whether or not it knew or approved. The only escape is proving it took all reasonable steps to prevent it. With no policy, no training and no reporting route, that defence is not realistically available.
The sexual harassment preventative duty. Since October 2024 employers have had a positive duty to take reasonable steps to prevent sexual harassment. There is no standalone claim for breaching it, but where a tribunal finds sexual harassment and awards compensation, it must consider whether the duty was also breached and may add an uplift of up to 25%. Worth being precise here: that particular uplift attaches only to compensation for sexual harassment, not to discrimination awards generally.
Why an unfollowed policy is worse than no policy
This is the part most guidance misses, and it is counter-intuitive. Writing a policy and then ignoring it puts you in a worse position than never having written one.
No policy
Policy not followed
Unfair dismissal fairness
Judged against the Acas Code and general reasonableness, with some allowance for employer size
Judged against the Code and your own stated standard, and the departure needs explaining
Acas Code uplift
Available
Available, and easier for the claimant to establish
Breach of contract
Not available, no term to breach
Available where the policy is contractually incorporated, with damages and occasionally an injunction
Trust and confidence
Still exposed, see below
Exposed, plus the arbitrariness of departing from your own rule
Consistency argument
Harder to run without a rule to compare against
Departure from your own rule, plus different treatment of others, is a strong combination
Discrimination defence
Almost certainly fails
Fails if the policy is stale or unimplemented
At the hearing
Nothing to disclose
The policy is disclosable and becomes the cross-examination roadmap
Two points of detail matter.
First, having no policy is not a safe harbour. The courts have found an implied term that an employer will reasonably and promptly give an employee an opportunity to obtain redress of a grievance – reasoning from the statutory requirement to name someone a grievance can be raised with. So an employer with no grievance procedure is still judged against that implied obligation and against the Acas Code, and has no documentary evidence of any system at all.
Second, whether a policy is contractual depends on incorporation, not on the label. Handbook provisions are incorporated clause by clause, and a redundancy or sick pay term conferring an individual right is more likely to bind you than a general statement of intent. Check your handbook for an express statement that procedures are non-contractual, and check that it is accurate.
What “reasonable steps” actually requires
The leading case on the discrimination defence is instructive because the employer in it had the policies.
In Allay (UK) Ltd v Gehlen the Employment Appeal Tribunal upheld a finding that an employer lost the defence despite having an equal opportunities policy, an anti-bullying and harassment procedure and having delivered equality training. The reasoning is worth knowing in detail, because it sets the standard.
The tribunal asks two questions: what steps did the employer take, and were there further reasonable steps it should have taken. On the facts, the answer to the second was yes. The equal opportunities policy made no reference to harassment at all. The anti-bullying and harassment procedure mentioned harassment only in its title, and thereafter discussed only bullying, with no mention of race. The training had been delivered roughly two years earlier and had become, in the EAT’s word, stale.
Three lines from the judgment are worth having in mind when reviewing your own documents. “Brief and superficial training is unlikely to have a substantial effect in preventing harassment.” “The less effective training is, the more quickly it becomes stale.” And, memorably, that training amounting to no more than gathering people together and saying “here is your harassment training, don’t harass people, now everyone back to work” is unlikely to be effective or to last.
The EAT also confirmed that tribunals may look at what happened in practice to test whether the training worked. In that case racist comments continued and managers who were told about them failed to act – which was itself evidence that the policy and training had not landed.
The practical translation: a policy that does not name the conduct it is meant to prevent, is not refreshed, and is not backed by manager training on what to do with a report, will not discharge the defence. It will simply demonstrate that a reasonable further step was available and not taken.
What changes in 2026 and 2027
Two future dates will change things considerably.
30 October 2026. The preventative duty on sexual harassment is due to change from “reasonable steps” to “all reasonable steps”. A single additional word, but it removes the argument that you did enough by doing something. Alongside it, employers are due to become liable for third-party harassment of their staff – by customers, clients or contractors – with the “all reasonable steps” test built into the liability itself. Unlike the preventative duty, that one is directly enforceable by an employee in a tribunal and covers all protected characteristics, not just sex.
There is also a new power to specify by regulation what counts as a reasonable step, expressly including carrying out risk assessments, publishing plans or policies, and steps on reporting and handling complaints. That is the route by which an anti-harassment policy is likely to become mandatory in substance.
1 January 2027. The unfair dismissal qualifying period falls from two years to six months, and the cap on the compensatory award is removed.
Both halves of that matter, and the second is under-discussed. Worth correcting a widespread error while we are here: this is not a day-one unfair dismissal right. The original Bill proposed one; the Act as passed sets six months. But the removal of the compensation cap is arguably the bigger commercial change, because the ceiling on getting a dismissal wrong stops being £123,543 and becomes the claimant’s actual loss.
Put those two together and the arithmetic of process changes. A poorly handled dismissal of someone with eight months’ service was, until now, usually not an unfair dismissal risk at all. From January 2027 it is, and the exposure is uncapped.
Which policies are actually required
Shorter than most lists suggest. Genuinely mandatory: a written health and safety policy if you have five or more employees, recorded risk assessment findings at the same threshold, the disciplinary and grievance note within the written statement of particulars, a staff privacy notice, and a data protection appropriate policy document if you process special category data such as sickness absence – which almost every employer does.
Everything else, including anti-harassment, equal opportunities, whistleblowing, absence management and homeworking, is not legally required. That does not make it optional in practice: an anti-harassment policy is the primary evidence for a statutory defence, and a whistleblowing policy is strong evidence that a disclosure would have been dealt with properly. But the distinction is worth understanding, because it tells you where to spend your effort.
Our guide to starting an HR department from scratch sets out the full mandatory list with thresholds and deadlines.
What tribunal claims actually cost
Claim volumes are rising steeply. In 2025/26 the tribunals received around 50,000 single claims and 44,000 multiple claims, and the open caseload stood at roughly 531,000. Open jurisdictional complaints in single cases grew from around 36,000 to more than 87,000 in a single year.
On award levels the most recent published figures are for 2023/24, and they are provisional. Median awards were around £6,700 for unfair dismissal, £16,200 for sex discrimination and £17,200 for disability discrimination. Maximums in the same period reached £179,000 for unfair dismissal, £964,000 for disability discrimination and £995,000 for sex discrimination.
Making policies work rather than exist
Having established why they matter, the operational question is how to make them effective – which, as Allay shows, is the part that determines whether they protect you.
Accessibility. Staff have to be able to find the policy without asking. One location, searchable, readable on a phone, and available to everyone rather than gated by seniority. A policy nobody can find is evidentially close to a policy that does not exist.
Training that is not a formality. Deliver it properly, record who attended and when, and refresh it. The staleness point from Allay is the practical one: two years is too long for harassment training to still be doing work. Train managers separately on what to do when someone reports something, because manager inaction is what turns an incident into a claim.
Check comprehension. A short quiz or a scenario exercise tells you whether the training landed, and produces a record that it did.
Consistency, and a record of it. Apply the procedure the same way every time, and where you depart from it, write down why. Inconsistent treatment of comparable cases is a recognised route to an unfair dismissal finding, and the counter-argument is contemporaneous notes rather than recollection.
Review on a schedule, not on an incident. Diarise an annual review, plus a trigger review whenever the law changes. Two changes are already on the calendar: October 2026 for harassment, and January 2027 for dismissal.
A review checklist
Does every employee and worker have a written statement of particulars, issued on or before day one?
Does it name a person for disciplinary appeals and a person for grievances, and explain how to apply?
Does your anti-harassment policy actually mention harassment, name the protected characteristics, and describe the reporting route?
When was harassment training last delivered, and is that within the last twelve months?
Have managers been trained specifically on handling a report?
Do your disciplinary and grievance procedures reflect the current Acas Code? Note that Acas has been consulting on a replacement Code, with the consultation closing in September 2026.
Does your handbook state whether policies are contractual, and is that statement accurate for each policy?
Do you have a written health and safety policy, if you have five or more employees?
Do you have a data protection appropriate policy document?
Does your absence management policy avoid automatic penalties, given that automatic triggers are what turn absence policies into disability discrimination claims?
Can you evidence, for each policy, that staff were told about it and when?
In summary
HR policies are important because they are the record of whether you behaved reasonably, and because from 2027 the cost of not being able to show that stops being capped. The Acas Code uplift, the written particulars award and the discrimination defence all turn on documents you either have or do not.
The single most valuable thing to take from the case law is that a policy in a drawer is not neutral. It is evidence that you identified the risk, wrote down how you would manage it, and then did not. If you only do one thing after reading this, check whether your harassment policy names harassment and when your training was last refreshed – because those two questions decide whether you have a defence in October.
HR policies matter because they are evidence. When an employee brings a tribunal claim, the tribunal does not ask whether you meant well – it asks what you actually did, measured against the Acas Code of Practice and against your own written standards. An unreasonable failure to follow the Code lets a tribunal increase an award by up to 25%. And two changes make this materially more expensive: from 30 October 2026 employers must take “all” reasonable steps to prevent sexual harassment rather than merely reasonable ones, and from 1 January 2027 the unfair dismissal qualifying period falls to six months while the cap on compensation is removed altogether.
The generic answer to this question is that policies bring consistency and clarity and they are clearly worth having. But the reason to prioritise them these days is narrower and sharper: the legal system treats a written procedure as the benchmark you set for yourself, and from January 2027 the price of missing that benchmark stops being capped.
