Policies and Procedures Relating to Legal Requirements (VCE SSCE Business Management): Revision Notes

Policies and Procedures Relating to Legal Requirements

What are policies and procedures?

A policy is a formal written document that outlines the rules, processes, and expected behaviours for specific workplace situations. Policies provide clear direction about what employees should do in different circumstances and ensure consistency across the organisation.

A procedure explains how to implement the policy in practice. While policies set out the "what" and "why", procedures detail the "how". Together, they create a framework for managing business operations effectively and legally.

Businesses must develop comprehensive policies and accompanying procedures to ensure they meet legal and regulatory requirements. These documents serve multiple critical functions in an organisation.

Why policies and procedures matter

Policies and procedures are essential tools for managing risk and ensuring legal compliance. They provide several key benefits:

Communicating organisational values: Policies make the values and expectations of a business explicit. Employees understand what the organisation stands for and how they should behave to align with these values.

Ensuring legal compliance: Many policies directly address legal obligations. For example, health and safety policies help businesses meet their duties under occupational health and safety laws, whilst privacy policies ensure compliance with the Privacy Act.

Establishing business routines: Business routines are processes that are regularly practised in a business. When these routines are embedded within workplace policies, they ensure continued and consistent application of important procedures. This standardisation creates stability and builds confidence among employees.

Creating fair and safe workplaces: Well-designed policies establish expectations regarding employee behaviour and performance. When combined with clear procedures and communicated effectively, they create safe, fair, and positive working environments where everyone understands their rights and responsibilities.

Types of workplace policies

Businesses develop policies across many different operational areas. Each policy type addresses specific aspects of business management and legal compliance.

Code of conduct

A code of conduct provides guidelines to regulate standards of behaviour and conduct within an organisation or industry. This fundamental policy establishes the rules that employees must follow in their daily work.

A comprehensive code of conduct typically covers:

• Attendance and absence: Expectations around punctuality, working hours, and procedures for reporting absences
• Employee behaviour: Standards of professional conduct and interactions with colleagues, clients, and the public
• Company values: How employees should embody and demonstrate organisational values
• Dress code: Appropriate workplace attire and presentation standards
• Confidentiality: Protection of sensitive business and customer information
• Reporting misconduct: Procedures for raising concerns about unethical or illegal behaviour

Recruitment policy

A recruitment policy outlines the process for hiring new employees. Its primary purpose is to promote fair and consistent approaches to recruitment, ensuring equal opportunity for all candidates.

Key elements include:

• Equal opportunity and anti-discrimination: Ensuring hiring decisions are based solely on merit and qualifications, complying with equal opportunity legislation
• Selection processes: Standardised methods for evaluating candidates, such as interview techniques and assessment criteria
• Internal and external hiring preferences: Guidelines on whether to prioritise existing employees for promotions or recruit externally
• Reference checking: Procedures for verifying candidates' employment history and qualifications

A well-structured recruitment policy protects the business from discrimination claims whilst helping to attract and select the best talent.

Health and safety policy

This policy addresses a business's legal obligations to protect employees' physical and mental wellbeing. Under occupational health and safety laws, employers must provide a safe working environment and take reasonable steps to prevent workplace injuries and illnesses.

A comprehensive health and safety policy may include:

• Employee safety training: Induction programmes and ongoing training on workplace hazards and safe work practices
• First aid information: Location of first aid facilities, names of trained first aiders, and emergency contact numbers
• Safe handling of materials and substances: Procedures for working with hazardous materials, including personal protective equipment requirements
• Maintenance of equipment: Regular inspection and servicing schedules to ensure machinery and equipment remain safe
• Mental health information: Resources and support systems for employees experiencing psychological stress or mental health challenges
• Accident training: Protocols for responding to workplace incidents
• Emergency procedures: Evacuation plans, assembly points, and responsibilities during emergencies

Procurement policy

A procurement policy supports effective planning to ensure value for money, quality goods, and reliable customer service from suppliers. Without proper procurement planning, businesses may face operating expenses significantly higher than expected, which ultimately affects pricing and customer satisfaction.

Important features include:

• Determining purchasing authority: Who has the power to approve purchases and at what value thresholds
• Budget limits: Maximum amounts that can be spent without additional approval
• Ordering system processes: Step-by-step procedures for placing orders, receiving goods, and processing invoices

Effective procurement policies help control costs and maintain consistent quality standards.

Financial management policy

Financial management policies govern how the business handles its financial affairs, including bank accounts and financial decision-making. These policies should reflect the business's values and promote sound financial practices.

Key components include:

• Opening new accounts: Processes and approval requirements for establishing bank accounts
• Insurance and risk management: Requirements for obtaining appropriate insurance cover and managing financial risks
• New suppliers: Criteria and procedures for evaluating and selecting new suppliers

Customer service policy

A customer service policy guides employees in delivering a consistent approach to customer interactions. It ensures all customers receive the same standard of service regardless of which employee they deal with.

This policy helps maintain the business's reputation and customer satisfaction levels by establishing clear service standards and expectations.

Emergency management procedures policy

By developing this policy, businesses must think through potential emergency scenarios and establish clear protocols for protecting people and property. This preparation can save lives and minimise damage during critical situations.

Policy development and legal compliance

Different areas of business management face specific legal requirements that drive policy development. The table below shows how legal obligations translate into necessary policies across five key management areas.

Human resources policies

Legal requirements from equal opportunity, anti-discrimination, sexual harassment, and workplace relations laws require policies covering:

• Recruitment and selection procedures
• Bullying and harassment prevention
• Code of conduct
• Internet and email usage
• Staff induction and procedures

These policies ensure fair treatment of employees and compliance with employment legislation.

Operations policies

Occupational health and safety laws mandate policies including:

• Hazards control
• Workplace health and safety
• Emergency evacuation
• Procurement

Technology support policies

The Privacy Act and Australian Privacy Principles require:

• Data management procedures
• Privacy protection policies

These policies safeguard personal information and ensure compliance with privacy legislation.

Sales and marketing policies

The Competition and Consumer Act necessitates policies covering:

• Customer service standards
• Returns and refunds
• Marketing practices
• Social media usage

These policies protect consumers and ensure fair trading practices.

Finance policies

The Corporations Act and Australian Accounting Standards Board (AASB) requirements drive policies for:

• Financial procedures
• Bank account management
• Business credit card usage
• New supplier evaluation
• Purchasing controls
• Customer debt collection

These policies ensure financial transparency, accountability, and compliance with accounting standards.