When it comes to employment tribunals, employees can make claims under a whole host of different grounds: unfair dismissal, constructive dismissal, discrimination and breach of contract are just some of the common claims, while employers can also face action under the Working Time Directive, health and safety legislation, the Transfer of Undertakings (protection of employment) regulations, equal pay and National Minimum Wage laws, among others.

Early on it's all about damage limitation. So unless you're 100% sure that you behaved fairly – and can prove it – then it’s wise to consider alternatives such as arbitration and settling out of court.

Law firms often take up the appellant's case on a 'no win, no fee' basis. What’s more, trade unions, the Equality and Human Rights Commission and the Citizens' Advice Bureau often take up cases on fired employees' behalves. They have expertise and considerable resources.

But, by and large, assuming you believe your decision and handling was right and fair, proceed.

Why you need an employment policy

According to Acas, whatever the specific nature of the claim disputes often boil down to businesses not having a clear policy on how to deal with difficult situations. Either employers don’t have proper procedures in place for handling discipline, grievances, attendance or performance issues, or if they do, they don’t adhere to them or train managers in how to correctly apply them.

Different management styles then give rise to inconsistencies in the way that different people are treated for the same thing, such as punctuality, warnings or sick pay. This is a common source of grievances.

Acas says another classic mistake that many managers make is failing to address issues such as poor performance and absenteeism, then being too heavy-handed when they finally snap.

A clear set of policies and procedures, which are then communicated to staff rather than merely sitting in a drawer, will help to ensure that line managers have the confidence and know-how to deal with issues promptly, consistently and fairly. Not only will this help to avoid disputes in the first place, it will also afford you a defence in a tribunal if it becomes unavoidable.

What to cover

Some of the most important areas to cover are health and safety, equal opportunities and disputes and grievances. Wrap your set of policies and procedures in a company handbook or make details easily accessible online or within the office, perhaps even on communal notice boards. Drip feed and remind staff of their existence.

You also need a clearly set out contract of employment, explaining all relevant terms and conditions. This should include your policy on general conditions of employment, normal working hours, holidays, benefits (pension and health care schemes, for example), health and safety, disciplinary procedures, suspension and termination of employment.

Employees should understand your take on expenses, sickness, dress code, identity of line manager, e-mail and internet policy, confidentiality, issues surrounding company equipment and property, company background and employee development.

Conduct regular reviews and appraisals. This helps flag up potential problems before they escalate. If somebody is a poor performer then be willing to increase levels of supervision in the first instance. The onus is on the employer to improve a person's performance.

Remember, it’s no good having a list of policies if you are not going to communicate them and implement them consistently.

Group dynamics are notoriously difficult to manage. Make all your managers aware of the policies and include training and possibly even role-playing in order to see how a situation that could arise should be handled. This can be revealing and reminds members of your team that sometimes it’s best that they keep thoughts to themselves and refrain from saying something that may offend.