Legal Compliance and Labor law in HR: How important is it?

labor law, labour law, hr, human resources, compliance, legal, illegal, heakth & safety, regulation, regulations, gdpr, general data protection regulation, contract, fine, violation, fine

“We are bound by the law, so that we may be free.”
― Marcus Tullius Cicero

It’s no secret that HR taps into many different areas of expertise in its daily tasks and overall influence. Legal side of the business when it comes to employees is quite important and unavoidable so I wanted to discuss some bits and pieces, like labor law and health & safety. We’re always discussing how to attract new workforce and increase the company’s visibility through good employer branding overall but to actually have a new employee start the first day, quite a few different legal matters have to be done in order to uphold due diligence to the full extent of law. Jumping through or ignoring certain legal parameters could cost a company a lot of money if whatever audit was to determine any major findings. In most cases, out many HR’s core functions, upholding labor law for the good of the employee and caring about their health & safety are as much a responsibility as recruiting them.  Therefore, it’s vital for any HR department to have one or several colleagues well-versed into the legal sphere of employment. Let’s try and dive into some of them to dissect some details.

labor law, labour law, hr, human resources, compliance, legal, illegal, heakth & safety, regulation, regulations, gdpr, general data protection regulation, contract, fine, violation, fine
Legal compliance – HR’s mandatory task

Labor law

To protect the employee from the possibility of employer’s extortion and vice-versa, labor law is predominantly what many HR Business Partners and Payroll Specialists are looking for on a daily basis. Things like absence for whatever reason, sick leave or number of hours worked are parameters which are all very sensitive topics when discussing the employees’ rights. It varies from country to country probably, but there are structured rules in what’s an acceptable working pattern with how much rest in between. The health status of a new employee is also quite important so most companies, before the contract signing, schedule a check-up with a medical doctor who then lets the employer know whether that employee is fit for whatever position in question. There are a few incentives in why these shouldn’t be ignored; mentioned high fine costs as well as leaving yourself open to potential suing from the employee side who knows the laws. Obviously, aside from paying fines, you also want these things upheld for the long-term commitment and evasion of any hidden costs which might happen during any of the possible situations; you know the usual ones like absence of employees, in turn absence of productivity, in turn absence of results.

labor law, labour law, hr, human resources, compliance, legal, illegal, heakth & safety, regulation, regulations, gdpr, general data protection regulation, contract, fine, violation, fine
GDPR – EU’s expensive regulation

GDPR or General Data Protection Regulation

The EU has enforced GDPR laws since 2018 which caused uproar with some companies in the last couple of years, reaching the record number of paid fines in 2023; over 1.67 billion Euros worth of fines according to Statista. In short, this regulation upholds (or at least tries to) the structure of how personal data is processed and whether a party is allowed to process it. The violations are mostly due to insufficient non-compliance with the mentioned processing as well as lack of legal basis on which companies may process data. In the HR perspective, it’s quite important to get from employees consent for any type of data processing and then store that consent either physically or digitally. For example, if your company is using cameras and video feed on the premises, you have to ask for consent in order that the company can process employee biometrics data through those cameras or video feed. The same goes for the basic recruitment process, for example. If a company has their own job portal, a written consent before the application has to be given in order to process the personal data of the person who applies for the position. It gets confusing the more you dig into it but for sure, the basics have to be covered.

Contracts in labor law

HR Managers and Business Partners have to know the basics of creating a viable contract which mutually binds the employee and the employer to a specific time with specific terms in order to enter a business relationship. Many companies use external lawyers to draft up different types of business contracts but it’s always beneficial for HR to have this knowledge which can be quite costly at times. There are couple of ways in which you enter a business relationship and exit out of them so it’s important for the employer to know how to secure themselves and vice-versa. It probably varies from country to country again, but usually signed contracts determine the eligibility of a business relationship. This is especially important for an exit strategy which may or may not be consensual or mutual. With a risky employee, it’s always best to know all the legal options to securely get out of that business relationship.


In companies where there is no legal department, it’s HR’s job to be familiar with the labor law and all its regulations. A successful employment cannot be executed unless the country’s law is followed so in favor of due diligence, performance excellence and plain violation avoidance, this is mandatory in every company. It’s preferable that at least one HR operative knows these things quite well in order to avoid extra costs from external lawyers.

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