New legislation to be aware of includes new dismissal, dispute resolution and grievance procedures.

Employment Act 2002 (Dispute Resolution) Regulations 2004

These Regulations affect every employer in the UK.  They cover reform of employment tribunals and dispute resolution in the workplace.   There are mandatory changes to written statements of main terms and conditions (every employee must therefore have a contract).

Employers must follow a certain framework when disciplining or dismissing staff, or dealing with employee grievances, in order to be able to claim a statutory defence at an employment tribunal.
 
This law is expected to have a huge impact on small businesses, with more than 12 ways to fail the new mandatory procedures.  Employers need to be aware that non-compliance can both amount to an automatic decision of unfair dismissal at tribunal, as well as an increase of up to 50% in the compensation awarded. 
 
For DTI advice on the changes to the law, see: http://www.dti.gov.uk/er/resolvingdisputes.htm.

Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004

The new law relates to how employment tribunals are carried out, and aims to make the process more efficient for both employers and employees.  The new Regulations introduce new procedures and documentation for applying for tribunal.  These have been redesigned to be more user-friendly and to provide more up-front information for employers (DTI guidance online).