Managing director Peter Done's tells Chris Dooley, Industry and Employment Correspondent, how his firm can save companies from human resource headaches.

Peter Done is still grateful to the lawyer who gave him bad advice about how to deal with an "awkward employee" more than 20 years ago. Had it not been for that lawyer, the bookmaking business he then operated might have been saved a compensation payout and legal bill that totalled more than £7,000 sterling (€9,960).

But the multimillion pound enterprise he now owns, Peninsula Business Services, might never have come into existence.

In 1983, Mr Done learned what many employers have since learned to their cost. Thinking you are in the right is never sufficient grounds for dismissing or disciplining an employee - you must follow procedures to the letter. In the intervening 22 years, the procedures have become increasingly exacting and complex.

That's why the Chambers of Commerce of Ireland expects many of its 12,000 members to sign up for a new service, Chamber HR, which is being launched today.

Through a link-up with Peninsula, chamber members will be able to outsource their entire human resource operations.

Mr Done's company draws up tailor-made employment contracts for its clients, mainly small and medium-sized enterprises, and offers a 24-hour telephone advice service.

It also advises clients on cases such as unfair dismissal or discrimination claims brought by employees, and represents them before bodies such as the Employment Appeals Tribunal and the Labour Court.

Peninsula will fund all of the legal costs and will even pay the cost of any award to the employee concerned - provided the client has implemented its advice each step of the way.

Even a client that doesn't follow all of the advice will have its legal costs covered.

"Occasionally a company will say 'look, we're sorry, we don't care what you say, we are going to part company with this person'," says Mr Done.

"In that case we will still advise them and help them to minimise the risk. If it goes to a tribunal, we will still pay the cost of litigation. We won't abandon the client, but if they have disregarded our advice, we won't pay the award made against them."

The risk to Peninsula in providing this service is covered by insurance and, Mr Done readily acknowledges, there are caps on possible pay-outs.

In unfair dismissal cases, for example, clients will be covered for up to €50,000 for an individual case and €1.5 million in a single year. Very few Employment Appeals Tribunal awards, however, come anywhere close to €50,000.

Nevertheless, Mr Done points out, Irish firms spend millions of euro each year defending more than 10,000 cases taken annually to rights commissioners or the Employment Appeals Tribunal, or funding awards.

The primary objective of Peninsula's service, he says, is to help them to prevent cases from getting so far in the first place.

"Prevention is obviously better than cure. Often as a result of our involvement an employee who was about to be dismissed will end up saving their job."

The most common mistake made by employers, he said, is to sack employees "in the heat of the moment". A rash dismissal can end up costing an employer a lot of money, whereas if they seek the right advice and follow procedures, "they can get to the same result anyway at the end of the day".

Mr Done thought he was following procedures when his dismissal of that "awkward employee" in 1983 became a turning point in his business life. At the time, he and his brother, Fred, were seeking to expand the bookmaking business they had founded in the 1970s, after they had quit their jobs as managers in a small betting office.

They began by buying a bookie's office with €1,000 each from their savings. Today there are more than 300 Done Bookmakers across the UK, now run by Fred Done, although Peter remains a major shareholder.

In 1983, when the chain had expanded to 67 branches, the brothers bought a group of 10 shops from the Tote bookmakers. A female employee who had been with the Tote for 21 years didn't want to remain and sought a redundancy pay-off.

Mr Done says the terms and conditions offered by his company were "a good bit better" than what staff of the 10 shops had previously enjoyed, and the company insisted that the employee either accept them or leave.

A stand-off ensued and, acting on legal advice, the Dones dismissed the employee. She took a legal action against them and secured £4,500 through a settlement.

"We took the lawyer's advice right down the line and then, on the steps of the court, he advised us to settle. We ended up with legal costs of about £3,000 as well as the compensation, which was quite a lot of money at the time."

Shortly afterwards he was approached by someone who asked if he was interested in running a service offering advice on how to deal with employment tribunals, and the enterprise which is now Peninsula was born.

The company initially struggled until Mr Done increased his day-to-day involvement and turned its fortunes around.

It has 15,000 clients in the UK. However, Ireland, where it currently has about 1,000 companies on its books, has been targeted as the major area for expansion over the next couple of years.

Mr Done hopes this can be largely achieved through the link with the Chambers of Commerce, whose members will be offered discounted access to Peninsula's service.

The company, which has a turnover of £36 million and more than 500 employees, has 20 staff based in Ireland.

Irish clients who use the UK-based 24-hour telephone advice service are automatically put through to Irish employees of Peninsula who are fully versed in the Republic's employment laws.

The cost of the service depends on the size of the client company and the level of support sought. A typical British client, with 20 employees, would pay about £7,000 for the full range of services offered by Peninsula.

Coincidentally, that's what a lawyer's advice cost Mr Done and his brother back in 1983.

"It turned out to be one of the best things that ever happened to me," he says. "I think I owe that lawyer a drink."