Any employer-employee relationship involves, by definition, a contract between the parties - whether that contract be encompassed in a formal written document or a loosely defined oral agreement.
It is unwise for any employer not to have written contracts with all employees where the rights, duties and responsibilities of both parties are clearly laid out and not subject to conjecture or interpretation.
The first essential then, for every employer, is to have written contracts of employment.
Also essential to protect your business from claims against you by employees, and also to achieve best practice, are written documents which state your policies and procedures for such things as disciplinary and grievance procedures, policy on employees’ use of email and access to the Internet whilst at work.
As an employer you should make yourself generally aware of the rights of employees; for example the right for maternity, parental and paternal leave, rights to annual leave, and freedom from discrimination.