Managers who use friendly banter as an ice-breaker in job interviews could find themselves on the wrong end of an employment tribunal unless they are very careful, a Midlands-based lawyer has warned.

Ranjit Dhindsa, employment law partner in the Midlands office of international law firm Reed Smith, says interviewers can unwittingly overstep the mark in making informal chit-chat with candidates. Unguarded comments - even innocent ones - could be costly.

"Prospective employees can sue companies even before they are on the payroll, as a result of what happens at the recruitment stage," said Ms Dhindsa. She recounts one situation in which an Indian candidate mentioned on his CV that he enjoyed Indian films and music.

"Even before he had a chance to say 'hello' the inter-viewer was making remarks comparing Bollywood to Hollywood," Ms Dhindsa said.

"The interviewee was completely thrown by this, because he felt he had been stereotyped from the moment he walked into the room."

She believes similar examples are probably occurring in workplaces across the Midlands every day of the week, and has drawn up a ten-step guide to recruitment aimed at hard-pressed human resource departments. The advice is intended to protect unwary companies from bad publicity and the punitive fines which can be imposed by employment tribunals.

"Claims are usually based on allegations of unlawful discrimination on the grounds of race, sex, religion, sexual orientation, disability - and soon, age," she added.

She says employers should identify and train those involved in recruitment on questioning techniques, how to gather information and assess candidates. They should also do their homework, making sure they know the details of the vacancy and the skills needed to fill it.

Adverts should not be misleading or confusing and interviewers need to be aware not to ask potentially discriminating questions relating, for example, to marital status, family or religion.

Any offer of employment should be conditional on satisfactory references, ensuring the individual has the right to work in the UK, and that other statutory provisions are not breached such as laws relating to employing young workers or the minimum wage. If the post is of a sensitive nature, consent may be required to carry out criminal checks. n Can you dismiss staff because of their character?

James Tait, associate at Birmingham law firm Shakespeares, warns that if disciplinary action possibly leading to dismissal is taken, one of the legally, and commonly used, "fair" reasons, which normally include capability, conduct and redundancy, must be applied. However, there is also a further option known as "some other substantial reason", a catch-all provision applied if the reason for dismissal is not clear.

This option came under the spotlight last year when an NHS finance director was dismissed due to a disabling and negative personality, management style and approach.

The difficult personality of the director had a harmful impact on the team and produced negative results. He lost his appeal and the court ruled that the consequences of his bad behaviour should fall under "conduct" or if there was any doubt, certainly the "some other substantial reason" clause.