UK Employment Laws Explained

There are approximately 5 million limited companies in the UK, and between January to March 2024, there were 24.85 million people employed on a full-time basis and 8.15 million part-time workers. UK employment laws are in place to make sure that both employers and employees are protected. Providing legislation on dismissal, holidays, pay, discrimination and more, these laws protect worker’s rights while also safeguarding an employer’s interests and keeping the relationship between the two fair.

What is employment law?

At first glance, UK employment laws can appear complex and varied, especially for business owners who need to get to grips with UK employment law while still running and growing their day-to-day business.

Ultimately, employment laws in the UK (of which there are many) are there to protect businesses, outline what their obligations are toward their employees and what protections they have as business owners. They keep the employment relationship fair to both parties.

So, for example, UK employment laws safeguard organisations because they set out guidelines for what to include in a contract – such as holiday entitlement, pay, hours of work and formal notice periods. Contracts protect employers because they provide clarity and a reference point to make sure both employee and employer are singing from the same hymn sheet.

On the other hand, UK employment laws are also there to protect employees, from hiring practices to conduct in the workplace and fair pay. For example, in the UK, businesses must pay the National Minimum Wage based on a staff member’s age, and all staff members over the age of 21 are entitled to the National Living Wage.

Employees are covered from the moment they enquire about a job by the Equality Act 2010, which prohibits discrimination against candidates (and employees) based on the fact that they have one of nine protected characteristics – including gender, race or disability. When a staff member joins the team, they are also protected by Health & Safety laws, set out in the Health & Safety at Work Act 1974. These ensure all staff members have the right to a safe working environment.

What does UK employment law cover?

Employment law is a vast area of the legal system and covers a whole host of topics that are involved in the employment relationship – largely governing processes and policies you can put in place.

Because it’s such a vast range of legislation, producing an exhaustive list of the areas that employment law touches in some way would make for a very long page! But some of the most common areas that you’re likely to come into contact with as a business owner include employment contracts, equal pay, holiday entitlement and pay, working hours, grievance procedures, disciplinary procedures, maternity and paternity leave, different types of discrimination, equality and diversity in the workplace, reasonable adjustments for employees with disabilities, the redundancy process and much more.

What is unfair dismissal?

Dismissal describes the process where someone in a position of authority within a business ends an individual employee’s employment. Under employment legislation there are 5 potentially fair reasons for dismissal. Unfair dismissal is where the reason for dismissal does not fall within one of those fair reasons or where the rules around how to dismiss someone aren’t followed properly.

UK employment law currently states that if an employee has two or more years of continuous service with you, they have the right to bring a claim against your business if they believe that they’ve been unfairly dismissed. However, there are many cases where dismissal connected to specific reasons are seen as automatically unfair and the employee can bring a claim from day one of their employment. Examples of issues that would constitute automatically unfair dismissal include (but aren’t limited to) dismissals related to:

• Whistleblowing
• Raising Health & Safety issues
• Being part of a trade union
• Asserting certain legal rights (e.g. asking to be paid minimum wage)

What is an employment contract?

An employment contract is a written agreement between an employer and an employee, stating the terms and conditions for that individual’s job role. The contract will outline the employee’s basic responsibilities, conditions and duties, including their working hours, pay and benefits including holiday entitlements. Beyond this, the contract may also state any expectations the company has, for example, overtime guidelines or claims for vehicle mileage. Employees should raise any questions with their employers before signing this contract. Employment contracts are usually consulted in legal cases if an employee makes a claim against their employer.

What is discrimination in the workplace?

Discrimination in the workplace concerns the unfair treatment of an employee based on their possession of certain protected characteristics.

The protected characteristics are outlined in the Equality Act 2010 and are:

• Sex
• Race
• Religion or belief
• Pregnancy and maternity
• Gender reassignment
• Disability
• Marriage and civil partnership
• Sexual orientation
• Age

Discriminating against any employee based on any of their protected characteristics is against the law and can result in a discrimination claim against your business. In UK employment law there are generally four types of discrimination: direct, indirect,harassment and  victimisation 

Direct discrimination would be treating someone unfavourably (such as not promoting someone) because they have a protected characteristic.

Indirect discrimination largely deals with any policies, rules or procedures your business has in place that may place a particular group of people at a disadvantage because of protected characteristics. A good example of this would be specifying that employees are not allowed to wear head coverings, which would for example adversely affect some Muslims. In order to defeat a claim of indirect discrimination, an organisation would have to be able to justify the rule, for example, if they could say that the rule was in place because of health and safety concerns around machinery.  

Harassment is unwanted conduct that relates to someone’s protected characteristic and which has the purpose or effect of violating the person’s dignity; or making the workplace intimidating, hostile, degrading, humiliating or offensive for that person.   For example, an employee regularly telling offensive jokes about members of the Jewish religion, in order to upset a Jewish colleague. 

Victimisation is treating someone badly because they have brought a claim under the Equality Act; given evidence in support of a claim; or done anything else in connection with the Equality Act.  For example, refusing to promote someone because they had given a witness statement in support of a claim brought by the Jewish colleague above. 

Finally, employers are also under a duty to make reasonable adjustments to any physical feature or practice/policy that puts a disabled employee at a substantial disadvantage, compared to employees who are not disabled. 

What are the employment laws in the UK?

There are many employment laws in the UK that govern different elements of how you should do business and behave as an employer. Some of them you’ll be really familiar with because you encounter them on a regular basis, others you may only come into contact with occasionally.

Some of these laws will deal directly with issues relating to equality in the workplace – which are essential to making sure you avoid claims of discrimination, as outlined above. Others are more geared toward making sure your business is run safely and effectively.

Here, we outline some of the major employment laws that affect UK business owners, and a brief overview of what they cover. Think of it as a quick guide to essential employment legislation.

Employment Rights Act 1996

The Employment Rights Act 1996 is a comprehensive act covering many significant employment rights including around contract provisions, pay, whistleblowing, unfair dismissal, flexible working, family leave and redundancy.

Employment Relations Act 1999

The Employment Relations Act 1999 contains (amongst other laws) the right for an employee to be accompanied at a disciplinary or grievance hearing by a Trade Union representative or colleague.

Maternity and Parental Leave etc. Regulations 1999

The Maternity and Parental Leave etc. Regulations 1999 outlines maternity rights and the rights that parents have to take up to 18 weeks off work unpaid before their child’s 18th birthday, provided they have at least a year’s service.  .

National Minimum Wage Act 1998

By law, UK employers must pay at least the minimum wage, which varies depending on age and also usually increases in April each year. In addition, there is a separate apprentice minimum pay rate. Employees over the age of 21 are also legally due at least the National Living Wage.

Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000

The Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000  requires that any part-time workers you employ do not receive any less favourable treatment (pro-rata) than your full-time members of staff..  Similar protection is in place for employees on fixed-term contracts.  

Transfer of Undertakings (Protection of Employment) Regulations 2006

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) protect employee rights during a business transfer, for example, if a new company has bought an existing business or has taken over a service contract. It gives transferring employees the right to transfer on the same terms and conditions as with their previous employer.

The Working Time Regulations 1998

These Regulations govern when people can work, including maximum weekly and daily limits, rest breaks and rules on night working. They also include rules on minimum holiday and holiday pay.

Equality Act 2010

As detailed above, this protects employees and workers from being treated unfavourably because of a protected characteristic and has rules on reasonable adjustments for disabled employees.  

The Carer’s Leave Act 2023

The Carer’s Leave Act 2023  offers employees in England, Wales and Scotland the right to take unpaid leave to care for a dependant with long-term needs. From April 2024, employees can take at least one week of unpaid leave per year, with the flexibility to use it in full or half days.

Learn more in-depth details about this legislation in our blog ‘What is the Carers Leave Act 2023?’.

The Protection from Redundancy (Pregnancy and Family Leave) Act 2023

The Protection from Redundancy (Pregnancy and Family Leave) Act 2023 strengthens the protection in a redundancy situation for those who are pregnant, on adoption or maternity leave, and people using shared parental leave, by extending the protected period.

See our blog on what is the Protection from Redundancy (Pregnancy and Family Leave) Act?

Employment (Allocation of Tips) Act 2023

The Employment (Allocation of Tips) Act 2023 aims to ensure fairer treatment of employees who receive tips, with requirements for how employers must deal with qualifying tips, gratuities and service charges.

What is Health and Safety in the workplace?

Under the Health and Safety at Work Act 1974, employers have a legal responsibility to make sure that they provide a safe working environment. This will include carrying out risk assessments, offering staff training, and providing adequate safety equipment.

Some employers may also be subject to other laws, for example, those working with hazardous substances, or roles that require manual handling.

What is data protection?

Data protection concerns the access, storage and use of personal data including employees. Under the Data Protection Act 2018 (with considerations for General Data Protection Regulations), employers must follow strict rules around how they store, retain and use employees’ personal data.  There are additional rules if the data deals with sensitive information, such as ethnic background and health issues.

What employment law changes has the Labour Government proposed?

The Labour government has promised a new Employment Bill within their first 100 days in government. As a top legislative priority, Labour plans to make over 30 key changes to current employment laws. So, here are the top 11 takeaways from Labour’s ‘Plan to Make Work Pay’ that we think will have the biggest impact on businesses like yours:

• Unfair dismissal rights from the very start of employment (subject to probationary periods)
• Introduce a Single Enforcement Body for employment rights (the Fair Work Agency)
• End “exploitative” zero-hours contracts
• Create a single worker status
• Flexible working from day one
• A ‘right to switch off’ model for workers
• Tribunal time limit increased from 3 to 6 months
• Pay changes (National Minimum Wage, Lower Earnings Limit, SSP waiting period)
• Changes to equality and harassment rights/acts
• An effective ban on fire and rehire, unless genuinely no alternative
• Trade union legislation changes

Get Employment Law advice from Citation

If you’re looking for Employment Law services, Citation is here to guide you through the difficult compliance processes that protect your business and your people.

Our team comprises either qualified solicitors or HR practitioners with many years of experience.  We are on hand to help you write compliant employment contracts, build workplace policies and employee handbooks as well as being available 24/7 on our advice line, to give you support and guidance should an HR or Employment Law issue ever arise. It’s like having your own HR team on the other end of a phone call.

For more information on how our team of HR & Employment Law /experts can support your business with key insights, guaranteed advice and cutting-edge updates in line with legislation, contact the Citation team today.