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UK Employment Law – A Guide

UK employment law is highly regulated with a wide range of statutory protections and safeguards governing employees’ rights in the workplace. In this briefing we look at what you, as an employer, need to be aware of to ensure you understand what your obligations and responsibilities are. The legislation is intended to ensure you treat employees fairly while at the same time protecting your position and minimising the risk of employment relations issues and disputes which can end up being disruptive, time consuming and expensive.

We have focused on the rights your employees will have. However, you should also be aware that there is a separate category of “worker” in UK employment law. They have some rights, such as to a minimum wage, paid holiday and protection from discrimination and whistleblowing but they do not have all the rights employees have, such as protection against unfair dismissal or the right to a statutory redundancy payment. Workers tend to be those who are employed on a short-term basis e.g. casual or freelance workers.

What is employment law?

Employment law in the UK encompasses all stages of the relationship from recruitment, during employment itself, when it ends, and in certain circumstances beyond termination.

The employment relationship is governed by a contract (which we look at below) and also by legislation which gives certain statutory protection to employees. UK employment law requires that you provide employees with particular terms of their employment, provides protection from being discriminated against, the right not to be unfairly dismissed, entitlement to a statutory redundancy payment, statutory minimum notice periods, paid annual leave, minimum levels of pay, family friendly rights, health and safety duties and data protection obligations. As a result, there is a significant amount of legislation for you to get to grips with.

UK employment law is derived from legislation which is purely domestic, for example, the right not to be unfairly dismissed and also from EU legislation which was implemented prior to Brexit for example, the right to paid annual leave and employment protection where a business is sold. The UK currently remains subject to existing EU-derived domestic legislation. Therefore, in many respects EU-derived UK employment law is very similar to that of other EU countries. However, it is different to employment law in the US which does not have the concepts of unfair dismissal, termination on notice and there is no employment protection for employees when the business they work for is sold.

How does employment law protect employees?

The numerous statutory protections enshrined in UK employment law give employees rights that you cannot contract out of even if you agree this with them e.g. the right not to be unfairly dismissed.

There is also legislation that applies from day one of the employment relationship. This includes the right to a minimum wage, paid annual leave, protection from discrimination, whistleblowing protection, health and safety obligations and data protection.

Employees are also entitled to minimum periods of notice to terminate the relationship. These are dependent on the employee’s length of service. An employee will be entitled to be given one week for each week of service up to a maximum of twelve weeks. You are entitled to be given one week’s notice from the employee regardless of their length of service. These represent a minimum and a contract can always provide for more notice by both parties.

Contracts

Although there is no legal obligation to provide staff with a written contract, legislation requires that you must provide certain information to the employee in a written statement, which is often referred to as a “section 1 statement”. You must provide this by the start of their employment, and it should include hours of work, job title, pay, sick pay, holiday pay, any benefits, whether there’s a probationary period, place of work, the notice period, pensions, and training details.

It is preferable, for clarity, to have a written contract and you will also want to consider whether there are any other express terms you would like to include which are not covered by section 1. These will depend on the seniority of the employee and the type of work they do. The types of provision that might be relevant include terms dealing with commission or bonuses and post-termination restrictive covenants such as non-solicitation, non-dealing, non-solicitation of other employees and non-competition covenants and garden leave.

Under UK employment law regardless of what is in a written agreement, there are certain terms that will be implied into every contract. For example, for an employee this includes the duty of fidelity and obedience, to work with due care and attention and not to disclose the employer’s trade secrets or confidential information. Your implied duties would include not to destroy the relationship of trust and confidence between you and the employee and to take care of the employee’s health and safety.

In addition to the employment contract, non-contractual policies are an important way for you to manage the employment relationship. They outline your approach and are easier to amend without getting the employees’ consent. There are a few policies which you are legally required to have in place, including disciplinary and grievance procedures and rules. You might also want to include other policies as a matter of good practice such as equal opportunities, data protection, whistleblowing, flexible working, email-internet use, and anti-bribery.

What are the basic employment rights for an employee?

Discrimination

In the UK anyone who is contracted to do work personally (this is a wider category than simply employees) is protected against discrimination on the grounds of sex, race, age, religion or belief, sexual orientation, pregnancy and maternity, marriage and civil partnership, gender reassignment and disability. This protection applies to job applicants, during employment and continues after the relationship has ended. Discrimination can take the form of direct discrimination, indirect discrimination, victimisation and harassment.

There are additional duties that you, as an employer have, in relation to disabled employees under the Equality Act. These include the duty to make reasonable adjustments in certain circumstances to help disabled job applicants and employees.

Unfair dismissal

Unfair dismissal law applies to employees and generally they need two years’ service to bring a claim. However, there are various categories for which no length of service is required, for example, if the dismissal relates to union membership or activity, health and safety activity, maternity or whistleblowing.

If you dismiss an employee, you must prove that the reason for the dismissal is fair and that you followed a fair procedure leading up to the dismissal otherwise you may be liable to compensate the employee if a tribunal finds it was unfair on either basis.

There are five potentially fair reasons: these are conduct, capability, redundancy, that the employee could not continue to work without contravening a statutory duty or lastly a catch-all some other substantial reason that justifies dismissal. The first three are the most common. In order to follow a fair procedure for a disciplinary issue (conduct or capability) you will also need to follow the ACAS Code of Practice on Disciplinary and Grievances.

If you terminate a contract in breach of its terms the employee can also bring a claim against you for wrongful dismissal. This will generally be where the employer has failed to give the correct amount of notice.

Redundancy

As mentioned above redundancy is one of the potentially fair reasons. In this situation, a fair procedure includes giving as much warning as possible, consulting with employee representatives, establishing fair criteria for selection, selecting in accordance with those criteria and looking for alternative employment to avoid dismissal.

If 20 or more employees are being made redundant in a 90-day period, you have additional collective consultation obligations you must comply with, or you will face potentially high financial penalties.

Employees with 2 years or more service are entitled to be paid a statutory redundancy payment which is calculated on the individual’s age, length of service and weekly pay (which is capped at a statutory rate).

Maternity/paternity leave and shared parental leave

All female employees are entitled to 52 weeks’ maternity leave, regardless of length of service. Eligible fathers/partners are entitled to two weeks paid paternity leave. Since April 2015, employees who qualify will be entitled to share their 12-month leave with their husband or partner. Statutory maternity pay, statutory adoption pay and statutory shared parental pay are all available subject to certain qualifying conditions including that the employee has 26 weeks service by the 15th week before the baby is due.

Annual leave

Under the Working Time Regulations all employees are entitled to 28 days paid holiday which is pro-rated for part-time workers. This is relatively easy to administer for permanent employees, but difficulties arise with freelancers and casual workers who work “now and then”.

Health and safety

You have a duty to take reasonable care for the health and safety of your employees which includes ensuring you provide and maintain a safe place of work, a safe system of work and safe equipment.

Data protection

As an employer, you will be under a duty to keep your employees’ personal information safe, secure and up to date. You should not hold on to employees’ data for longer than is necessary and you must follow the data protection rules.

What are the main employment laws in the UK?

The main employment legislation in the UK:

  • Employment Relations Act 1999: This covers the right to be accompanied to a disciplinary or grievance hearing, some trade union rights and maternity and parental leave.
  • Employment Rights Act 1996: This is one of the most significant pieces of UK employment legislation. It includes the s1 statement of employment particulars, whistleblowing protection, the right not to be unfairly dismissed, the right to a redundancy payment, whistleblowing protection, unlawful deductions from wages, the right to request flexible working, time off work including for dependants and parental rights.
  • The Maternity and Parental Leave etc. Regulations 1999: These regulations implement the maternity leave and parental leave provisions.
  • The National Minimum Wage and Living Wage: Overview National Minimum Wage Act 1998 brought into effect a national minimum wage. This applies to all employers whatever their size and different rates apply depending on the age of the employee.
  • Part-time workers Regulations 2000: These regulations ensure that part-time workers are not treated less favourably than comparable full-time workers simply because they are part-time.
  • The Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002: These regulations ensure that fixed-term employees are not treated less favourably than permanent employees and limits the use of successive fixed-term contracts.
  • The Transfer of Undertakings (Protection of Employment) Regulations 2006: These regulations cover the protection of employees’ rights on the transfer of a business or where services are contracted out or contracted back in-house. Employees automatically transfer to the new employer, have protection against being dismissed in connection with the transfer and variations of contract are only permitted in limited circumstances. Business transfers, takeovers and TUPE: Overview
  • The Working Time Regulations 1998 These cover the right to a minimum amount of paid annual leave, rest breaks, 48-hour week maximum and night-time working
  • Equality Act 2010 Equality Act 2010: guidance: This Act covers all aspects of discrimination and equal pay.

Conclusion

You should therefore familiarise yourself with UK employment law so that you are in the best position to manage your employees and ensure that you comply with your obligations.

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