Its crucial for employers and HR professionals to understand the key aspects of UK employment law, and this guide covers the essential information you need to know. Employment law is complex, covering everything from the minimum wage to maternity leave. As a result, it’s vital for employers and HR leaders to understand the basics. This guide to employment law for HR professionals and employers includes everything you need to get up to speed quickly. Let’s dive in.

What is employment law?

At its heart, employment law is the legal framework – a set of laws and considerations – which govern the relationship between employers and their employees. Employment laws set out the legal obligations employers have towards their employees, such as providing a safe workplace, and the rights that employees have, for example, to be paid. Employment law is a rapidly changing area. This is partly because the laws have developed from various sources. The basis of the legal relationship between employer and employee is the employment contract, and the rights and responsibilities, which come from that. On top of that is domestic employment legislation passed by successive UK governments, creating ‘statutory rights’. The UK also used to have European directives to follow until it left the European Union, completing that process in late 2020.

The difference between labour and employment law

While the terms “labour law” and “employment law” are often used interchangeably, they generally mean the same thing. Both terms refer to the legal framework governing the relationship between employers, employees, and, where relevant, trade unions, covering areas such as workplace rights, contracts, and dispute resolution. The distinction is largely one of terminology and regional preference rather than substance.

Why does employment law exist?

Employment law in the UK has been an ongoing process since the 19th century. Back then, legislation was developing into the Abolition of Slavery Act and the Factory Act 1833, which made it illegal to employ children under the age of nine. It exists because the relationship between an employee and employer is not one which is equal in power. Employment law arose out of a need to protect employer and employee relations, and ensure people are treated reasonably and fairly. Over the years, courts and successive governments have tried to protect employees from unfair and unsafe employment practices. That can be anything from ensuring employers give breaks and paid time off, making sure the workplace is safe, and ensuring they follow the terms and conditions of signed employment contracts.

What happens if employers don’t comply with the law?

Most employers are aware of their legal obligation to treat employees fairly and reasonably. But when this doesn’t happen, employment law practices are enforced through a system which includes employment tribunals. Having a legal process enables employees to enforce their rights and seek compensation (for lost wages, for example). Additionally, government agencies can in some cases take action. For example, HMRC has the power to take action regarding minimum wage breaches.

What does employment law cover?

Employment law is wide ranging and covers the laws, rights, and obligations that relate to the employment relationship, from the recruitment processes to redundancy procedures. It includes:

• Discrimination at work
• Pay and benefits
• Hours of work, rest, and holidays
• Competition and confidentiality
• Notice periods
• Fair reasons to dismiss
• Redundancy procedures
• Sickness pay
• Rights around maternity, paternity and parental leave, and flexible working
• Obligations to employees with disabilities
• What happens to employees when a business is sold or transferred

Employment law and different types of workers

What employment rights a person has depends on their employment status. There are two categories that have employment rights:

1. Employees
2. Workers

If a person is genuinely self-employed, they will not have employment rights. Determining a person’s employment status is often a tricky question. The tribunals and courts are frequently called upon to decide status issues; the Uber and Pimlico Plumbers cases are two recent high-profile case study examples. Remember that while it may seem appropriate to treat agency workers as workers, they could be an employee of the agency.

Right for employees

The line between an employee and a worker is not always clear. Employees have an obligation to do work personally for an employer in exchange for pay and are not allowed to take a week off without notice or permission or send someone else in to do their job. An employer can make sure employees are under a degree of control in relation to that work, what they do, when they do it and how. In exchange for this, employees have far more employment rights than workers.

Rights for workers

The big difference between a worker and an employee is that a worker is not obliged to accept offers of work and therefore the work is viewed as casual. Here’s how that difference can play out. An employee is contracted to be in the office, working five days a week. So, unless they are unwell or have booked annual leave, they must show up. If they don’t, an employer can discipline them or even dismiss them. However, there’s no such expectation of a casual worker. If an employer offers a worker five days’ work one week, and the worker accepts, the worker will be expected to attend work. But once that ‘assignment ends’ a worker is not expected or required to work the next week. So, if the employer offers work the following week, the worker can turn it down.

Rights for self-employed workers

If a person is genuinely in business on their own account, they won’t be an employee or a worker. However, sometimes it can be hard to decide where the lines are drawn when a person is an individual consultant providing a company with personal services.

Part-time worker’s rights

Part-time workers are entitled to not be treated less favourably because of their part-time status than their equivalent full-time colleagues. This applies in relation to pay, benefits,training and career development. The general principle is to do things on a pro rata basis. For example, if an employee works three days a week, they would be expected to be paid three fifths of the equivalent full-time worker.

General obligations to employees

Employers have a general obligation to stick to their contractual obligations and act within the employment contract. These include:

• A safe working environment, with the correct number of breaks and holidays
• Enough resources and support
• At least the National Minimum Wage or the National Living Wage rates
• A workplace free from discrimination and harassment

Relevant employment laws

There are many different pieces of legislation which touch upon the employment law relationship. The main ones include the Employment Rights Act 1996, the Equality Act 2010, and the Employment Act 2002. While these Acts date back to the nineties, they are regularly amended and updated to reflect the latest legal framework. Here are some of the legal requirements HR professionals should understand that stem from these employment laws.

National Living Wage and Minimum Wage

Employers must legally pay their staff in line with the National Minimum Wage Act 1998 or the National Living Wage depending on the age of the employee and whether they are an apprentice. The rates change on 1 April every year and employers must keep to them. As of April 2024, the hourly rates are:

• Age 21 and over: £11.44 – this is the National Living Wage
• Age 18-20: £8.60 – National Minimum Wage
• Under 18s and apprentices: £6.40 – National Minimum Wage

Contract of employment

An employment contract is a legally binding agreement between an employer and an employee. At its simplest, it’s like any legal contract. It sets out the agreement of what is being exchanged; in this case, work for pay. However, an employment contract will have special features implied in it by law, without needing to be written down. These include:

• Trust
• Confidence
• Fidelity
• Good faith

Trust and confidence, for example, are about treating each other reasonably. It’s about not acting in a way that would have the effect of destroying the relationship. A breach of this term would be serious enough to mean the employer or employee could end the contract immediately.

Flexible working

Since the COVID-19 pandemic, there has been a fundamental change in expectations around flexible working. During the pandemic nearly half of employers (49%) expected an increase in staff working from home or remotely all week, according to research. Some organisations encourage flexibility. However, an employer doesn’t legally have to offer the arrangement. But it does have to consider flexible working requests if an employee:

• Worked for the employer for 26 weeks or longer
• Are legally an employee (not a worker)
• Haven’t made other flexible working requests in the last 12 months

While flexible working is typically associated with parents or carers, any employee (subject to the criteria above) can make the request. Employers need to follow the Acas Code of Practice on flexible working requests, consider the request fairly, and make a decision within three months. Employers will also have to explain the reasons for denying any request, while employees no longer have to explain the impact of their request. These changes were made with the introduction of the Employment Rights (Flexible Working) Act 2023.

Unfair dismissals

All employees with two or more years’ continuous service have a right not to be unfairly dismissed. This means the employer must follow a fair procedure and have a fair reason to dismiss someone. There are five potentially fair reasons to dismiss an employee:

1. Capability
2. Performance
3. Conduct
4. Redundancy
5. Illegality and some other substantial reasons

Constructive dismissal

When an employer commits a serious breach of contract, the employee has the right to terminate the agreement immediately by leaving their role. This is known as constructive dismissal and may form the basis for a legal claim against the employer. Examples of breaches of express terms in the contract include:

• Failing to pay the employee as agreed
• Requiring them to perform duties not outlined in their employment contract

Alternatively, a breach of implied terms may occur if the employer creates an untenable working environment, such as:

• Allowing bullying or humiliating treatment
• Failing to provide a safe workplace

For a constructive dismissal claim to be successful, the breach must be serious enough to justify the employee’s decision to resign.

Wrongful dismissal

Unlike unfair dismissal, which is a statutory claim, wrongful dismissal is a contractual issue. A wrongful dismissal is when the employee is dismissed without proper notice as stated in the contract. Take for example, an employee who is entitled to a months’ notice in their contract. If an employer dismisses with no notice or less than a months’ notice, the employee is entitled to bring a breach of contract claim called wrongful dismissal for the unpaid notice. Employers are, however, legally able to dismiss employees without notice, if an employee is guilty of gross misconduct. Examples include:

• Fraud
• Theft
• Dishonesty
• Violent behaviour
• Serious breaches of organisational procedures (such as health and safety or data protection breaches)

Disciplinary procedure

Employers should have a disciplinary procedure which sets out the process they will follow when an employee is called to respond to disciplinary allegations. Not having a procedure is itself a breach of the Acas Code of Practice. Typically, a disciplinary procedure involves investigating the concern. Where there is a case to answer, an employer would set out the allegations, evidence in writing, and invite the employee to a disciplinary hearing. If the employee appeals, an appeal meeting would take place in front of an appeal manager (where possible, this is done by someone in a more senior role, with no prior involvement in the process). The appeal manager hears the appeal and then confirms the decision in writing.

Grievance procedure

This is the process to be followed when an employee wants to raise a formal complaint. A grievance procedure typically involves an employee setting out concerns in writing and sending them to the person named in the policy, who will then consider the issue at a grievance meeting and provide a written outcome, with a right of appeal. Most issues should be resolved informally so grievances are usually serious. They can include:

• Bullying
• Discrimination
• Unfair treatment

Employers are expected to follow the Acas Code of Practices on grievances, and not doing so may result in an uplift of up to 25% of any compensation awarded to an employee. Ignoring or mishandling a grievance can also be a basis for employment claims, such as constructive dismissal.

Working Time regulations

The Working Time Regulations set out the legal framework for working hours, rest breaks, and paid leave to ensure employee wellbeing and compliance with the law. Key provisions include:

• Rest breaks: Employees over 18 have the right to a 20-minute uninterrupted break if they work more than six hours a day.
• Daily rest: Employees are entitled to at least 11 hours of rest between working days.
• Weekly rest: Employees must have one rest day per week, which can be averaged over a fortnight (e.g., two days off over 14 days).
• Maximum working week: The legal limit is 48 hours per week, averaged over a reference period. Employees may work more than 48 hours in a given week, provided it balances out over time. Exceptions apply, such as for driving roles.
• Paid annual leave: Employees are entitled to 5.6 weeks of paid leave per year, which for full-time staff equates to 28 days, inclusive of bank holidays.

These regulations establish clear standards to protect employees from excessive working hours while ensuring adequate rest and holiday entitlements.

Discrimination

Employers must ensure the workplace is free from discrimination, as The Equality Act 2010 makes it unlawful to discriminate against a person because of a protected characteristic, such as:

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

There are different forms of discrimination in the workplace including direct and indirect discrimination, harassment, and victimisation. An example of direct discrimination is an employee being unfavourably treated because of a protected characteristic, compared to someone who does not have that protected characteristic. There’s also indirect discrimination. This is where someone with a protected characteristic is at a substantial disadvantage when it comes to a work rule, practice or condition, even though that requirement applies to everyone. If the employer cannot justify the requirement, it will amount to indirect discrimination. Harassment and victimisation in this case, is where because of a protected characteristic someone is treated in a way that violates their dignity, or creates a hostile, degrading, humiliating or offensive environment.

Whistleblowing

Whistleblowing, or making a protected disclosure, occurs when a worker raises concerns in the public interest about suspected legal breaches or serious wrongdoing. The information must be disclosed to the employer or an appropriate regulatory body prescribed in the legislation. A protected disclosure is a qualifying disclosure made in good faith by a worker who believes it reveals serious misconduct or breaches of the law. Employers are prohibited from subjecting whistleblowers to detriment or dismissal as a result of their actions. Importantly, the usual two-year service requirement for unfair dismissal claims does not apply to cases of whistleblowing dismissal. This legal protection ensures that employees can safely raise concerns about unethical or illegal behaviour without fear of retaliation.

Maternity and family leave

For HR professionals and employers, staying informed about maternity and family leave regulations is essential to ensure legal compliance and create a supportive workplace for employees. Family leave policies not only protect employees’ rights but also foster a culture of inclusivity and respect, which benefits overall organisational success.

What are Maternity and Paternity leave?

Maternity and paternity leave provide parents with the necessary time to care for their new child during a critical period. Maternity leave is typically available to mothers before and after childbirth, while paternity leave is usually shorter and granted to fathers or partners soon after the child’s birth or adoption. These provisions allow parents to:

• Bond with their child during early stages of life
• Recover physically and mentally after childbirth or adoption
• Adjust to their new family circumstances without work pressures

Importantly, maternity and paternity leave policies are designed to secure the professional roles of parents, protecting them from discrimination or disadvantage for taking leave.

Rules of Maternity Leave

Employees in the UK are entitled to up to 52 weeks of maternity leave, with Statutory Maternity Pay (SMP) available for up to 39 weeks. SMP consists of:

• 90% of average weekly earnings (before tax) for the first 6 weeks
• £184.03 per week (or 90% of average weekly earnings, whichever is lower) for the next 33 weeks

To qualify for SMP, employees must meet the following conditions:

• Earn at least £123 a week on average
• Provide the correct notice and evidence of pregnancy
• Have worked continuously for their employer for at least 26 weeks up to the 15th week before the expected childbirth week (known as the “qualifying week”)

Rules on Paternity

Eligible employees are entitled to up to two weeks of paternity leave, which must be taken within 56 days of the child’s birth or adoption. To qualify, employees must have:

• Worked continuously for their employer for at least 26 weeks by the end of the 15th week before the expected childbirth week
• Given the employer appropriate notice

Statutory Paternity Pay (SPP) is either £184.03 per week or 90% of the employee’s average weekly earnings, whichever is lower. You can learn more about Maternity and Paternity Leave in our dedicated guides.