Employment Law in the UK: An Overview for HR Leaders

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UK employment law is already a massive topic, it can be hard to simply find the basics. This article is meant to point HR leaders towards trustworthy sources that share the essentials of employment law specifically in the UK. We'll also direct you to blog posts we’ve already researched on several topics as well as relevant government websites.

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What Is UK Employment Law?

Essentially, employment law in the UK is a collection of laws and other legal considerations that govern the relationship between employees and their employers. For employers, it governs what they can ask of employees, what they are entitled to provide, and what constitutes an employee’s official rights at work.

Why Is Employment Law So Important?

Employment law is important because it helps protect both employers and employees. The purpose of it is to bring clarity about working relationships to everyone involved. While laws are often believed to be about fairness, it’s actually more accurate to say that employment law is just as much about establishing clarity.

Ultimately, employment law, specifically for UK employers, is critical because it can introduce legal frameworks into some of the most common organisational processes. These include:

As legislation has evolved, other human benefits have also arisen, however, as much employment law also helps us combat discrimination, and effectively promote diversity, equality and inclusion at work.

What Topics Does Employment Law Cover?

Employment law covers everything from the moment a job is advertised to what happens when an employee leaves a business – including what happens to their information after they’ve left.

So, within the vast amounts of information, what do HR managers really need to know about? We’ve gathered information on eight very important parts of employment law here…

  • Recruitment and hiring

  • Contracts of employment and working hours

  • Statutory leave and time off

  • Payroll

  • Pensions

  • Health and safety at work

  • Dismissing staff and redundancies

  • COVID-19 employment laws and workforce FAQs

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1. Recruitment & Hiring

Where do you begin when it comes to employment law on recruiting people? Are there rules and guidance about advertising a job, selecting the right candidate and keeping records? Actually, yes. The gov.uk site on recruiting and hiring is probably the best place to start when considering laws that protect employees and employers.

You can also take a look at the helpful articles we’ve written about recruitment and hybrid recruiting. Although these are more for informational than legal purposes, you might find them helpful.

At a bare minimum, it’s really important to consider whether your hiring practices are fair and non-discriminatory. This blog post on diversity management can help and this gov.uk article for employers on preventing discrimination is also worth reading. For example, do you know the ins and outs of indirect discrimination?

2. Employment Contracts & Working Hours

Once you’ve taken the decision to hire someone the most important employment law advice we can share is: Ensure they have an employment contract. Most UK employment law issues are resolved by referring to this contract.

Please refer to the gov.uk section on employing people and contracts for the most thorough government-provided guidance on everything from different contract types to working hours, flexible working and employer relocation.

If you start with government guidance and then make sure your contracts include information on as many workplace-related issues as possible, you’re less likely to need formal legal advice.

Everything from probationary periods to what type of contract to have (zero-hours or fixed-term), to overtime (and how to calculate it) can and should be in the contract or in appendices. Also be sure to define someone’s employment status before creating any contract, as many UK laws distinguish between whether someone is a worker or an employee.

3. PTO

Everyone needs time off from work and this is enshrined in UK law. Almost all workers are legally entitled to 5.6 weeks of paid holiday a year (this is also known as statutory leave).

There are also various other reasons why employees can legally take time off. For example, laws protect employees’ rights to take time off when they’re ill and be paid (statutory sick leave and pay) and when someone they support dies (compassionate leave). However, when it comes to more vague issues like taking a sabbatical, employers should address this issue in employees’ contracts.

Click here to read our complete guide to paid time off in the UK.

4. Payroll

Dealing with payroll is often more of a finance issue than an HR one, but both teams need to collaborate – especially when it comes to telling HMRC about a new employee, issuing P45s, P60s, salary slips and other official documentation.

The most important official resource to consult when dealing with payroll issues is the gov.uk website but, from a legal perspective, it’s important to be aware of various laws protecting employees in the including various employment law acts including equal pay (The Equality Act 2010), working time (the Working Time Regulations 1998), and the national minimum wage and living wage, which increased on the 1st of April 2020.

It is also critically important to note this key labour law point: it is, in fact, a criminal offence for employers to not pay someone the National Minimum Wage or National Living Wage, or to fake payment records.

5. Pensions

When considering UK employment law and pensions, the best place to start is The Pensions Regulator. Whether you employ one employee or thousands of them, you are considered to be an employer and, as such, you have certain legal duties Under the Pensions Act 2008. According to The Pensions Regulator, "every employer in the UK must put certain staff into a workplace pension scheme and contribute towards it. This is called automatic enrolment”.

The law firm Burges Salmon has a guide to UK employment law. It says that “from October 2012 onwards employers are required to automatically enrol certain workers into a pension scheme, make contributions on their workers’ behalf and register with the UK Pensions Regulator”.

If you don’t comply with UK pension law The Pensions Regulator says “you may face enforcement action including compliance notices, and penalty notices (fines)”. (You might also want to consult gov.uk for advice and guidance on how to set up and manage a workplace pension scheme if you don’t have one in place already.)

6. Health & Safety At Work

Organisations should care deeply about occupational health issues and mental health at work, Don’t forget, though, that all employers have a legal responsibility under the Health and Safety at Work Act 1974 and the Management of Health and Safety at Work Regulations 1999 to ensure the health, safety and welfare at work of their employees. A list of relevant legislation, as well as guidance, is available on the HSE website.

A good place to continue on this topic is the CIPD’s knowledge hub on health and safety as it covers many aspects of UK employment laws on health, safety and stress at work, including employers’ obligations.

7. Dismissing Staff And Redundancies

One of the thorniest employment law issues is what happens when employee relationships are terminated – i.e. when someone is dismissed, fired, asked to leave or made redundant.

The basics of compulsory redundancy, voluntary redundancy, and redundancy consultation periods can all be found in each of the aforementioned links.

In addition, we’ve provided a lot of thorough, well-researched blog posts on an employee’s notice period, the rules and processes of issuing written warnings, how to calculate employee attrition rates and what they mean, redundancy pay and even succession planning which you might like to check out.

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8. COVID-19 Employment Laws & Workforce FAQs

Any article on current UK employment law would not be complete without referring to the legislation surrounding COVID-19.

To find out more about supporting employees, putting communication measures in place, the responsibilities employers have to their employees, what to do if employees have symptoms of the virus and much more, turn to the Local.Gov.UK FAQs on COVID-19 employment law.

Be aware that, as of the 28th of September 2020, people have been required by law to self-isolate if they test positive or are contacted by NHS Test and Trace. Any policies or procedures you have relating to COVID-19 in the workplace must be sure to reflect this.

Keep Employment Law Top Of Mind Today

One of the most important things you can do, as an organisation, is ensure that you are remaining compliant with any of the applications you use. That means having an HR software that can store employee data securely, create and have contracts and other policies signed, and can ensure an effective and legal offboarding or redundancy process. Click the button below to learn about compliance with Personio.


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