Employment Law in the UK: An Overview for HR Leaders (2024)

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:

  • Hiring processes

  • Dismissal processes

  • The redundancy process

  • How people are treated at work

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 thornie*st 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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Employment Law in the UK: An Overview for HR Leaders (2)

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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.

Employment Law in the UK: An Overview for HR Leaders (2024)

FAQs

What HR policies are required by law UK? ›

There are only three that British law requires. Health & safety policy (if you have more than five employees). Disciplinary and dismissal policies. Grievance policy.

What is the main law that we have in the UK to protect all our HR in the UK? ›

In the UK, human rights are protected by the Human Rights Act 1998.

What is the main employment law in UK? ›

By law, UK employers must pay the minimum wage, which varies depending on age and also increases each year. There are some exceptions for employees such as apprentices. Employees over the age of 23 are also legally obliged to receive the National Living Wage.

How is US employment law different from UK employment law? ›

The biggest difference between US employment law and UK employment law is that the US has something called 'at will' employment. The UK does not. This means that, in the USA, employers can terminate an employment relationship without notice, for any reason, so long as doing so is not a violation of a protected class.

What is HR compliance UK? ›

HR compliance is essentially a commitment by a business to follow the working standards set out by employment laws in a respective city, state or country. Whilst businesses must follow these laws to maintain HR compliance, managing multitudes of employees in accordance with these laws can be challenging.

Is HR regulated in UK? ›

Top UK HR Compliance Laws to Keep an Eye on in 2022. One of the many roles of a HR professional is to ensure that employees are treated fairly and legally, following HR Compliance Laws. Therefore, HR departments must stay updated with the new and updated Employment and Labour Laws introduced each year.

How is employment law enforced in the UK? ›

In the UK, most employment law is categorised as 'civil law' or 'private law', meaning that it's enforced as a result of one party (the claimant) suing another (the respondent) either for compensation or some other remedy in a civil court.

What laws do UK companies have to comply with? ›

Complying with finance regulations – such as tax, payroll, HMRC, accounting, record keeping, Companies House and anti-money laundering regulations. Employment law and workers' rights. Health and safety for workers and visitors to your offices/site. General Data Protection Regulation (GDPR)

What is the UK doing with the Human Rights Act? ›

What is the Human Rights Act? The Human Rights Act is a UK law passed in 1998. It lets you defend your rights in UK courts and compels public organisations – including the Government, police and local councils – to treat everyone equally, with fairness, dignity and respect.

What are the two sources of employment law making UK? ›

UK employment law originates in Parliament through the legislative process, and in the courts through judicial decisions.

What are the 3 basic employment rights for a worker in UK? ›

Workers are entitled to certain employment rights, including:
  • getting the National Minimum Wage.
  • protection against unlawful deductions from wages.
  • the statutory minimum level of paid holiday.
  • the statutory minimum length of rest breaks.

What laws protect employees in the UK? ›

All your workers are protected by the Employment Rights Act 1996, as amended, against suffering any harm because of any reasonable actions they take on health and safety grounds. This applies regardless of their length of service.

What is the difference between the UK and the US work culture? ›

Despite London being a fast-paced city, the work culture is not fast-paced relative to the United States. Job expectations in the UK are much more reasonable, allowing for a healthier work-life balance with fewer work hours per week and considerably more paid time off.

What are the advantages of employment law in the UK? ›

A few benefits of employment law include fair treatment, defining employers' and employees' rights, providing economic stability, preventing discrimination, and protection from harassment. Working remotely, changes in wages, and revision of laws are all examples of employment law issues.

Can a US employee work in the UK? ›

The UK has no immigration provision for individuals to work remotely in the UK for a non-UK entity. To obtain a work visa (eg, Skilled Worker, Intra-Company Transfer) an individual must be sponsored by a trading UK company for an eligible role.

What is the role of HR in legal compliance? ›

HR compliance means ensuring your company policies and actions adhere to labor laws in your country, state or municipality. It involves everything from creating and documenting policies to enforcing them to ensure ongoing alignment.

Why is HR important UK? ›

The HR department is arguably the most important in any organisation that has employees. This is because it's the department responsible for almost every aspect of an employee's life in the organisation. In any organisation, HR has wide-ranging functions that concern you, your team and any employee.

What is the purpose of the HR department UK? ›

Most people know they handle functions such as recruitment, payroll and employment policies. Some may have a negative idea of HR, with a referral to human resources conjuring up disciplinary action or layoffs. Yet the reality is that HR is a dedicated function responsible for managing the entire employee lifecycle.

Does HR have scope in UK? ›

Nearly every type of organisation needs HR staff, so there are opportunities in all sectors. If you work in-house at a large company - you'll be part of a HR team, and may specialise in one or more of these areas: employee engagement. employee relations.

Who regulates human resources UK? ›

The centre of government (predominantly the Cabinet Office) influences decision- making and activity related to human resource management through governance, controls and the publication of standards, strategies and guidance.

How does HR support employees UK? ›

HR departments typically support employees by providing them with the right training to secure roles in other companies or offering them a pathway through their current employer.

What is UK Companies Act 172? ›

172Duty to promote the success of the company

(3)The duty imposed by this section has effect subject to any enactment or rule of law requiring directors, in certain circ*mstances, to consider or act in the interests of creditors of the company.

What is the UK Companies Act summary? ›

The Companies Act 2006 is legislation that governs companies in the UK in just about every way a company is managed, run and financed. It took over from the Companies Act 1985 and was implemented in stages, the last starting in 2009, and provided public and privately run companies in the UK with common corporate laws.

What is compliance law UK? ›

Regulatory compliance refers to the specific set of guidelines with which financial institutions and other organisations are legally obligated to comply. The type of regulatory requirement that your organisation is subject to will depend on its entity type, size and industry.

What are the human rights rules in the UK? ›

What rights are protected under the Human Rights Act?
  • Your right to life.
  • Your right to respect for private and family life.
  • Your right to personal liberty.
  • Your right not to be tortured or treated in an inhuman way.
  • Your right to a fair trial.
  • View all.

How many human rights acts are there in the UK? ›

The Human Rights Act gives you legal protection of your human rights, such as your right to life, or your right to a fair trial. There are 16 rights in total, and each one is referred to as a separate article, for example, Article 2: Right to life. You are protected under the Human Rights Act if you live in the UK.

What are the fundamental rights in the UK? ›

It principally contains civil and political rights, including the right to life, the right to a fair trial and the right to respect for private and family life. Additional rights have been added over the years; they are contained in Protocols which are optional to states already party to the ECHR.

What is the legislation regarding HRM? ›

The three most important HR laws are Title VII of the Civil Rights Act, Discrimination, and Labor Laws pertaining to minimum wage and working conditions.

What is HR acceptable use policy? ›

An acceptable use policy (AUP) is a document that outlines the rules and restrictions employees must follow in regard to the company's network, software, internet connection and devices.

What are HR ethical rules? ›

Guidelines
  • Respect the uniqueness and intrinsic worth of every individual.
  • Treat people with dignity, respect and compassion to foster a trusting work environment free of harassment, intimidation, and unlawful discrimination.
  • Ensure that everyone has the opportunity to develop their skills and new competencies.

What are HR practices policies? ›

Essential HR policies
  • Employee punctuality and attendance policy. ...
  • Health and safety policy.
  • Pay and timekeeping policy.
  • Meal and break policy. ...
  • Leave and time off work policy.
  • Employment classifications policy.
  • Non-discrimination and anti-harassment policy. ...
  • At-will employment policy.
Mar 10, 2023

What are the key laws affecting human resource management? ›

Americans with Disabilities Act (ADA) Age Discrimination in Employment Act (ADEA) Equal Pay Act (EPA) Pregnancy Discrimination Act (PDA)

What are the four major areas of laws affecting human resource management? ›

Equal Employment Opportunity, Compensation and Benefits, Labor Relations and Health and Safety.

What is the HR role to ensure adherence to laws and regulations that govern the employment relationship called? ›

Human resources compliance is an area that traces back to the very origin of the human resources function—to administrative and regulatory functions. Compliance continues to be a very important area that HR manages, and there are numerous regulations and laws that govern the employment relationship.

What is the GDPR acceptable use policy? ›

The idea is that data should only be used if the subject consented to it, and only in the manner in which the subject intended it for use. For example, if the subject provided consent to receive email campaigns, but not phone calls, this partial consent has to be recorded, and data used only for email campaigns.

What are the five common acceptable use policies? ›

These include rules around accessing restricted information; changing access data, such as passwords; opening questionable email attachments; using public Wi-Fi services; and using company approved authentication procedures.

What is three acceptable use policy? ›

1.1 You may only use Three Services: (a) as set out in this agreement; and (b) for your own personal use. This means you must not resell or commercially exploit any of Three Services or our content.

What are 5 unethical practices in HR? ›

5 Most Common Unethical Behaviors Ethics Resource Center (ERC) Survey
  • Misuse of company time. Whether it is covering for someone who shows up late or altering a timesheet, misusing company time tops the list. ...
  • Abusive Behavior. ...
  • Employee Theft. ...
  • Lying to employees. ...
  • Violating Company Internet Policies.
Jul 2, 2016

What are the unethical HR practices? ›

So, the discrimination based on high salary or incentives, favouritism is very common in the organisation which is very unethical. For these practices, well-deserved employees are neglected and as a result of this the business is getting down day by day. Strict action needs to be adopted against this.

What are the ethical and legal issues for HR professionals? ›

These include issues relating to employee benefits and compensation, health and safety, leave entitlements, discrimination and harassment, confidentiality, and employee labor rights. It's crucial they have knowledge of all laws that affect human resources management.

What are the 7 HR processes? ›

Recruitment & selection, performance management, learning & development, succession planning, compensation and benefits, Human Resources Information Systems, and HR data and analytics are considered cornerstones of effective HRM.

What is the difference between HR policies and HR practices? ›

Human resource policies are formal rules and guidelines that businesses put in place to manage their employees. HR procedures, on the other hand, are step-by-step instructions that specify what actions should be taken to comply with these policies.

What are the three HR practices? ›

Embracing empathy, focusing on data, and enabling analysis to drive strategy are the three modern HR practices that today's leading organizations implement.

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