Employment Act / Labor Laws In The United Kingdom

Employment laws in the United Kingdom are some legal rules and guidelines to ensure the protection of the rights of both employers and employees. It is essential to keep the relationship between the employee and the employer fair and the interests of both parties protected in a country as big as the United Kingdom (UK), with approximately 21 million full-time employees in about 4 million listed companies. 

The employment laws in the UK govern the employment contract, which binds both the employers and the employees in clear guidelines about what is expected from them. These laws also protect the employees by ensuring fair hiring practices, fair pay, and zero discrimination in the workplace. 

In the absence of such UK labor law, the employees may become victims of workplace discrimination, harassment, or unlawful dismissal from workplace roles and responsibilities.

On the other hand, employers may face the problem of employees not fulfilling their duties at work. Thus, employment laws must ensure a cordial relationship between employees and employers. 

Who is Covered by the Employment Laws?

There are three classifications of working professionals in the United Kingdom - employees, workers, or individual contractors. There are no separate rights for individual contractors. While workers do have some rights, full-time employees enjoy all the rights.

Additionally, if the employers cannot determine the employment status of the individuals working in their organization, it can get them into legal distress.

The employment laws in the UK cover the following aspects:

  • ~Discrimination based on age, race, gender, sexuality, disability, or religion.
  • ~Harassment and Bullying
  • ~Dismissal of employees
  • ~Employee grievances
  • ~Employment contract
  • ~Payment - minimum wage and equal pay
  • ~Holidays - paid and unpaid
  • ~Working hours
  • ~Workplace safety
  • ~Parental Leaves
  • ~Employ dismissal

Employment Contract

The employment contract is an agreement between the employers and employees outlining their rights, roles, responsibilities, and obligations. To protect both the employees and the employers, the contract must clearly state their relationship. 

An employment contract in the UK should include the following:

  • ~General information (the name of the employer, place of work, job title, hours of work, days of work, probation period, pension agreements, and information about the training provided to the employee)
  • ~Salary details
  • ~Entitlement of leaves
  • ~Notice period details
  • ~Disciplinary policy
  • ~Grievance procedures
  • ~Benefits, including insurance, living allowances, and incentives (bonuses or commissions)
  • ~Job description
  • ~Reporting structure
  • ~Restriction details
  • ~Details on the protection of company goodwill

Key Provisions of the Act

The labor regulations in the United Kingdom govern business operations and human resource policies and procedures. Some of the employment laws affecting UK businesses are discussed below:

Employment Rights Act 1996:

This Act covers details about the rights of the employees concerning termination, unfair dismissal, working hours, protection, leaves, etc. The rights of the employees are based on their employment status, which could be employee, worker, and self-employed. 

  • ~Rights of employees are - 
  • ~~To obtain written terms and conditions concerning their job roles and responsibilities.
  • ~~To obtain designated paid leaves annually, during sickness, or parental.
  • ~~To claim redundancy after two years of service.
  • ~~To claim unfair dismissal.
  • ~Rights of workers are - 
  • ~~To obtain written terms and conditions concerning their job roles and responsibilities.
  • ~~To get a national minimum wage, if not more.
  • ~~To get paid leaves.
  • ~~Proof of salaries.
  • ~~To be protected against discrimination.
  • ~Rights of self-employed are - 
  • ~~Workplace health and safety when working at the client’s site.
  • ~~To be protected against discrimination.

National Minimum Wage Act 1998:

It sets the minimum amount workers should receive from their employer. The minimum wage rate (2017) was as follows:

Minimum Wage Age
£3.50 Apprentice
£4.05 Under 18
£5.60 18-20
£7.05 21-24
£7.50 25 and above

Employment Relations Act 1999:

It establishes various laws related to (but not limited to) recognition and derecognition of the trade unions, unfair dismissal of workers on strikes or being part of a trade union, unfair dismissal for taking care of dependents or paternal leaves, complaints in the employment tribunals, discrimination of part-time workers, etc. 

Maternity and Paternity Leave Regulations 1999:

According to the United Kingdom employment rules, female employees who have worked in the business for more than one year have the right to 18 weeks of ordinary maternity leaves and 29 weeks of additional leaves. Ordinary leaves are paid while additional leaves are unpaid. The employees are obligated to inform their employer 15 weeks in advance and serve 28 days of the notice period. The males, however, can be eligible for two consecutive weeks of paternity leave depending upon their tenure in the business as per the UK labor law.

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

This law requires employers to treat their part-time workers fairly compared to their full-time employees in similar job roles. 

Transfer of Undertakings (Protection of Employment) Regulations 2006:

This law protects the rights and job concerns during the transfer of business ownership. For instance, in the case of the acquisition of a smaller business by a larger business, the law protects the jobs of the employees of the smaller business. 

The Equality Act 2010:

The Act governs employers to Act fairly toward all their employees and prevents discrimination during recruitment or workplace. This single Act replaced the anti-discrimination laws for simplifying the Act, creating awareness, and strengthening the protection of the employees.

Agency Workers Regulations 2010:

This Act prevents employers from treating their workers unjustly. According to the labor regulations in the United Kingdom, the agency workers have the right to similar wages, leave entitlement, and primary employment conditions as the full-time employee if they have worked for 12 weeks or more in the same job role.

Health and Safety at Work Act 1974:

The primary law governing UK employees' safety measures and health. It obligates employers to ensure the health, safety, wellbeing, and welfare of the workforce. This Act applies to everyone, whether an employee, a worker, a contractual worker, a client, or the public. The worker, additionally, has three fundamental rights:

  • ~The right to know the severity and danger involved at work. They also have the right to receive training and information about the risks at the workplace and work.
  • ~The right to identify, assess, and control workplace risks.
  • ~The right to refuse the work if it seems unsafe.

Working Time Regulations 1998:

It is about employers being vigilant about the health, safety, work timings, and holidays of their employees. This law has limited the number of hours a worker can work every week. An employee can work for a maximum of 48 hours a week or have a working day of an average of 8 hours and one consecutive hour break every 24 hours. The employees also have a right to 5.6 weeks of annual paid leaves.

Data Protection Act 2018

Governs how businesses should store and save information regarding employees or their customers. The law also states that the business should be transparent about using the employee’s data. It also gives the employees the “right to be forgotten,” a right to ask the employers to delete their information after they leave the business. 

Penalties

If the employer or the employee breaches the employment contract or any of the Labor act rules and regulations of the United Kingdom, then either of them has broken the terms of employment as laid down in the legal document. 

If the employer breaches the contract, the employee can seek legal action against the employer. However, the employee must first clear the differences with the employer directly or through a mediator like the Employer Relations Agency. Additionally, the employee can sue the employer for the damages caused through the Industrial Tribunal to the maximum cap of £25,000. 

If the employee breaches the contract prepared according to the UK employment law, the employer can sue the employee for the damages caused. The employer, however, can reach the Industrial Tribunal only in response to the claim made by the employee for breach of contract. 

Furthermore, it is essential to note that according to the labor regulations in the United Kingdom, it is a serious offense to hire illegal immigrants or workers. The employer can be imprisoned for up to five years and/or pay an unlimited fine if found guilty.

Compliance Strategies for Employers

Employers need to have human resource compliance strategies in place for meeting statutory obligations of the United Kingdom labor act rules. It is important to comply with legal and contractual compliance to establish strong employment practices. Employers in the UK generally follow the below-mentioned practice for compliance and safeguarding them from legal disputes, claims, or settlement requirements. 

  • ~Documentation of the policies and procedures helps the employers put the company values and mission in writing. Still, it also provides the employees a reference source to check if they are meeting the expectations of their employers. This also helps the employers regularly update the policies according to the changes in the UK employment law.
  • ~Ensuring consistency in the application of policies and procedures - Policies and Procedures should be applied to everyone in the organization, and everyone should adhere to them without any exceptions. Regular policy review would help ensure consistency according to the United Kingdom labor regulations.
  • ~Removal of compliance barriers - making the policies accessible, regular updates, and reinforcement will be beneficial in ensuring compliance with UK labor law.
  • ~Training for reinforcements - Regular reinforcement training will be beneficial in avoiding mistakes and ensuring that there is no compliance stigma amongst the employees. 
  • ~Being up-to-date with the changing laws and regulations - continuously reviewing the policies and procedures, updating the changes, and implementing the new policies should be a continuous process to ensure compliance.
  • ~Regular compliance audits - conducting announced and unannounced audits would ensure that the entire organization complies with the policies and procedures.

How Can Multiplier Help?

To wrap up, an organization needs to have employment contracts and vigilant compliance strategies for the betterment and protection of employers and employees. However, considering the overwhelming UK labor regulations, it is beneficial for foreign organizations to hire an employment solution firm that can take care of all the employment needs. 

Multiplier helps you comply with the UK employment laws while also taking care of all your employment needs - from sourcing to hiring, preparing employment contracts, and salary payouts.  We are your one-stop employment solutions provider so that you can focus on the business and its operations without stressing about human resource compliance issues. 

#1 Global Employment Solution
Build a global brand
Local HR experts for global teams
Market entry in minutes
90% lesser expansion costs
Increase employee satisfaction
Zero employment risks
Save with no local entities
24x7 HR & Payroll support
Automated employee contracts
One-click payrolling
Pay employees in local currency

Enjoyed reading this?
Save it for future reference

Download PDF

Frequently Asked Questions

How will Multiplier help me in the employment solutions?

The Multiplier is a one-stop employment solution provider, which helps the business to expand internationally. We can help you onboard employees globally and create an employment contract in compliance with the local labor laws and legislation. With Multiplier, you can concentrate on vital business aspects without worrying about human resources.

How important is compliance for an international business?

Ensuring compliance aids the business in preventing violation of employment laws in the international market, thus, protecting them from lawsuits. Compliance issues in the international market may hinder the growth of the company. Therefore, it is critically essential to ensure compliance for smooth international operations.

What happens if the employee files a lawsuit and takes the business to the tribunal?

Ideally, the business should respond to the lawsuit by solving the issue without a hearing. If the issue has not been resolved without the hearing, you need to respond to the tribunal within 28 days. If you lose the tribunal, you would have to compensate your employee or ex-employee in the following manner:

  • ~Giving the job back to the employee.
  • ~Compensation to the employee for causing damage to personal feelings or causing income loss.
  • ~Paying tribunal and witness fees for the employee.

Need Reliable Help In Obtaining A Work Visa?

Get Expert Help Now

World’s Preferred EOR/PEO Platform for a Global Workforce

Get Expert Help Now