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Employment Law

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Employment Law

SECTION GUIDE

What is Employment Law?

Employment law is the body of rules that governs the working relationship between employers and employees in the UK. It ensures fairness, sets minimum standards, and protects both employers and employees.

It spans the entire employee lifecycle — from recruitment and contracts through to pay, working hours, health & safety, equality, and dismissal. For UK businesses, compliance is not optional: it’s a legal requirement that carries significant risks if ignored.

Key Employment Law in the UK

Employment Rights Act 1996 (ERA 1996)

The cornerstone of employment law. It covers employment contracts, the right to written particulars from day one, unfair dismissal, redundancy pay, notice periods, parental leave, and employee protections. It is the most common basis for employment tribunal claims.

Equality Act 2010

Protects workers against discrimination, harassment, and victimisation. It brings together previous anti-discrimination laws into a single Act and protects employees under nine protected characteristics:

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

Health and Safety at Work etc. Act 1974

  • Requires employers to provide a safe workplace. Employers must carry out risk assessments, provide training, supply protective equipment, and report accidents. Enforced by the HSE (Health & Safety Executive).

Working Time Regulations 1998

  • Limits working hours to an average of 48 per week (unless employees opt out). Requires daily/weekly rest breaks and at least 5.6 weeks’ paid annual leave.

 National Minimum Wage Act 1998 & National Minimum Wage Regulations 2015

  • Establishes the minimum hourly pay for workers. Rates vary by age and apprenticeship status, and are enforced by HMRC with significant penalties for underpayment.

Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA)

  • Governs collective bargaining, trade union recognition, and industrial action. Protects employees who engage in lawful union activity.

Employment Tribunals Act 1996

  • Defines the process for resolving disputes between employers and employees, including remedies and appeals.

Data Protection Act 2018 & UK GDPR

  • Sets strict rules for handling employee data. Employers must ensure transparency, security, and compliance with individual rights.

Pensions Act 2008

  • Requires automatic enrolment of eligible employees into a qualifying workplace pension scheme, with minimum contributions from employers.

Upcoming Employment Law reforms

Employment Rights Bill 2024–25

The UK Government has announced sweeping reforms through the upcoming Employment Rights Bill, expected in 2025.

Proposals include:

  • Day-one rights: Employees to gain protection against unfair dismissal, statutory sick pay, and parental leave entitlements from their first day.
  • Flexible working: Strengthened rights to request flexible working from day one.
  • Zero-hours contracts: New rights to request predictable working hours or compensation for last-minute shift cancellations.
  • Family-friendly protections: Stronger rights for carers, parents, and those on maternity/paternity leave.
  • Trade union rights: Enhanced protections for collective bargaining and union activity.
  • Stronger enforcement: A new single enforcement body to simplify and strengthen compliance monitoring.

Other forthcoming Employment Law changes

  • National Minimum & Living Wage – annual increases, with the Living Wage extended to all over-21s from April 2025.
  • Equality Act case law – ongoing tribunal and Supreme Court decisions (e.g. gender-critical belief cases) continue to shape employer obligations.
  • Environmental compliance – the Environment Act 2021 (“Simpler Recycling”) will add operational duties for employers in relation to workplace waste.

  • Why does Employment Law matter for your business?

    Ignoring employment law exposes employers to serious risk.

    Risks of non-compliance include:

    • Employment tribunal claims for unfair dismissal, discrimination, or breach of contract.
    • Fines and penalties for underpayment or unsafe workplaces.
    • Loss of reputation, damaging recruitment and retention.
    • Lower productivity and higher turnover due to poor employee trust.

    Benefits of compliance include:

    • Stronger employee engagement and trust.
    • Better retention and reduced hiring costs.
    • Improved recruitment through a fair, responsible employer brand.
    • Business resilience through reduced legal disputes.

  • Employment Law – best practices for employers

    To comply and stay ahead of legislative change, employers should:

    • Contracts: Provide legally compliant written terms from day one of employment.
    • Policies: Keep disciplinary, grievance, equality, and flexible working policies up to date.
    • Training: Ensure line managers are trained on handling dismissals, grievances, equality, and health & safety.
    • Record-keeping: Maintain accurate records of pay, working hours, and absence.
    • Monitoring change: Stay up to date with reforms such as the Employment Rights Bill.
    • Expert advice: Seek HR or legal support before making high-risk decisions like redundancies, dismissals, or contract variations.

    impact HR provides SMEs with proactive updates, template policies, and expert advice to reduce risk and keep businesses compliant.

Your Questions Answered

FAQs on Employment Law

  • When will the Employment Rights Bill come into force?Reveal

    The Bill is expected to roll out in stages from 2024–2025, with different reforms introduced gradually to give businesses time to adapt.

  • Who can help me stay legally compliant with employment law?Reveal

    Specialist HR consultancies such as impact HR provide expert advice, templates, training, and ongoing support, helping SMEs remain legally compliant while focusing on growth.

  • Do I need external support to be compliant with employment law?Reveal

    Employment law is complex and changes regularly. External HR support helps businesses avoid mistakes, reduce risk, and stay compliant.

  • What happens if my business fails to comply with employment law?Reveal

    You may face tribunal claims, fines, reputational damage, and difficulty hiring or retaining staff.

  • How does GDPR affect HR?Reveal

    Employers must handle employee data lawfully, securely, and transparently, in line with the Data Protection Act 2018 and UK GDPR.

  • Do employers have to offer a pension?Reveal

    Yes. The Pensions Act 2008 makes automatic enrolment mandatory for eligible employees.

  • What is changing under the Employment Rights Bill?Reveal

    Employees will gain day-one rights for sick pay, parental leave, and unfair dismissal protection. Flexible working and zero-hours protections will also be strengthened.

  • What is the minimum paid holiday entitlement in the UK?Reveal

    5.6 weeks (28 days for a full-time employee), which can include bank holidays.

  • How many hours can an employee work?Reveal

    The Working Time Regulations 1998 set a limit of 48 hours on average per week (unless the employee opts out).

  • What are the nine protected characteristics under the Equality Act 2010?Reveal

    Age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation.

  • Can I dismiss an employee without a process?Reveal

    No. Employers must follow a fair process and have a valid reason, otherwise they risk unfair dismissal claims.

  • What is the main employment law in the UK?Reveal

    The Employment Rights Act 1996 covers the majority of employee rights, including contracts, dismissal, redundancy, and parental leave.

Where to find out more A collection of hand-picked useful resources in relation to Employment Law from impact HR and beyond

Need support with Employment Law compliance?

Whether you’re updating HR policies, training managers, or handling complex employee issues, impact HR can help you stay compliant, confident, and in control. Request a callback to see how we can support your business.

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