Employment law can seem complex for employers, but having a good understanding of your legal obligations is essential. If you are an employer in the UK, you have a duty to comply with employment legislation. Failure to do so can result in legal action from employees or intervention from government agencies. More broadly, adhering to the law promotes a fair, inclusive and productive working environment.
This blog post provides an overview of key UK employment laws that all employers should know. Understanding the basics will help you stay compliant as an employer and avoid common legal pitfalls. Whether you manage one employee or an entire workforce, it pays to know the essential rights and responsibilities outlined under employment law.
For UK businesses, it’s not just a matter of legal compliance – being a responsible, ethical employer should be a priority in itself. When employees feel valued, protected and able to balance work with their personal lives, they tend to be more satisfied, motivated and productive. While the “letter of the law” sets out the minimum standards, the ideal is building a relationship of mutual trust and respect between employer and workforce. With that aim in mind, let’s examine some core areas of UK employment law.
Contracts of Employment
Almost every working relationship in the UK is governed by a written, oral, or implied contract of employment. This contract outlines the terms and conditions of employment. All employees in the UK are entitled to a written employment contract. This sets out the agreement between employer and employee and outlines the terms and conditions of the job.
At a minimum, an employment contract should contain:
- Names of the employer and employee
- Job description
- Date employment starts
- Remuneration amount
- Working hours
- Holiday entitlement
- Sick pay and procedures
- Disciplinary and dismissal procedures
- Notice periods
There are several different types of employment contracts:
- Guaranteed minimum number of hours per week (usually 35-40 hours)
- Fixed remuneration amount per week or month
- Entitled to full employment rights like holiday pay and sick pay
- Less than full-time hours per week
- Pro-rata remuneration and benefits based on hours worked compared to a full-time employee
Zero Hours Contracts
- No guaranteed minimum hours
- Paid only for hours worked
- Limited employment rights like holiday and sick pay
Employment contracts protect both the employer and the employee. They must be clear and comprehensive to avoid any disputes. Speak to us at Birch Law if you are unsure about any aspect of an employment agreement.
National Minimum Wage
One of your foremost obligations as an employer is to ensure that your staff is paid at least the National Minimum Wage. The rate varies based on the worker’s age and whether they’re an apprentice. Remember, these figures are regularly reviewed and updated, so it’s essential to stay informed.
The minimum wage applies to all employees, including part-time, casual, agency, and apprentices. Some exceptions do apply, such as volunteers and self-employed contractors.
Rules around minimum wage include:
- Deductions cannot reduce pay below the minimum wage, except legally required payroll deductions.
- Employees must be paid for all working time, including training, opening/closing premises, and waiting time.
- Salaried staff still qualify if their annual salary doesn’t meet the minimum equivalent hourly rate.
- Tips cannot be counted towards minimum wage, except for service charges or electronic payments administered by the employer.
Employers must keep records proving minimum wage compliance for at least 3 years. HMRC enforces the minimum wage and can fine employers up to 200% of owed arrears if minimum wage rules are violated.
Working Hours and Holiday Entitlement
UK law mandates that a worker should not work more than an average of 48 hours a week unless they opt out in writing. All employees are also entitled to 5.6 weeks of paid annual leave. Understanding these regulations promotes work-life balance and reduces the risk of worker burnout.
Some key points on holiday entitlement include:
- 5.6 weeks (28 days) paid holiday per year for full-time employees. This can include bank holidays.
- Part-time workers get a pro-rata amount of the full-time entitlement.
- Holiday entitlement starts accruing from the first day of work.
- Employers can set when paid leave is taken but must allow workers to take some during the year.
- Holiday pay should match regular pay, but there are some exceptions. For example, overtime or shift bonuses may not necessarily be included.
- Unused holiday pay is due when employment ends. This is calculated proportionally to the leave year.
The Equality Act 2010 serves to prevent workplace discrimination on the grounds of age, sex, race, disability, religion, sexual orientation, gender reassignment, marriage/civil partnership, or pregnancy/maternity. Non-compliance not only tarnishes your business reputation, but it can also lead to legal disputes.
As an employer, you are legally obligated to prevent discrimination and harassment against your employees based on any of these characteristics. This means you must:
- Have clear anti-discrimination and anti-harassment policies in place and communicate these to all employees.
- Ensure recruitment, hiring, promotions, training opportunities, etc, are based on merit and qualifications – not influenced by any protected characteristics.
- Make reasonable adjustments in the workplace to accommodate employees with disabilities.
- Seriously investigate any claims or complaints of discrimination or harassment.
- Take appropriate disciplinary action against employees who have discriminated against or harassed colleagues.
Employers need to understand their legal duties in this area. An employer can face legal consequences, including employment tribunals and financial penalties, if found to have enabled workplace discrimination or harassment. Actively fostering a diverse, inclusive and respectful work environment is key.
Health and Safety Obligations
The safety and wellbeing of your employees should always be a priority. Under the Health and Safety at Work Act 1974, you must ensure your workplace meets all health, safety, and welfare standards.
The Act is an extensive piece of legislation, and we recommend engaging the services of a Health and Safety specialist to make sure your policies, systems, and procedures are compliant.
Rights of Maternity and Paternity Leave
Both mothers and fathers have rights regarding time off when a child is born or adopted. Familiarise yourself with these rights to support your employees during these pivotal life moments.
Employment law is a complex beast and it’s as well to have a legal firm in your court to ensure you don’t fall foul of legislation. Understanding these basic employment law principles can go a long way in protecting your business and ensuring your employees’ rights are upheld.