For employers and employees alike, being familiar with key UK labour law is essential. Knowing which legislation governs occupational relationships is key to understanding your rights, obligations, and position under work laws in the UK. To help you get started, we’ve put together a guide to the most important labour and employment laws in the UK. 

Note that the UK comprises three jurisdictions. This article will be focussing on the law that governs England and Wales. 

What is labour law? 

Employment or labour law is legislation that governs the relationship between employers and their employees. It is a broad area of law that includes everything from workplace disputes, bullying and harassment, health and safety, to minimum wage and how employers can dismiss an employee. 

Key Employment Acts in the UK

In this section we’ll take a brief look at key employment acts in the UK and what they mean for employers and their workers, employees or contractors. 

Employment Rights Act 1996

The Employment Rights Act 1996 consolidates the law on employment rights. It is a broad piece of legislation that covers: 

  • Contracts of employment 
  • Pay 
  • Dismissal and grievance
  • Time off 
  • Pensions 
  • Study and training 
  • Maternity paternity and flexible working 
  • Termination of employment 

Types of employment status 

The Employment Rights Act 1996 created different types of employment status. The main types include worker, employee, self-employed/contractor, director and office holder. We’ll look briefly at Workers, Employees and Self-Employed people below. 

Employment status affects a person’s rights and legal duties, as well as their employer’s responsibilities towards them. This is why it’s so important to understand what category they fall under. 

Note that a person can have a different employment status under tax law. 

Worker 

A ‘worker’ is defined as someone when: 

  • They have a written or unwritten contract or other arrangement to do work or service personally in exchange for a reward (money or benefit in kind) 
  • They only have limited right to subcontract someone else to do the work on their behalf
  • Their employer is obliged to have work for them for the duration of the contract or arrangement 
  • They are not carrying out the work  for their own limited company in an arrangement where their employer is actually considered a ‘client’ 

A worker enjoys certain employment rights that include: 

  • National Minimum Wage and statutory minimum level of paid holiday. As well as protection against any unlawful deductions from their pay. 
  • Statutory minimum of rest breaks and a cap of 48 hour work weeks (workers can also opt out of this) 
  • Protection against discrimination and for whistleblowing 
  • Equal treatment and protection from unfair treatment as a part-time worker 
  • Statutory pay such as sick pay, maternity/paternity pay and adoption pay. 

Workers are not entitled to: 

  • The minimum notice period for dismissal or protection against unfair dismissal 
  • Request a flexible working arrangement from their employer
  • Ask for time off work in the case of an energy 
  • Statutory Redundancy pay 

Employee 

Any person who is working under the terms of an employment contract is classified as an employee. You can work out if someone is an employee if they are: 

  • Required to work consistently and regularly (unless they have taken specific leave) 
  • Required to work a minimum amount of hours and has an expectation to be paid for their time 
  • Has a manager or supervisor who is directly responsible for their work 
  • Has a limited right to subcontract for their work 
  • Is able to join a business’ workplace pension scheme 

You can see more qualifying factors on the government’s website. 

All employees count as ‘workers’ but they also enjoy extra rights and responsibilities: 

  • Entitlement to all types of statutory pay and leave 
  • Redundancy pay after 2 years of continuous service
  • Protection from unfair dismissal and entitlement to the minimum notice period 
  • Entitlement to statutory redundancy pay 
  • Right to flexible working requests
  • The right to take time off for emergencies 

Note that to enjoy some of these rights, there is a minimum period of continuous employment. This may be stipulated explicitly in employment contracts. 

Self-Employed 

Someone is self-employed if they run their own business and are directly responsible for the success of their business. Since self-employed individuals work for themselves, they are not protected or covered by employment law in most cases. 

Someone is most likely self-employed if: 

  • Responsible for how and when they work 
  • Are the owner of a company or a freelancer
  • Invoice for their pay instead of getting a wage
  • Get contracts to provide services for clients
  • Are able to send someone else to do the work for them
  • Can work for different clients and charge each person a different fee 

Self-employed people benefit from fewer rights. They are entitled to: 

  • Health and safety protection on a client’s premises
  • Protection against discrimination 
  • The full rights and responsibilities outlined by the terms of the contract they have with any of their clients 

Key provisions of the Employment Rights Act 1996 

Written contract of employment 

Under the Employment Rights Act 1996, employers must share a written employment contract from the first day of employment. The contract must outline certain factors such as the title of that person’s job, their wage, their work hours and how long the employment will last. 

Dismissal 

The Employment Act also creates protection against unfair dismissal. Employers must usually inform their employees of dismissal within the relevant notice period, must have valid grounds, and evidence that they’ve acted reasonably. 

Payslip 

A 2019 amendment to the Act makes itemised payslips payslip obligatory. Payslips must now individually itemise the hours worked and the rate of pay. 

Employment contracts in the UK

Under work laws in the UK, ‘all employees have an employment contract with their employer’ that outlines their rights, responsibilities, duties as an employee and the employment conditions. Employers should ensure that they make it clear which elements of the contract are legally binding. In addition, both employer and employee should be aware of any implied terms. 

Paid and unpaid leave in the UK

Holiday Entitlement 

Statutory leave under UK labour and employment law means that ‘almost all workers are legally entitled to 5.6 weeks (28 days) of paid holiday a year. This extends to agency workers, workers with irregular hours as well as workers who are on a zero-hours contract. Employers are entitled to count bank holidays as part of an employees statutory leave entitlement. 

Employers can also elect to give their employees more leave than the minimum entitlement. 

Workers are entitled to getting paid for leave, accumulate their holiday entitlement during parental and adoption leave, accrue their entitlement if they are off work due to sickness, and request to take their holiday at the same time as sick leave. 

Statutory Sick Pay 

An employee is eligible to receive statutory sick pay if the employer pays Class 1 National Insurance for them, they are sick for 4 or more consecutive days and if they inform you that they’re ill within the set time limit (or 7 days if the employer has not stipulated one). 

The employer will pay £99.35 per week of statutory sick pay for a maximum of 28 weeks for every day that you would have worked other than the first three. Employers can choose to pay more than the statutory minimum in a ‘sick pay’ scheme if they want. 

Statutory Maternity Leave 

Employees that are eligible are able to take up to 52 weeks of maternity leave. Maternity leave is split into two parts: the first 26 weeks are ‘Ordinary Maternity Leave’ and the last 26 weeks are ‘Additional Maternity Leave’. Mothers can take maternity leave from 11 weeks in advance of the anticipated due date. 

Statutory Maternity Pay states that new mothers can be paid for up to 39 weeks, receiving 90% of their pre-tax earnings for the first six weeks and then £156.66 or 90% of their average weekly earnings (depending on which is lower) after that. 

Paternity Leave

Eligible employees are able to take 1 or 2 weeks of paternity leave. Employees can only take paternity leave after the birth up until 56 days after it. Statutory paternity pay is £156.66 or 90% of Average Weekly Earnings (whatever is lower). 

To qualify for paternity pay, the employee needs to be employed at the time of the baby’s birth, earn (before tax) a minimum of £123 per week, give the correct amount of notice, and have been working continuously for the employer for a minimum of twenty-six weeks. 

Parental Leave

Employees get eighteen weeks’ of unpaid parental leave for each child up till their eighteenth birthday. Parents are only able to take a maximum of four weeks every year for each child. Employees must also take parental leave as ‘whole weeks’ instead of single days here and there. 

National Minimum Wage Act 1998 

The National Minimum Wage Act outlines the minimum pay that a worker can be paid per hour of work. The value of minimum wage depends on the person’s age and if they’re an apprentice. 

To qualify for national minimum wage, the person in question must be at least school leaving age. For the National Living Wage, they must be at least 23. 

Contracts for work that are paid less than the minimum wage are not legally binding. 

Current Rate for National Minimum Wage & National Living Wage: 

23 and over 

21 to 22

18 to 20 

Under 18 

Apprentice 

April 2022

£9.50

£9.18

£6.83

£4.81

£4.81

Source: https://www.gov.uk/national-minimum-wage-rates

Pensions Act 2008 

The Pensions Act 2008 stipulates that employers must automatically enrol eligible employees in a workplace pension scheme and make a minimum contribution of 3% of their employees’ qualifying earnings. 

Working Time Regulations/Directive 1998 

The Working Time Regulations state that employees cannot work more than an average of 48 hours per week (this average is usually calculated over a time period of 17 weeks). 

For those under 18, the maximum is 40 hours a week (8 hours per day). 

There is the option to opt-out of the 48 hour week if someone wants to work more or longer. In addition, there are certain exceptions such as those working in the armed forces, emergency services. 

Equality Act 2010 

The Equality Act 2010 aims to give legal protection against discrimination in the workplace. It consolidated existing legislation to strengthen and clarify the law. 

The Act outlines 9 ‘protected characteristics’: 

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

If someone discriminates against another on the basis of one of the above ‘protected characteristics’, this is unlawful discrimination. The Equality Act also extends protection for ‘discrimination by association’ wherein somebody suffers discrimination because someone in their life has a ‘protected characteristic’. 

The Act endorses and allows the use of positive action by employers looking to diversify their workforce and also introduced rules around equal pay.

In addition, it empowered employment tribunals with additional powers to instruct employers to implement their advice across their workforce rather than in relation to a specific employee. 

Health and Safety at Work Act 1974 

The Health and Safety at Work Act 1974 governs occupational health and safety. You’ll often see references to it as the HASAW or HSW. The Act outlines employers and employees’ duties for up keeping health and safety standards in their workplace. 

The HASAW stipulates that employers educate their staff around health and safety standards and ensure that these standards are proactively enforced. Employers are also responsible for providing and maintaining a safe working environment for their staff. 

Employers who have five or more employees are obliged to keep a written health and safety policy. 

UK Labour Law

Labour and employment law exists to protect and empower both employers and employees. Exploring the key provisions of employment law in the UK is vital to understanding your rights, entitlements, and legal responsibilities in a professional capacity – especially in cases of disputes. That being said, UK labour and employment law is by no means simple.That’s where we come in. Our expert lawyers use their intimate knowledge of the law to guide our clients through a diverse range of employment law matters. Get in touch today to speak with one of our dedicated employment lawyers and to access first-class legal advice. 

FAQs about Labour Law in the UK 

What are my legal rights as an employee UK? 

As we’ve seen in this article, employees enjoy various legal rights including entitlement to statutory pay, redundancy pay and protection from unfair dismissal. 

Can I be sacked without warning UK? 

Technically, yes. But only in very specific circumstances where there has been a serious incident of gross misconduct. 

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