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British employment law

British employment law applies to England & Wales and much of the relevant legislation also applies in Scotland. Northern Ireland has a separate statutory code although much of its employment law is coordinated with that of England, Wales and Scotland. The information provided is therefore not to be used as authority for the law in Scotland or Northern Ireland.

Provided they are prepared to pay sufficient compensation, employers in England & Wales can usually achieve what they wish. In any event, most businesses are conscientious about wanting to be seen as “good employers”.

Employment law in the United Kingdom is derived from three main sources:

  • Common law (custom and practice and court decisions);
  • UK employment legislation which has supplemented the common law rules; and
  • European law.

Across the UK, the majority of disputes between employers and employees are heard by employment tribunals, and not within the civil courts structure. The tribunal, established in the 1970s, has its own set of rules and regulations and is entirely separate from the civil courts. If a party wishes to appeal a tribunal judgment, they may do so to the Employment Appeals Tribunal. Subsequent appeals are made to the Court of Appeal and the Supreme Court.

Although the UK left the EU on 31 January 2020, most EU law has continued to apply during the transition period, which ends on 31 December 2020. The European Union (Withdrawal) Act 2018 provides that EU law will automatically be transformed into UK domestic law when the transition period ends. This includes decisions made by the European court before 31 December 2020, however it is unclear what influence the European court will continue to have in relation to EU-derived law after this date.


Key Points

  • Termination of employment is process-driven so if the right procedure is followed, liability can usually be avoided.
  • Discrimination and whistle-blowing laws provide a high degree of protection in the workplace; claims are frequently brought in the tribunals and compensation is based primarily on financial loss (with no cap) and there are no punitive damages.
  • Although union representation is declining, workplace representation is becoming more common but is generally not problematic for employers.
  • Women are entitled to take one year’s maternity leave, and this leave can be shared with their partner; maternity pay can also be shared but the pay that can be shared is limited to 37 weeks’ pay capped at GBP 151.20 per week.

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