Employment Law Overview United Kingdom

Introduction

This guide is intended as a brief outline of employment law in England & Wales.  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.  This guide 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”.

Key Points

• Termination of employment is process-driven so if the right procedure is followed, liability can usually be avoided.
• Discrimination and whistleblowing 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 184.03 per week (3 April 2024 – 2 April 2025).

Legal framework

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
• Retained EU 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.

The UK left the EU on 31 January 2020. UK workplace law did not change as a result of leaving the EU because, as part of the Brexit arrangements, most EU law in force in the UK on 31 December 2020 was preserved as EU retained law.  On 29 June 2023, the Retained EU Law (Revocation and Reform) Act 2023 was passed, making provision for significant changes to the status, operation and content of retained EU law (now known as assimilated law).  The Act ensures that specified pieces of retained EU law were repealed at the end of 2023, but this did not include any key employment laws.

However, from January 2024 the Act brought an end to the supremacy of EU law, abolished directly effective rights and removed EU interpretative principles from UK law.  As a result, the Act will have a significant effect on UK employment law by changing the way that EU-derived law (such as the Transfer of Undertakings Regulations (TUPE) and the Working Time Regulations) is interpreted in the UK.  In addition, the Act will undermine existing case law by creating doubt about the scope, meaning and application of key EU-derived employment rights.  This will create uncertainty for UK businesses and could lead to more claims.

Nevertheless, the UK government has powers under the Act to re-state or amend certain legislation derived from EU law, and to pass regulations to codify any principles of interpretation or case law that it considers desirable to retain in domestic law.   Some minor post Brexit changes have already been made.  But there are still many EU derived laws which will be uncertain unless the government takes steps to make further changes. One practical example is the “rolling 90 day period” for collective redundancy consultation purposes (as ruled by the European Court in UQ v Marclean in December 2020) which is directly at odds with the Trade Union and Labour Relations (Consolidation) Act 1992.

New Developments

• Recent and planned changes to employment rights and protections include:

   

  • UK General Election – the UK has a new Labour government following the General Election on 4 July 2024. The Labour government has plans to make substantial and wide-ranging changes to employment rights and protections.  For more information about the plans, please read our article.

   

  • Carer’s leave – From 6 April 2024, unpaid carers have a new right to a week of flexible unpaid leave each year to care for a dependant with a long-term care need. The leave can be taken either as individual days or half days, for up to a block of one week each year. The government and Acas have both published guidance on the statutory right to carer’s leave.

   

  • Enhanced protection from redundancy for women and new parents – From 6 April 2024, employers are required to offer suitable alternative vacancies to a wider category of workers who are at risk of redundancy. Previously only those on maternity, adoption or shared parental leave had this right, but under the new law, redundancy protection is extended as follows:
    • Pregnant employees – from the date the employee tells their employer they are pregnant until their maternity leave starts, or where pregnancy ends and they are not entitled to maternity leave, until 2 weeks after the end of pregnancy
    • Those on maternity and adoption – for 18 months from the date of the expected week of childbirth (or the child’s birth if the employer is informed) or placement for adoption/date the child enters Great Britain
    • Those on Shared Parental Leave (SPL) – for 18 months after the child’s birth or placement (or date they enter Great Britain), except if they have not taken maternity or adoption leave in which case, they will still be protected during SPL but will need to have had six weeks’ continuous leave to qualify for protection after return from SPL.

   

  • Flexible working – Changes to the statutory flexible working regime came into force on 6 April 2024. The changes include:

   

  • Day one right: there is no longer a requirement to have six months’ service before making a flexible working request. All employees will be eligible to make a request from the first day of their employment.
  • Increased number of requests: employees may make up to two flexible working requests within a 12-month period.
  • Reduced response time: employers will be required to respond to flexible working requests within 2 months, a significant reduction from the current 3-month timeframe.
  • Mandatory consultation: there is a new requirement for employers to consult with employees on their flexible working requests before rejecting them.

  ACAS has updated its Code of Practice on requests for flexible working for these changes, and published new non-statutory guidance.

   

  Tribunals must take the Code into account when deciding complaints by employees under the flexible working rules if it appears relevant. Employers are therefore advised to follow the Code carefully when dealing with requests.

   

  • Paternity leave – From 6 April 2024, new rules provide more flexibility around how and when statutory paternity leave can be taken. Eligible fathers and partners can now:
    • take the current entitlement of two weeks’ paternity leave at any time in the first year after birth or adoption, rather than in the first eight weeks, and
    • take the leave in two separate one-week blocks.

   

  Changes to the notification requirements mean that less notice is required of the dates of leave.

   

  • Holiday – post-Brexit, rolled up holiday pay is now allowed for leave years on or after 1 April 2024, and changes have been made to holiday entitlements and requirements on recording working hours.

   

  • Transfers of Undertakings (TUPE) – The requirement to elect employee representatives for the purpose of TUPE consultation has been removed for businesses with fewer than 50 employees, and businesses of any size involved in a transfer of fewer than 10 employees. In either case, employers will be able to consult directly with employees, where no existing employee representatives are in place. This change came into effect for transfers taking place on or after 1 July 2024.

   

  • Sexual harassment – New legislation is expected to come into force in October 2024 which will introduce a new duty on employers to take reasonable steps to prevent sexual harassment of their employees. It will also give Employment Tribunals the power to uplift sexual harassment compensation by up to 25%, where an employer is found to have breached the duty. The new Labour government plan to take further steps to strengthen protection harassment laws, so more changes may be coming in this area.

   

  • Dismissal and re-engagement – A new Code of Practice on dismissal and re-engagement sets out the detailed steps employers should take when seeking to make changes to an employee’s contractual terms where “dismissal and re-engagement” is proposed. “Dismissal and re-engagement” means dismissing employees, before either offering to re-engage them, or offers to engage other employees in substantively the same roles, in order to effect the changes. The new Code of Practice came into force on 18 July 2024.

   

  Accompanying the Code were regulations which would allow an uplift or reduction in compensation if the Code is not followed. These regulations will not come into effect on 18 July 2024 as expected because there was insufficient time before the election for them to be approved by Parliament. This means that for the time being, a failure to follow the Code will not lead to an uplift to the protective award, although it could lead to an uplift of compensation award in other claims such as unfair dismissal. Now that a new Labour government is in place, we may see regulations being passed to remedy this.

   

  The Code was drawn up under the previous Conservative government. The new Labour government have committed to go further and end “fire and rehire” as a lawful way to change an employee’s contractual terms. This would include reforming the law to provide effective remedies against abuse and a strengthened statutory code of practice in place of the one brought into force on 18 July 2024.

   

  • Right to request a predictable work pattern – The Workers (Predictable Terms and Conditions) Act 2023 is set to amend the Employment Rights Act 1996, to give workers and agency workers the right to request a predictable work pattern. There will be a minimum service requirement to access the right, which is expected to be 26 weeks. This new right was expected to come into force in September 2024.

   

  However, the new Labour government have plans to go further in this area, including introducing new rules to prevent the abuse of zero hours contracts and giving workers a right to a contract that reflects the hours they regularly work (as judged over a 12-week reference period). It seems possible that the planned right to request a predictable working pattern due to come into force in September 2024 could be dropped to allow for Labour’s more radical plans in this area, but this is unclear at the time of writing.

   

  • Neonatal care leave and pay – The Neonatal Care (Leave and Pay) Act 2023will provide parents of babies who require specialist neonatal care following birth with a right to statutory neonatal care leave of up to 12 weeks’ paid leave. This will be in addition to any entitlement to other types of family-related leave they may have, such as maternity or paternity leave. This right was expected to come into force in April 2025. We will have to wait and see whether the new Labour government go ahead with this.