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United Kingdom

Employment Law Overview United Kingdom


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 156.55 per week (3 April 2022 – 2 April 2023).

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 will be repealed at the end of 2023, but this does not include any key employment laws. However, from January 2024 the Act will bring an end to the supremacy of EU law, abolish directly effective rights and remove 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 proposed in the government’s recent “Smarter Regulation” (see below).  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

  • New employment rights for parents and carers are coming into force:
    • The Protection from Redundancy (Pregnancy and Family Leave) Act 2023 seeks to enhance redundancy protection for pregnant employees and parents who have recently returned from family-related leave. Currently, employers are required to offer suitable alternative vacancies to employees on maternity, adoption or shared parental leave who are initially selected for redundancy, in priority to other employees. The Act is in force from 24 July 2023 but requires new regulations to bring the wider protections into effect. It is expected that the regulations will extend the protected category of workers (to include pregnancy), as well as the period of protection.
    • The Carer’s Leave Act 2023 will give employees a statutory right to a week’s flexible unpaid leave each year to care for a dependant with a long-term care need. This new right is not expected to come into effect before April 2024.
    • 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 is expected to come into force in April 2025.

    The Workers (Predictable terms and Conditions) Bill will amend the Employment Rights Act 1996, to give workers and agency workers the right to request a predictable work pattern. Although there is currently no implementation date for this Bill, it is expected to come into force in early 2024.

    Proposed reforms to flexible working requests are set out in the Employment Relations (Flexible Working) Bill and the government’s response to the consultation. The proposed changes include the right to request flexible working which will become a day one right (currently employees need 26 weeks’ service); employees will be allowed to make two requests (instead of one) within a 12-month period; the time employers have to respond will reduce from three to two months and, if rejecting a request, the employer will have a duty to discuss alternatives to the request. These changes are likely to come into force in 2024.

    In its policy paper Smarter regulation to grow the economy (10 May 2023), the government has outlined the following post-Brexit changes to UK employment law:

    • Non-compete restrictions in employment and worker contracts will be limited to a maximum of three months by legislation.
    • Holiday entitlement and pay changes and working hours record keeping changes: rolled up holiday pay will be allowed, and changes will be made to holiday entitlements and requirements on recording working hours.
    • The current requirement to elect employee representatives for the purpose of TUPE consultation will be removed for businesses with fewer than 50 employees, and
      businesses of any size involved in a transfer of fewer than 10 employees.
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