Learn about employment law in the UK thanks to Horizons’ up-to-date guide.
Horizons is where real, local hiring expertise meets world-class customer service. Quickly and compliantly hire employees in more than 150 countries worldwide, without the need to open a local entity.
The main legislation that makes up the labor and employment laws in the UK is the Employment Rights Act 1996 (ERA). This Act sets out the basic rights and duties of employers and employees. It covers a wide range of topics, including contract terms and conditions, dismissal procedures, and working hours. The ERA is supplemented by a number of other pieces of legislation, including the Equality Act 2010 and the Trade Union and Labor Relations (Consolidation) Act 1992.
In addition to statutory law, labor law in the UK is also governed by a large body of common law. This includes case law from both domestic courts and the European Court of Justice. As a result, employers need to be aware of a wide range of legal principles when dealing with employee issues. One final point to note is that labor law in the UK is devolved to Scotland, Wales, and Northern Ireland. As a result, there are some minor differences in the law between these jurisdictions. However, the general principles are broadly similar.
Most employees in the United Kingdom are entitled to a minimum notice period of one week, rising to one week for each year of employment after two years (to a maximum in most cases of 12 weeks). Employees may be entitled to more under the specific terms of an employment contract.
The exception to this rule is if an employee commits serious misconduct, such as theft or fraud. In such cases, an employer can dismiss an employee immediately.
The notice period for dismissals in the UK depends on the circumstances. Usually ,the one-week minimum will apply, but in some cases (e.g., summary dismissal due to misconduct), no notice is required.
Note, even where notice is required, it may be possible to give the employee ‘pay in lieu of notice’ where this is specified in the employment contract.
Employees must give at least a week’s notice of their resignation, if in the job for more than a month. The contract will specify whether notice must be in writing – otherwise, it may be given verbally.
There is no statutory severance payment, however statutory redundancy must be paid to any employees that have been employed by you for 2 years or more.
The minimum redundancy payment is:
Length of service is capped at 20 years.
The weekly pay is calculated as the average the employee earned per week over the 12 weeks before the day they were given notice of redundancy.
In the United Kingdom, the most relevant legal documents related to employment law are the Employment Rights Act 1996, the Equality Act 2010, and the Health and Safety at Work etc. Act 1974. The Employment Rights Act 1996 sets out the basic rights of employees in the UK, including the right to receive a minimum wage, the right to paid holiday leave, and the right to redundancy pay.
The Equality Act 2010 protects employees from discrimination on the basis of their sex, race, disability, or other protected characteristic. Finally, the Health and Safety at Work etc. Act 1974 requires employers to take steps to ensure that their employees are safe from risks to their health and safety while at work.
If, during the probationary period, an employer decides that an employee is not suitable for the role, they may terminate their employment with a minimum of one week’s notice.
The employee can terminate employment during their probationary period with a minimum of one week’s notice.
After the probationary period, an employer in the UK can terminate an employee’s contract by giving notice in accordance with the terms of the contract. For less than 2 years of employment the minimum notice is one week. thereafter it is one week for each year of employment up to a total of 12 weeks.
If an employer wishes to dismiss an employee without notice, they must have a valid reason for doing so, such as gross misconduct. The employer must also follow a fair procedure, which will typically involve an initial warning followed by a final warning before dismissal. If an employee is dismissed without following this procedure, they may be able to claim unfair dismissal.
Your business can easily hire employees in the UK without opening a local entity.
We handle local employment law, complex tax regulations, and international payroll in 150+ countries worldwide. All you need to do is focus on your business.
Success stories from businesses we’ve helped enter and grow in new markets.