UK Employment Law Guide
Employment law topics explained for UK employers. Know your obligations, protect your business, and get your contracts right. Updated 2025.
Pay & Benefits
National Minimum Wage 2025/26
From April 2025, the National Living Wage for workers aged 21+ is £12.21 per hour. The rate for 18-20 year olds is £10.00, under 18s £7.55, and apprentices £7.55 per hour.
Statutory Sick Pay (SSP) Rules
SSP is £116.75 per week for up to 28 weeks. Employees must earn at least £123 per week and be off sick for 4 or more consecutive days including non-working days.
Leave & Holidays
Maternity Leave and Pay Rights
Eligible employees are entitled to up to 52 weeks maternity leave (26 ordinary + 26 additional). Statutory Maternity Pay is 90% of average earnings for 6 weeks, then £184.03 per week for 33 weeks.
Paternity Leave and Pay Rights
Eligible employees get up to 2 weeks paternity leave. From April 2024, leave can be taken as 2 separate one-week blocks within 52 weeks of birth, rather than consecutively within 56 days.
Shared Parental Leave (ShPL)
ShPL allows eligible parents to share up to 50 weeks of leave and 37 weeks of pay between them. The mother must curtail her maternity leave to create ShPL. Statutory ShPP is £184.03 per week.
Holiday Entitlement Calculation
Full-time workers are entitled to 5.6 weeks (28 days) paid holiday per year under the Working Time Regulations 1998. This can include bank holidays. Part-time workers receive a pro-rata entitlement.
Bank Holiday Entitlement
There is no statutory right to time off on bank holidays. Entitlement depends on the employment contract. Employers can include the 8 bank holidays within the 28-day statutory minimum leave or offer them in addition to it. Part-time workers must not be treated less favourably.
Jury Service Employment Rights
Employees have a legal obligation to attend jury service when summoned under the Juries Act 1974. Employers must allow time off and cannot dismiss an employee for attending. There is no statutory obligation to pay employees during jury service, but employees can claim loss of earnings from the court.
Reservist Employment Rights
Reservists are protected from dismissal by reason of their reserve service under the Reserve Forces (Safeguard of Employment) Act 1985. Employers must grant leave for mobilisation and reinstate the reservist in their old role or a comparable one upon return.
Termination & Redundancy
Notice Period Requirements
Statutory minimum notice is 1 week for each year of service (up to 12 weeks maximum). Employees must give at least 1 week after one month's service. Contracts can require longer notice but never less than the statutory minimum.
Unfair Dismissal Rules
Employees with 2 years continuous service can claim unfair dismissal. Employers must show a fair reason (capability, conduct, redundancy, statutory restriction, or SOSR) and follow a fair procedure. Maximum compensatory award is £115,115 or 52 weeks pay.
Constructive Dismissal
Constructive dismissal occurs when an employee resigns because the employer has committed a fundamental breach of the employment contract. The employee must show the breach was serious, they resigned because of it, and they did not delay too long before resigning.
Redundancy Process
A fair redundancy requires a genuine business reason for reducing headcount, fair selection criteria, individual consultation, consideration of alternative employment, and proper notice and redundancy pay. Collective consultation is required for 20+ redundancies.
Redundancy Pay Calculator
Statutory redundancy pay is based on age, length of service, and weekly pay (capped at £700). Half a week's pay per year of service under 22, one week's pay for ages 22-40, and 1.5 weeks for each year aged 41+. Maximum 20 years service counts.
Statutory Redundancy Pay
Employees with 2+ years continuous service are entitled to statutory redundancy pay: 0.5 week's pay per year of service under age 22, 1 week's pay for ages 22-40, and 1.5 weeks for age 41+. Weekly pay is capped at £700 with a maximum of 20 years service counting.
Settlement Agreement Rules
A settlement agreement (formerly compromise agreement) is a legally binding contract where an employee waives employment claims in return for compensation. To be valid, it must be in writing, relate to specific complaints, and the employee must receive independent legal advice from a qualified adviser.
Garden Leave Rules
Garden leave is a period during the notice period where the employee remains employed and paid but is not required to work or attend the workplace. It requires a contractual clause to be enforceable. Time spent on garden leave can reduce the effective post-termination restriction period.
Payment in Lieu of Notice (PILON)
PILON allows an employer to terminate employment immediately by paying the employee instead of requiring them to work their notice. A contractual PILON clause is taxed as earnings. Without a clause, PILON is a breach of contract but the first £30,000 may be tax-free as damages.
Employee Rights
Discrimination at Work
The Equality Act 2010 protects workers from discrimination based on 9 protected characteristics: age, disability, gender reassignment, marriage/civil partnership, pregnancy/maternity, race, religion/belief, sex, and sexual orientation.
Flexible Working Rights 2025
Since April 2024, all employees have a day 1 right to request flexible working (previously required 26 weeks service). Employees can make 2 requests per year and employers must respond within 2 months.
Right to Disconnect
The UK does not currently have a statutory right to disconnect, unlike France and Ireland. However, employers should have clear policies on out-of-hours contact as part of their duty of care and to comply with the Working Time Regulations 1998.
Whistleblowing Protection
The Employment Rights Act 1996 Part IVA protects workers who make qualifying disclosures about wrongdoing. Dismissal for whistleblowing is automatically unfair with no qualifying service period and uncapped compensation.
Trade Union Recognition
Employers with 21+ workers can be required to recognise a trade union through the statutory recognition procedure in Schedule A1 of TULRCA 1992. Recognition can also be voluntary. Once recognised, the employer must consult the union on pay, hours, and holidays.
Collective Bargaining
Collective bargaining is negotiation between a recognised trade union and employer on terms and conditions. Under statutory recognition, bargaining covers pay, hours and holidays. Collective agreements are presumed not to be legally enforceable between the parties unless in writing and expressly stated to be binding.
Works Council Requirements
Under the Information and Consultation of Employees Regulations 2004 (amended 2020), employers with 50+ employees must inform and consult employee representatives when requested by at least 2% of employees (minimum 15). Since April 2020, employers can also be required to set up arrangements proactively.
Compliance
Data Protection for Employees
Employers must comply with UK GDPR and the Data Protection Act 2018 when processing employee data. This includes providing privacy notices, having lawful bases for processing, conducting DPIAs for high-risk processing, and responding to subject access requests within one month.
Employee Monitoring Rules
Employers can monitor employees but must comply with UK GDPR, the Human Rights Act 1998 (Article 8 right to privacy), and the Regulation of Investigatory Powers Act 2000. Monitoring must be proportionate, transparent, and based on a legitimate aim.
Right to Work Checks
All UK employers must verify every employee's right to work before employment starts under the Immigration, Asylum and Nationality Act 2006. Failure to do so can result in civil penalties of up to £60,000 per illegal worker (from February 2024) and criminal prosecution.
DBS Check Requirements
DBS checks are required for roles working with children or vulnerable adults, and available for positions of trust. Three levels exist: Basic (unspent convictions), Standard (spent and unspent convictions), and Enhanced (plus relevant police intelligence). Employers must have a legal basis for the level of check requested.
Health and Safety Obligations
Under the Health and Safety at Work Act 1974, employers have a duty to ensure the health, safety and welfare of all employees so far as reasonably practicable. Employers with 5+ employees must have a written health and safety policy and conduct risk assessments.
Workplace Policies
Dress Code Policy Legal Requirements
Employers can impose dress codes but they must not discriminate on grounds of protected characteristics under the Equality Act 2010. Dress codes must apply equivalent standards to men and women and accommodate religious dress requirements where reasonable.
Social Media Policy Legal Framework
Employers can restrict employee social media use but policies must balance business interests with employees' rights to privacy (Article 8 HRA) and freedom of expression (Article 10 HRA). Clear policies should define expectations for both work and personal accounts.
Working Hours
Working Time Regulations
The Working Time Regulations 1998 limit the average working week to 48 hours over a 17-week reference period. Workers can voluntarily opt out in writing. Night workers must not exceed 8 hours per 24-hour period on average and are entitled to free health assessments.
Rest Break Requirements
Workers are entitled to a 20-minute uninterrupted break when working more than 6 hours, 11 consecutive hours rest between working days, and 24 hours uninterrupted rest per week (or 48 hours per fortnight).
Overtime Rules UK
There is no UK statutory right to overtime pay. Whether overtime is paid depends on the employment contract. However, total pay divided by total hours (including overtime) must not fall below National Minimum Wage, and average hours must not exceed 48 per week unless opted out.
Sunday Working Rules
Shop and betting workers in England and Wales have a statutory right to opt out of Sunday working by giving 3 months written notice. Employers cannot dismiss or subject them to detriment for opting out. Other workers have no specific Sunday protections beyond general WTR rights.
Restrictive Covenants
Non-Compete Enforceability UK
Non-compete clauses are enforceable in the UK only if they protect a legitimate business interest and go no further than reasonably necessary. Courts will not rewrite unreasonable clauses. Duration, geographic scope, and the employee's seniority and access to confidential information are key factors.
Restrictive Covenant Enforceability
Restrictive covenants include non-compete, non-solicitation, non-dealing, and non-poaching clauses. Each must protect a legitimate business interest and be reasonable in scope. Non-dealing clauses are more likely to be enforced than non-competes as they are less restrictive.
Disciplinary & Grievance
Gross Misconduct Examples
Gross misconduct is behaviour so serious it fundamentally breaches the employment contract, justifying summary dismissal without notice. Common examples include theft, fraud, violence, serious insubordination, and being under the influence of drugs or alcohol at work. A fair investigation and disciplinary process is still required.
Disciplinary Procedure (ACAS Code)
The ACAS Code of Practice requires employers to: establish facts through investigation, inform the employee in writing of the allegations, hold a disciplinary meeting, allow the employee to be accompanied, make a decision and communicate it in writing, and provide a right of appeal. Failure to follow the Code can increase tribunal compensation by up to 25%.
Grievance Procedure (ACAS Code)
The ACAS Code requires employers to allow employees to raise grievances formally in writing, hold a grievance meeting without unreasonable delay, allow the employee to be accompanied, investigate the grievance, communicate the decision in writing, and provide a right of appeal.
Employment Basics
Probation Period Law
Probation periods are contractual, not statutory. They do not reduce employment rights. Employees on probation have full statutory rights from day one (except unfair dismissal which requires 2 years service). Notice periods apply during probation though shorter contractual notice may be agreed.
Trial Period Rules
There are two types of trial period: statutory trial periods of 4 weeks when an employee is offered suitable alternative employment in a redundancy situation (s.138 ERA 1996), and contractual trial periods which are informal arrangements with no specific statutory framework.
Stay compliant with UK employment law
AccountsOS generates compliant employment contracts and keeps you updated on your legal obligations.
Get Started Free