A guide to employment law in Scotland, England & Wales

 

Pre employment checks 

An employer's first obligation is to check that all potential employees have the right to work ("RTW") in the UK.  Employers have a number of options for carrying out RTW checks:

1. Carrying out a manual check of the original documents with the individual present (in person or by video call) at the time (for British and Irish nationals only).
2. Carrying out a Digital RTW check using an approved provider. This allows individuals to upload their right to work documents to an electronic system for verification, and the employer is then provided with a digital certificate confirming the person's right to work. 
3. For anyone who holds a biometric card, or an electronic visa, it is necessary to carry out a RTW check using the Home Office website. The employee generates a share code and provides this to the employer who is then able to access an electronic copy of the person's record, and should carry out their own identity check to ensure the online record relates to the employee. 

The documents an employer should retain as evidence of the check having been carried out vary depending on the type of check but if the correct procedure is not followed, and the employee is found not to have the right to work, the employer can be fined and the directors can face criminal proceedings. As of February 2024, the penalty for a first offence is £45,000 so following the proper procedure is more important than ever.
 

Written statement of terms and conditions of employment 

An employer is under a legal obligation to provide both employees and workers who begin work on or after 6 April 2020 with written particulars of terms and conditions of employment on or before their first day of work.   Employees who were employed prior to that date must be issued with terms and conditions within two months of their start date. 

If no terms and conditions are issued it is possible for an employee (or a worker who began work on or after 6 April 2020) to make an application to an Employment Tribunal who can then determine what particulars ought to have been included. Practically speaking, the main disadvantage if there is no written contract of employment is that issues of dispute can arise if the terms of employment are not sufficiently clear. However, it is also possible for compensation to be awarded to an employee who has not been provided with terms and conditions of employment in certain circumstances.

Unfair dismissal 

All employees with two years' service have the right to raise a claim for unfair dismissal.

Please note:

• The maximum unfair dismissal award is £136,115 (a basic award of £21,000 and a compensatory award of £115,115).
• The cap on the compensatory award is the lower of £115,115 or 52 weeks' gross pay. 52 weeks' gross pay for the purposes of the statutory cap excludes pension contributions, benefits-in-kind and discretionary bonuses. Dismissals for whistle blowing or related to certain health and safety reasons remain uncapped, as do dismissals relating to unlawful discrimination.
• The median unfair dismissal award in 2022/23 was £6,201.
• The amount a Tribunal will award for unfair dismissal will depend almost entirely on the employee's salary and benefits at the date they were dismissed and how quickly an employee is able to obtain alternative comparable employment, as a Tribunal will compensate the individual for their loss rather than making any punitive award against the employer.
• In certain specific circumstances, there is no limit on the amount that a Tribunal can award. These circumstances include dismissal for health and safety reasons or dismissal following the employee making a protected disclosure (whistleblowing). In addition, there is no limit on the amount that can be awarded where the dismissal is related to unlawful discrimination (i.e. discrimination on the grounds of sex, race, disability, age, marriage and civil partnership, sexual orientation, gender reassignment, pregnancy and maternity and religion or belief).
• If an employee wishes to raise a claim for unfair dismissal then they must first attempt ACAS early conciliation within three months of their employment terminating.  If early conciliation is unsuccessful or either party does not wish to progress it then an Early Conciliation certificate will be issued.  The Claimant can then proceed to make a claim to the tribunal.  The time limit for making a claim will be extended to take account of the early conciliation process.  The requirement for early conciliation applies for the majority of claims that can be made to a Tribunal. 

It is also possible for an employee to raise a claim for constructive unfair dismissal. This occurs where the employer has materially breached the employee's contract of employment in such a way that the employee is entitled to resign and treat themselves as having been dismissed.

In order to terminate employment fairly the dismissal must be for one of the following grounds:

• Conduct.
• Capability (including competence to do the job and ill-health).
• Redundancy.
• Contravention of a statutory enactment.
• Some other substantial reason.

In order to dismiss an employee fairly a fair procedure is essential. Employers are advised to seek guidance prior to proceeding in order to minimise the risk of a claim being made or, if a claim is made, to be in a stronger position to defend it.

• With regard to capability issues, generally speaking, a series of warnings should be issued (with a process at each stage which is compliant with the ACAS code – see below - being followed) over a period of time advising the employee of the particular shortfalls in their performance and any improvements required.
• Similarly, with regard to conduct which does not amount to gross misconduct, again, a series of warnings should be issued. The process at each stage should be compliant with the ACAS code.

If the conduct is sufficiently serious then an employee could be dismissed for gross misconduct without any previous informal or formal warnings. However, in such circumstances, it is still essential that a proper procedure (compliant with the ACAS Code) is followed which will often involve suspending the employee at the outset whilst a full investigation is carried out. Once the employee has been suspended they would then be invited to a disciplinary hearing but, employers are advised to seek advice should such a situation ever arise.

Employees with less than two years' service 

Employees usually require two years’ service before they can raise an unfair dismissal claim. There are a number of exceptions to this qualifying service requirement. These exceptions include (but are not limited to) dismissals for whistleblowing, dismissals related to certain health and safety reasons or dismissals relating to unlawful discrimination. However, in most cases, provided there is no discriminatory reason underpinning the decision, it will very often be possible to dismiss an employee with less than two years' service without any significant procedure being followed. Having said that, employers should still, as far as possible, take into account the procedural recommendations in the ACAS Code of Disciplinary and Grievance Procedures (see below) in most cases.

For more information on this point see our article on dismissing employees with less than two years' service.

As a risk management tool, employers should have a diary system in place to review the employment relationship with any new employees at the end of their probationary period and perhaps also after six months, twelve months, eighteen months and twenty months. Probationary periods are a useful way to monitor a new employee’s performance and, in most cases, an employer can terminate the employment relationship, relatively easily, during or at the end of the probationary period. Another option is to extend the probationary period for a further period of time, such as three months, with a view to flagging up to the employee that all is not well. If the probationary period is to be extended there should be a contractual right to do this and the period should be extended prior to the original period expiring.

ACAS code of practice on disciplinary and grievance 

The ACAS Code of Practice on Disciplinary and Grievance Procedures provides a guide for “expected” practice which employers should follow. This code can be referred to in tribunal proceedings and the tribunal has the power to award an increase of up to 25% on any compensatory award where the employer has unreasonably failed to follow the ACAS Code. The Code can be found and downloaded from the ACAS website.

Discrimination 

As indicated above, it is unlawful to discriminate against an employee on the basis of age, sex, race, disability, marriage and civil partnership, sexual orientation, gender reassignment, pregnancy and maternity, and religion or belief. In addition, under the Equality Act 2010 it is unlawful to offer different and less favourable pay and conditions where women and men are doing the equal work (i.e. like work or work rated as equivalent or work of equal value).

It is also unlawful to discriminate against someone on the basis that they work part‑time or on the basis that they have a fixed‑term contract.
Employers should have an Equal Opportunities Policy in place. This can be of assistance in the event that an employer requires to defend a discrimination-based claim. Managers and employees should also be provided with relevant training in respect of the policy. Again, this can be of assistance in the event that a discrimination claim is raised. 

Working time regulations 

The Working Time Regulations 1998 apply to all "workers" which includes employees. The main features of the Regulations are as follows:

• The employer must take all reasonable steps to ensure that the worker does not exceed the limit of an average of 48 hours per week over a reference period of normally 17 weeks.
• Workers can opt out of the working time limit of 48 hours by signing an agreement.
• Employers must keep a record of workers who have agreed to work longer hours.
• Workers cannot be forced to sign an opt-out agreement and can cancel at any time by giving the notice as agreed between the employer and worker.
• Employers are required to keep certain records regarding the working time of their employees.
• Full time workers are entitled to 28 days’ paid annual leave per year (pro rata for part‑time workers).
• The 28-day period includes any public and bank holidays, i.e. the entitlement under the Working Time Regulations is 28 days not 28 days plus statutory holidays.
• Subject to specific rules for workers under 18, workers are entitled to a rest break of 20 minutes if they work more than six hours.
• There is a right to have 24 hours off per week and at least 11 hours of uninterrupted rest each day.

There are certain specific rules regarding night‑time workers including the right to a free health assessment. There are also more stringent rules in relation to the 48 hour working week and rest periods for night workers.

National minimum wage 

All workers are covered by the national minimum wage legislation. The minimum hourly rates as of 1 April 2024 are as follows:

• NLW (for those aged 21 and over) increased to £11.44 per hour
• NMW (for those aged 18 to 20) increased to £8.60 per hour
• NMW (for those aged under 18, but at least of school leaving age, and apprentices aged under 19 or in the first year of their apprenticeship) increased to £6.40 per hour

Note that the age threshold for the NLW has been lowered to apply to workers aged 21 and over, rather than those aged 23 and over.

Sick pay

Employers are only required to pay statutory sick pay (SSP) if the employee is absent because of sickness for a continuous period of four days or more. If the employee is absent for less than four consecutive days then they are not entitled to SSP. Employers must keep records of payments and absences in excess of four consecutive days. Employees may not claim SSP for more than 28 weeks in each period of sickness absence.

Most employees qualify for SSP. If the employee is not entitled to SSP then they may be able to claim incapacity benefit instead. However, this claim is made via the Government and not via the company, albeit the company may be asked to provide certain information in respect of the employee's claim.

It is possible for an employer to pay more than just SSP in the form of occupational or contractual sick pay. The specific sick pay terms would be set out in each employee’s contract of employment.

For useful resources relating to workplace health and wellbeing see Public Health Scotland's Healthy Working Lives website.

Pensions 

The law relating to pensions changed with the implementation of “auto-enrolment”. Basically, employers are obliged to automatically enrol their eligible jobholders into a pension scheme from their relevant staging date.

Family friendly leave

There are certain family friendly rights which employees enjoy. Very broadly, these are as follows:

1. Maternity leave

Employees are entitled to six months' ordinary maternity leave (OML) and six months' additional maternity leave (AML).

OML is a period of 26 weeks' leave available to all employees, regardless of length of service, who give birth and comply with the notification conditions. AML follows immediately after the end of OML and lasts for a further 26 weeks, giving a total entitlement of 52 weeks' statutory maternity leave.

An employee will be entitled to statutory maternity pay (SMP) where she has:

• 26 weeks' continuous employment with the employer up to and including the 15th week before the expected week of childbirth (EWC); and
• average earnings of at least the lower earnings limit for National Insurance during the eight-week period ending with the 15th week before EWC.

If the employee satisfies the criteria above she will receive payment in respect of the initial 39 week period of maternity leave. The first six weeks are paid at 90% of the employee's usual rate of pay (before tax) for the employee in question. Thereafter, for the remaining 33 weeks of the paid portion of maternity leave, only the flat rate of SMP is paid. The current SMP flat rate is £184.03. The amount of maternity pay which can be recovered from the Government by the employer depends on the employer's National Insurance contributions in the appropriate tax year. However, at least 92% of SMP will be recoverable and, in many cases, 100%

2. Shared parental leave

Shared parental leave (SPL) is completely separate from and does not affect the parental leave which is discussed at point 5 below.

A mother or primary adopter is entitled to 52 weeks of maternity/adoption leave.  SPL allows the mother or primary adopter to give notice to end their maternity leave early and share what would have been the remainder of the maternity/adoption leave with the child's father or the mother's husband or civil partner or partner; or, in the case of adoption, the secondary adopter (the "other parent"). The mother's partner for these purposes is a person (whether of a different sex or the same sex) who lives with the mother and with the child in an enduring family relationship but is not the mother's child, parent, grandchild, grandparent, sibling, aunt, uncle, niece or nephew.

For more details see - Shared parental leave

3. Adoption leave

Adoption leave operates in much the same way as maternity leave and in the event that the conditions are met, an employee adopting a child will benefit from Statutory Adoption Pay. This is paid for 39 weeks.

4. Paternity leave

Paternity leave is available to employees with 26 weeks service either, for birth and surrogacy cases, ending with the week immediately prior to the 14^th week before the child's expected week of childbirth ("EWC"); or, for adoption cases, ending with the week in which the child's adopter is notified they have been matched with a child. 

For children whose EWC begins after 6 April 2024 and adopted children whose placement is on or after 6 April 2024, an employee may chose to take a single period of leave of either one or two weeks, or two non-consecutive period of leave of a week each.  The leave must usually be taken between the date of birth of the child or the date of placement in adoption, and the 52 weeks after that date.

Paternity pay is paid at the same flat rate as statutory maternity pay.

5. Parental leave

Any employee who has completed one year's continuous employment and who "has, or expects to have responsibility, for a child" has a legally enforceable right to take unpaid parental leave while the child is under the age of eighteen, subject to an overall maximum of 18 weeks leave in respect of each child (4 weeks per year in terms of the default scheme).

6. Parental bereavement leave and pay

The Parental Bereavement (Pay and Leave) Act 2018 entitles employees who find themselves in the tragic situation of having lost a child under the age of 18 to have 2 weeks' bereavement leave and, for those with the necessary 26 weeks qualifying service, paid leave.   The leave can be taken as one two week period, two seperate periods of one week, or as one single week.  The leave can start on or after the date of the death or still birth, and must finish within 56 weeks of the death or still birth.  

7. Carer's leave

Carer's leave (without pay) is a flexible entitlement to one week's unpaid leave for employees providing or arranging care for a dependent with a long-term care need. This is a day 1 right with no need for qualifying service. The leave may be taken, subject to notice requirements, as half or full days up to and including a block of a whole week at once.  Employers can postpone, but not refuse, a request for carer's leave, but any alternative dates must be no later than 1 month after the earliest date included in the original request.  Employees are protected from detriment and dismissal because they take or seek to take carer's leave, or the employer believes they are likely to do so.

8. Other rights

All employees are entitled to request a flexible working arrangement from day 1 of their employment. Employers require to consider any such request reasonably and in accordance with the statutory procedure. ACAS have published a Code of Practice for Handling Requests to Work Flexibly in a Reasonable Manner.

In addition, employees have the right to time off (unpaid) to deal with certain domestic emergencies.

Data protection - employment aspects 

Employers require to comply with the UK General Data Protection Regulation (UKGDPR) and also the Data Protection Act 2018 including when processing the personal data of job applicants, workers, employees, consultants, volunteers and others.

The GDPR sets out seven key principles which lie at the heart of the data protection regime and must be complied with in relation to:

• Lawfulness, fairness and transparency
• Purpose limitation
• Data minimisation
• Accuracy
• Storage limitation
• Integrity and confidentiality (security)
• Accountability

Employers must identify a lawful ground for collecting and using personal data and be transparent with individuals from the outset as to how their information might be used (often by way of a "Privacy Notice"). In addition, employers should have a clear internal policy for the use and processing of personal data (often by way of a "Privacy Policy").

Additional restrictions apply to the processing of (a) "special category" data relating to an individual's race, ethnic origin, politics, religion, trade union membership, genetics, biometrics (where used for ID purposes), health, sex life or sexual orientation and (b) criminal offence information.

Individuals also have extensive rights under GDPR including:

• The right to be informed
• The right of access
• The right to rectification
• The right to erasure
• The right to restrict processing
• The right to data portability
• The right to object
• Rights in relation to automated decision making and profiling.

It is important for employers to comply with UKGDPR not least given the possibility of substantial fines which can be imposed by the ICO (up to a maximum of €20 million, or 4% of total worldwide annual turnover, whichever is higher).

Health and safety  

Under the Health and Safety at Work etc Act 1974 certain obligations are placed on employers with regard to health and safety such as the general duty on employers 'so far as is reasonably practicable' to protect the health, safety and welfare at work of all employees. In addition, employers must provide safe plant and systems of work, safe methods for the use, handling, storage and transport of articles and substances, necessary information, instruction, training and supervision, a safe and well-maintained workplace, including safe access and egress and a safe working environment with adequate welfare facilities. In addition to its own employees, an employer owes statutory duties to:

• other people's employees working on the employer's premises; and

• members of the public who are affected by the activities of the employer.

Section 7 of the Health and Safety at Work etc Act 1974 also places a duty on employees to take reasonable care of their own health and safety, and that of anyone who could be adversely affected by their 'acts or omissions at work' and to co-operate with their employer in taking steps to meet legal requirements. Therefore where reasonable care has not been taken by the employee and the employer has done everything in his power 'so far as reasonably practicable' to comply with the various obligations placed on him, the employer may not be liable for the breach.

Under the Management of Health and Safety at Work Regulations 1999 the employer should appoint one or more persons he believes are competent to assist him in carrying out his health and safety obligations. It is for the employer to decide on the person suitable for the post and therefore whether they are competent. Factors to be considered in judging competency are whether they have sufficient training and experience or knowledge and other qualities to enable them properly to assist in undertaking the necessary measures. The employer will still be ultimately responsible for health and safety – the fact that they have appointed people to assist will not absolve them from responsibility.

There are more detailed regulations setting out specific health and safety requirements for employers relating to:

• assessing risks to health and safety at work;

• devising a written health and safety policy where there are five or more employees (where there are fewer than five employees appropriate measures still require to be taken but there is no need to commit this to writing);

• providing employees with adequate first aid facilities;

• notifying employees of general matters under health and safety law.

Any breach of these obligations will result in the employer being held liable. Liability can be both civil and criminal. Responsible managers and officers of the company may be personally liable in addition to the company. Employers are obliged to maintain insurance against liability for bodily injury or disease sustained by employees arising out of or sustained in the course of their employment in the UK. The insurance must be taken out under one or more approved policies with authorised insurers.

Over and above the legislation already referred to there are a vast number of more detailed regulations that target specific work related hazards including safety of the workplace and work equipment, fire hazards and lifting or other strenuous activities to name but a few.

The Health and Safety Executive enforce compliance with the regulations, but they also produce a lot of helpful information for employers that can be accessed by visiting their website. For employers working in low-risk environments the HSE have an area of their website dedicated to making health and safety simple. That information can be accessed here.

Payroll and taxation 

It is necessary to register with HM Revenue & Customs (HMRC) for employee income tax and national insurance purposes. Before an employer registers with HMRC it is necessary to gather certain preliminary information which the employer will then need during the registration process (which in most cases can be done over the telephone or by email). The pieces of information required relate to general facts about the company (e.g. business name, address, nature of business), details about how many employees will be involved and information on where the payroll will be run from and the names, addresses and phone numbers of those looking after the payroll. With these items, employers can register with the HMRC who will then send all the information required to set up the payroll. More details can be found on HMRC’s website.

Employment law reform timeline

For a timeline of recent and future changes see Employment Law Reform Timeline.