Unfortunately, employment law isn’t always black and white. In fact, because of new employment laws stemming from the Employment Rights Bill, it’s an area that’s presently particularly grey.
Peninsula exists to ensure you’re not tripped up and penalised by employment law changes.
We’ve put together this guide covering the key principles of employment law, how to avoid breaching regulations, and discuss the new Employment Rights Bill.
What is employment law?
Employment law is any government legislation concerning the relationship between employer and employee. Primarily, the aim of employment laws is to ensure fairness in the workplace, protect workers’ rights, and provide frameworks and guidance for resolving disputes.
In the Great Britain, there are four main pillars that form the foundations of your employees’ rights:
1. Discrimination
Understanding what constitutes discrimination is a legal and moral duty for an employer. Therefore, it’s critical to comply with the Equality Act 2010 to prevent discrimination occurring within your business.
From recruitment to retirement, job applicants, current and former workers cannot be discriminated against based on the following “protected characteristics”:
- Age: You cannot give preference to an employee because of their age. Exceptions could be being old enough to hold a driving licence for a job that requires driving.
- Disability: Businesses mustn’t discriminate against those with disabilities. Furthermore, you must take reasonable steps to ensure the workplace is accessible, and provide any equipment needed support employees.
- Gender reassignment: If people are in the process of reassigning their gender, or if they plan to do so, they cannot be discriminated against because of this.
- Marriage & civil partnership: Whether they’re married or in a civil partnership, an employee shouldn’t be treated differently.
- Pregnancy & maternity: Employers cannot discriminate against those who are pregnant, or during the period after they’ve given birth.
- Race: It is not permitted to discriminate on the grounds of nationality, race, colour or ethnicity.
- Religion or belief: Discriminating against someone of the basis of their faith is not allowed. The same applies for those who do not have religious beliefs.
- Sex: Only if there is a specific exception can an employer treat sexes differently.
- Sexual orientation: Companies cannot discriminate on the grounds of sexual orientation.
Types of unlawful discrimination
Just as employers should be aware of the different protected characteristics, they should pay attention to the different forms of discrimination:
- Direct discrimination: When employers mistreat someone directly because of a protected characteristic.
- Indirect discrimination: Implementing a provision, which cannot be justified as a business need, that puts those with a protected characteristic at a disadvantage.
- Harassment: Unwanted conduct relating to a protected characteristic that makes an employee feel intimated, degraded or humiliated. This includes sexual harassment and applies to those who witness such conduct. Actions listed under the Protection from Harassment Act 1997 could be:
- Phone calls
- Letters
- Emails
- Visits
- Stalking
- Verbal abuse (including social media)
- Threats
- Property damage
- Bodily harm
- Victimisation: You cannot treat an employee less favourably because they’ve made a complaint about discrimination—or if they’ve supported someone else’s concerns.
- Not making reasonable adjustments: Employers have a duty to facilitate changes in the workplace for employees and job applicants to remove disadvantages resulting from their disability.
2. Pay and working time
An employer must manage employees’ pay and working time fairly. This involves following stringent laws and regulations set out in the National Minimum Wage Act 1998 and the Working Time Regulations 1998.
Pay
The National Minimum Wage Act 1998 dictates that you must pay your eligible workers the minimum hourly rate. This law is all-encompassing; there are no exemptions for SMEs, nor are there geographical discrepancies.
What is the minimum wage?
Minimum wage hourly rates vary depending on age. For example:
- First year apprentices, or those under 19, will receive £7.55 an hour.
- Those under 18 will also earn £7.55 an hour—they must be over the compulsory school age.
- Employees aged between 18 and 20 must be paid £10 an hour.
A new National Minimum Wage has been announced that’ll come into effect in April. Those aged 18 to 20 will receive £10.85 per hour, those aged 16 to 17 will earn £8 per hour.
Those on an apprentice rate will earn the same—unless they’re over the age of 19, in which case they’re eligible to the National Living Wage or National Minimum Wage rates associated with their age group.
What is the National Living Wage?
Employees over the age of 21 must be paid the National Living Wage. As of April 2025, this became £12.21. It has been announced this will increase to £12.71 per hour on the 1st of April.
Working time
Unless your employee has voluntarily signed a written opt-out agreement, adult workers must not work more than an average of 48 hours a week. Young workers (under 18) work 8 hours per day and 40 hours per week.
You mustn’t mistreat or dismiss employees that exercise their right to opt out. Also, young workers do not have the option to opt out.
Furthermore, workers shouldn’t suffer detriment or dismissal from choosing not to or choosing to opt out.
Minimum rest periods are also required:
- When working more than 6 hours, staff are entitled to a 20-minute break
- Between each working day, employees must have 11 consecutive hours of rest
- Your employees must have 24 hours of uninterrupted rest per week or 48 hours per fortnight
Additionally, workers have a statutory minimum of 5.6 weeks paid annual leave—28 days for a full-time employee. It’s up to employers if they wish to include bank holidays.
Special rules apply for night workers, who must only work an average of 8 hours in a 24-hour period. Furthermore, they’ll require a free health assessment before starting and at regular points during their employment.
3. Right to not be unfairly dismissed
Termination of an employee’s contract must be for a fair reason, and proper procedure must be adhered to.
Qualifying period
Presently, for an employee to claim unfair dismissal, they require two years’ continuous service. It’s not as arduous a process to dismiss employees who’ve been with a business less than two years—expect in automatically unfair dismissals.
However, a Labour manifesto promise sought to change that. The government wanted to grant employees a day-one right to claim unfair dismissal.
Following a “ping pong” state between the houses and a major government U-turn, it looks as though the new qualifying period will be six months.
Debates around the Employment Rights Bill have caused change and confusion within employment law. We’ll look at the updates in closer detail later in our guide.
Valid reasons for dismissal
Dismissal also requires a fair reason. There are five available to employers:
- Conduct: This covers unacceptable behaviour and a breach of company rules. A dismissal without notice is warranted for gross misconduct—but a fair procedure must be followed.
- Capability: Due to a lack of skill or prolonged illness, employees cannot fulfil their duties.
- Redundancy: Resulting from business closure or relocation, the employee’s role is no longer required.
- Statutory illegality: A staff member’s continued employment would break the law.
- Some other substantial reason (SOSR): When a legitimate business reason isn’t covered, this “catch-all” category supports dismissal.
Fair procedure (for conduct)
Irrespective of the qualifying service being satisfied and a valid reason being established; a dismissal will be deemed unfair if a fair process isn’t followed.
Employers should refer to the principles set out in the Acas Code of Practice on Disciplinary and Grievance Procedures, which includes:
- Investigation: A reasonable and impartial investigation to decide the facts.
- Written notification: Alerting the employee in writing of issues and possible outcomes.
- Meeting: Conduct a meeting so the employee has an opportunity to present their case.
- Decision & appeal: In writing, inform the employee of the decision and offer a right to appeal.
Automatically unfair dismissals
In some cases, certain circumstances will arise where dismissal is considered automatically unfair. Examples are:
- Pregnancy, maternity, or paternal leave
- Whistleblowing
- Statutory rights
- Trade union activities
- Reasons pertaining to protected characteristics
Unfair dismissal consequences
Should an employment tribunal find you to be guilty of unfair dismissal, you could be ordered to reinstate the employee. However, compensation is the more likely result.
4. Documentation
When hiring, you’ll be collecting and using people’s personal data. With that in mind, you need to comply with the GDPR regulations set out in the Data Protection Act 2018. Before using candidates’ personal information, you must get their permission.
Thorough documentation, such as a written statement of employment particulars (SMT), is a legal requirement under the Employment Rights Act 1996 that’s found within an employment contract.
Once an employee commences their new role, you must provide the new worker with the following SMTs:
- Job title
- Place of work
- Employment start date
- Hours of work
- Salary
Other details, like disciplinary procedures or flexible working policies, might be outlined in an employee handbook. Employee handbooks aren’t mandatory, but employers must provide disciplinary procedures. It is advisable to consolidate key information that’s accessible to staff.
Proper documentation means staff are treated consistently, protects sensitive information, and acts as evidence should you find yourself in an employment tribunal.
Employment law updates
Ignited by the new Employment Rights Bill, you can expect, and must prepare, for a number of employment law changes. Many proposals have been subject to rigorous debate.
As aforementioned, the House of Lords were firm with their opposition employees gaining a day-one right to claim unfair dismissal.
Despite the government retreating on this, employees are still projected to gain new day-one rights, including paternity and unpaid parental leave, as well as significant changes to statutory sick pay (SSP).
Our team of experts are regularly monitoring developments. To stay informed of all employment law updates, download our free Employment Rights Bill roadmap here.
You can also down download our free Employment Rights Bill guide, which gives expert insights on how to respond to the imminent changes.
FAQs: What are the key principles of employment law?
Do I need to provide a written employment contract?
Yes, the Employments Rights Act 1996, states you are legally required to provide your employees and workers with a written statement of employment particulars on or before their first day of work.
What questions should I avoid during job interviews to avoid discrimination claims?
Do not ask questions relating to an applicant’s protected characteristics. Questions should centre around a prospective employee’s qualifications and experience.
What is the minimum I must pay my staff?
Depending on your employee’s age, they must be paid the National Minimum Wage or National Living Wage. National Minimum Wage for apprentices, or those under 19, is £7.55.
Likewise, those under 18, if they’re over the compulsory school age, will earn the same. Staff that are 18 to 20 should be paid £10 an hour.
Employees 21 and over must be paid the National Live Wage, which, at the time of writing is £12.21. This hourly rate changes on the 1st of April every year.
How much holiday are my staff entitled to?
Full-time employees are legally entitled to 5.6 weeks paid annual leave each year. This equates to 28 days for staff working 5 days a week. This may include bank holidays but doesn’t have to.
How do the new employment laws affect my current employee contracts and policies?
It’s advisable to carry out a thorough review of existing employment contracts and internal policies. It’s especially important to scrutinise documentation concerning flexible working, family leave, sick pay, disciplinary procedures, and redundancy.
Will the employment law updates increase my business costs?
Changes such as increased National Living Wage rates, broadened Statutory Sick Pay (SSP) and higher National Insurance contributions (NICs) could result in significant hikes in costs for your business.
Final say: What are the key principles of employment law?
Fundamentally, the core principles of employment law are to protect the relationship between employer and employee.
However, it could be argued that proposals from the Employment Rights Bill favour employees and are leaving employers with several obstacles.
This has been demonstrated with disagreement between the Houses, as well as projected rising costs for companies.
Need advice on employment law? Talk to Peninsula
Employment law is confusing, and recent changes deriving from the Employment Rights Bill has cast more uncertainty for employers. Despite the challenges and murkiness surrounding certain matters, employment laws cannot be shirked.
Through not providing entitlements for your staff and breaching regulations, your company could face financial penalties and poor public perception.
Peninsula is here to support you. With 24/7 HR advice and unlimited support with your documentation, partnering with us keeps you protected.
We take the confusion out of compliance. Request a call back today or contact us on 0800 029 4386.
