What Are the Key Employment Law Obligations for Employers?
UK employment law creates obligations from your first hire. Learn the essentials every business owner needs to know to stay compliant.
Key Takeaways
- Written employment contracts must be provided from day one of employment
- Employees gain unfair dismissal rights after 2 years of continuous service
- National Minimum Wage must be paid to all workers — enforcement is strict
- Discrimination law applies from the first day with no qualifying period
Employment contracts
Every employee must receive a written statement of employment particulars on or before their first day of work. Required contents: employer and employee names, job title and description, start date, pay rate and frequency, hours of work, location, holiday entitlement (statutory minimum 28 days including bank holidays for full-time), notice periods, and pension details. Failing to provide written particulars can result in compensation awards if the employee later brings any claim.
National Minimum Wage
All workers are entitled to at least the National Minimum Wage. The National Living Wage (for workers aged 21 and over) is currently £11.44 per hour, with lower rates for younger workers and apprentices. HMRC enforces NMW rigorously — underpayment results in arrears, a penalty of 200% of the underpayment (up to £20,000 per worker), and public naming. Common mistakes: deducting uniform costs below NMW, failing to count all working time including mandatory training.
Unfair dismissal rights
Employees with 2 years' continuous service have the right not to be unfairly dismissed. Before dismissing such an employee, you must: have a fair reason (conduct, capability, redundancy, illegality, or some other substantial reason), follow a fair procedure (warning, investigation, disciplinary meeting, right of appeal), and ensure the decision is within the range of reasonable responses. Failing this can result in an employment tribunal award of up to £105,707 plus a compensatory award.
Discrimination law
UK discrimination law prohibits treating employees less favourably because of a protected characteristic: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation. Crucially, discrimination law applies from the very first day of employment with no qualifying period. Dismissing an employee in their first week for a reason connected to a protected characteristic can result in an employment tribunal claim with no cap on compensation.
Health and safety obligations
Every employer must ensure, so far as reasonably practicable, the health, safety, and welfare of all employees. Employers with 5 or more employees must have a written health and safety policy. Risk assessments must be conducted for workplace activities including home working. The Health and Safety Executive (HSE) enforces these obligations and can issue improvement notices, prohibition notices, and prosecute in serious cases.