Employment 2024 Comparisons

Under current English law an individual may be:

• an employee;
• a worker; or
• self-employed.

While there are statutory definitions for both “employee” and “worker”, employment status is determined through a fact-specific analysis that considers the actual nature of the employment relationship, rather than solely relying on the terms of the contract. It is not possible for an individual to contract out of their real employment status.

Employees

An “employee” is an individual who has entered, or works under, a contract of employment – meaning a contract of service or apprenticeship which may be express or implied, oral or written (Section 230(1) and (2) of the Employment Rights Act 1996 (ERA 1996)).

Case law has developed the following key components of an employment relationship:

(i) the individual is required to provide services personally, and cannot send a substitute;

(ii) the employer is obliged to provide work for the individual, which the individual is obliged to do (so-called “mutuality of obligation”); and

(iii) the employer exerts the requisite level of control over the individual.

Other factors such as notice provisions, provision of equipment or insurance may help determine the existence of a contract of service, but the presence or absence of any one of these other factors is not determinative.

“Employees” are entitled to the full range of statutory employment rights discussed in this guide.

Workers

A “worker” is an individual who has entered into a contract personally to perform any work or services for another party, as long as that other party is not the client or customer of any business or profession carried on by the individual (Section 230(3) of the ERA 1996).

The personal service requirement for a “worker” is not as stringent as it is for an “employee”. For instance, if the contract permits the individual to send a substitute, but only if they are unavailable and with the employer’s agreement, that individual would not be an employee, but could be a worker.

Another key element of worker status is the degree to which the individual is integrated into the employer’s business. If the individual is highly integrated they are likely to be a worker, whereas if they are genuinely in business on their own account, they will not be.

“Workers” are entitled to a more limited range of statutory employment rights than employees: their principal rights are the protection against discrimination, protection for making a protected disclosure (whistle-blowing) and rights in relation to working time, national minimum wage and holidays. Workers do not currently have unfair dismissal or redundancy protections.

Self-employed

An individual is “self-employed” if they provide services to another party while running a business or profession in their own right. Self-employed individuals do not benefit from the majority of employment protections and are only entitled to certain minimum rights, such as a safe working environment.

Future Reform?

In their pre-election Plan to Make Work Pay, the Labour Party expressed an intention to “move towards a single status of worker for all but the genuinely self-employed”. This may result in the current statuses of “employee” and “worker” being combined but is likely to be the subject of future consultation.

Under English law an employment contract need not be in writing (but usually is). In accordance with Section 1 of the ERA 1996, upon commencement of employment, the employer is required to provide an employee or worker with a written statement of certain particulars of employment, the majority of which must be provided in a single document. This statement must be provided on or before the date on which the employment starts. It can be provided separately, but in practice the terms required by the statement are often incorporated into the employment contract.

These particulars include:

• the names of the employer and the worker;
• date when the employment began;
• date on which the employee’s continuous employment began;
• scale or rate of remuneration, or the method of calculating remuneration;
• the intervals at which remuneration is paid;
• details of all remuneration and benefits provided;
• any terms and conditions relating to hours of work;
• the days of the week the worker is required to work, whether the working hours may be variable and how the variation will be determined;
• any terms and conditions relating to holidays, including public holidays, and holiday pay;
• any terms and conditions relating to sick leave and pay;
• any other paid leave to which the worker is entitled;
• any terms and conditions relating to pensions and pension schemes;
• the length of notice which the worker is required to give and entitled to receive to terminate their employment;
• the job title and brief description of the work for which the worker is employed;
• the place of work;
• any collective agreements which directly affect the terms and conditions of employment;
• specified particulars where the worker is required to work outside the UK for a period of more than one month;
• any disciplinary and grievance rules or procedure applicable to the worker, or a reference to a readily accessible document specifying such rules;
• any probationary period; and
• any training entitlement provided by the employer, including whether any training is mandatory and/or must be paid for by the worker.

Employment contracts can be indefinite (but would include a notice period, either express or implied) or for a fixed-term duration. Fixed-term employees enjoy additional protections, including the right not to suffer discrimination because of their fixed-term status unless differential treatment can be objectively justified. An employee who has been continuously employed under a series of fixed-term contracts for a period of four years or more is deemed to be a permanent employee, unless the continued use of fixed-term contracts is objectively justified.

In addition to the express terms of the contract, English law also implies certain terms into employment contracts. These implied terms include:

• the duty of mutual trust and confidence;
• obligations on the employee to:
1. serve the employer faithfully;
2. obey the employer’s reasonable and lawful orders; and
3. exercise reasonable skill and care in performing their duties of employment;
• obligations on the employer to:
1. take reasonable care of the health and safety of the employee; and
2. exercise its discretion rationally when making decisions about the employee.

Working Hours

Under English law, there is technically a maximum 48-hour working week under the Working Time Regulations 1998 (WTR). However, employers are able to ask workers to opt out of this limit (and often do so). There are also exceptions from the 48-hour maximum working week, including for management level workers.

Workers are also entitled to daily and weekly rest breaks, and specific restrictions apply to periods of night work.

Currently, all UK employees have the right to request flexible working. Employers must deal with such requests in a reasonable manner, but can refuse an application if they have a good business reason for doing so (which is relatively easy to establish in practice).

The government has proposed introducing a right to work flexibly (not just a right to request it), with employers required to accommodate this “as far as is reasonable”. This could significantly increase the incidences of flexible working, although it remains to be seen what the legislation would look like. Labour have also pledged to introduce a “right to disconnect”, whereby employers would not be able to contact employees outside of their normal working hours – but again, what form this will take is currently unclear.

Part-time workers have the right not to suffer discrimination because of their part-time status, unless differential treatment can be objectively justified. Remuneration and benefits may generally be applied on a pro rata basis to reflect the time actually worked.

Overtime is primarily governed by the contract of employment and may be compulsory or voluntary. Employers do not necessarily have to adopt formal arrangements for paying workers for overtime; however, they must be careful to ensure the worker’s average pay for the total hours worked does not fall below the National Living or Minimum Wage as applicable (see 1.4 Compensation). Where compulsory and/or regular, overtime should be included in the calculation of statutory holiday pay.

All English workers aged 21 or over must be paid the National Living Wage (NLW). Younger workers and apprentices are entitled to the National Minimum Wage (NMW). Records should be kept by employers to confirm that eligible workers have been paid at least the NLW or NMW. Paying less than the NLW or NMW is a criminal offence which may attract fines and/or “naming and shaming” by HMRC.

As of 1 April 2024, the hourly NLW and NMW rates were:

• NLW (21 and over): GBP11.44;
• NMW 18–20 year-old rate: GBP8.60;
• NMW 16–17 year-old rate: GBP6.40; and
• NMW apprentice rate: GBP6.40.

Other current rates and payments which are applicable from 6 April 2024 include the following:

• statutory sick pay (SSP) – weekly rate of GBP116.75;
• statutory maternity pay (SMP) – 90% of normal pay for the first 6 weeks, thereafter the lesser of GBP184.03 per week or 90% of average weekly earnings for the remaining 33 weeks;
• statutory paternity pay (SPP), shared parental pay (ShPP), and adoption pay (SAP) – prescribed weekly rate of GBP184.03; and
• statutory redundancy pay (SRP) – GBP21,000 maximum.

An employer is not permitted to make deductions from an employee’s salary without either statutory authorisation, such as deducting tax, or the employee’s consent, which is often sought through the employment contract.

In addition to salary, it is common to reward and incentivise employees through the use of bonuses and similar arrangements. These may be contractual entitlements but are more commonly expressed as being discretionary.

Holidays

UK workers have the right to 5.6 weeks’ paid holiday each year (which equates to 28 days for full-time workers). This is made up of four weeks’ leave under regulation 13 WTR and 1.6 weeks’ additional leave under regulation 13A WTR. Different rules apply to how holiday is accrued, paid and carried over under regulations 13 and 13A, and there is also a separate regime for irregular hours and part-year workers. Workers may also be granted additional holiday under the contract of employment, which would then be governed by the contract terms. As such, holiday entitlement is a relatively complex area of English employment law.

Sickness

Employees who are unable to work due to illness or injury are entitled to receive statutory sick pay (SSP), provided they meet the qualifying conditions. Employees do not currently receive SSP for the first three days of any sickness absence. The weekly rate of SSP from April 2024 is GBP116.75. The maximum entitlement is 28 weeks’ SSP during any period of incapacity for work (or any series of linked periods). An employee may also be entitled to contractual sick pay.

Maternity and Family Leave

Eligible employees are entitled to up to 52 weeks’ statutory maternity leave. They are also entitled to receive up to 39 weeks’ statutory maternity pay (SMP) if they meet certain qualifying conditions. SMP is payable at 90% of their average weekly earnings for the first six weeks, and the lesser of GBP184.03 per week (from April 2024) or 90% of their average weekly earnings for the remaining 33 weeks. Equivalent rights exist on adoption.

Employees who are eligible for statutory maternity or adoption leave may choose to end that entitlement and instead opt into a shared parental leave regime (if they meet certain qualifying conditions). This allows up to 50 weeks’ leave and 37 weeks’ pay to be shared between both parents. The parents may take the leave together at the same time or separately, and in discontinuous blocks of at least one week, returning to work in between. This is subject to the employers agreeing the proposed pattern of leave; if agreement cannot be reached, the leave is taken in one continuous block.

Employees who are fathers/partners are also entitled to two weeks’ statutory paternity leave, if they meet certain qualifying conditions. They may also be eligible for statutory paternity pay, payable at the lower of GBP184.03 per week (from April 2024) or 90% of the employee’s average weekly earnings.

Employees who take statutory maternity, adoption, shared parental or paternity leave are also entitled to receive the benefit of all their contractual terms and conditions of employment (except remuneration) during the period of leave. They also have additional protections on return to work and on redundancy. Employees may also receive enhanced rights to maternity or family leave / pay from their employer on either a contractual or discretionary basis.

Employees who are parents are also eligible to take up to 18 weeks’ unpaid parental leave for each child, up to the child’s 18th birthday.

Confidentiality and Non-disclosure Agreements (NDAs)

Employees owe implied duties of confidentiality during their employment, and are often required to sign up to an NDA as part of their employment contract which extends their confidentiality obligations post-termination of employment. There are however limitations on the scope and enforceability of NDAs against employees (see 7.4 Termination Agreements).

Employee Liability

Claims against individual employees are not as common as claims against employers, although employees can be individually liable for certain acts, eg, discrimination against co-workers.

An employer may be found vicariously liable for an employee’s tortious act if it was committed in the course of the employee’s employment or is closely connected with what the employee was authorised by the employer to do.

Under the Civil Liability (Contribution) Act 1978, an employer may be entitled to seek an indemnity from the employee should they be forced to pay damages in respect of the employee’s tort. The court will allow such a claim if it is ‘just and equitable’ to do so – but in practice, such claims are very rare.

Non-compete clauses in UK employment contracts are only enforceable if the former employer can show that the clause goes no further than is reasonably necessary to protect one of its legitimate business interests, which include its trade secrets, trade connections, and workforce stability. Non-competes need to be drafted as precisely and narrowly as possible to maximise the chance of enforcement, and should only restrain activities of a type, location and duration which would likely cause material damage to the former employer’s business. An employer is not obliged to make any payment to a former employee in exchange for being bound by such restrictions.

Non-competes are enforced by way of an application to the High Court for an injunction to restrain the ex-employee’s activities. The employment tribunals have no jurisdiction to hear restrictive covenant disputes. The court will decide on the enforceability of the covenant and whether an injunction is justified, balancing the potential impacts on the employer and the employee if the injunction is (or is not) granted.

In 2023, the previous government announced proposals to limit the duration of non-compete clauses included in employment and worker contracts to three months. It is unclear what the status of these proposals are following the July 2024 General Election.

Non-solicitation clauses are designed to prevent former employees from approaching the former employer’s customers or suppliers with a view to obtaining their business, or employees with a view to employing them. As with the non-compete clauses, any non-solicit clause will only be enforceable if it goes no further than is reasonably necessary to protect the former employer’s legitimate business interest(s). Non-solicits will also need to be carefully drafted, and usually limited in scope to only prohibit solicitation of contacts with whom the former employee had material dealings in the period leading up to termination of their employment.

Non-solicits are generally considered less restrictive than non-competes and may therefore be easier to enforce, although the former employer will need to adduce evidence that solicitation has actually occurred. An alternative approach would be to use a non-dealing clause, which would not require solicitation by the former employee. However, since non-dealing clauses are more restrictive than non-solicitation clauses, they are also harder to enforce.

Employers have obligations to their workers under the Data Protection Act 2018 (DPA) and the UK General Data Protection Regulation (GDPR). Employers should also follow guidance published by the Information Commissioner’s Office (ICO) to ensure compliance with their obligations under DPA and GDPR. Employers who do not comply with their DPA and GDPR obligations can face civil and criminal penalties.

Employers are “data controllers” for the purposes of DPA, on the basis that an employer is ultimately in charge of and responsible for the processing of its employees’ data.

Employers must have a valid legal basis for processing employee data under Article 6 of the GDPR. Some of the grounds typically relied on by employers for processing employee data are that the processing is necessary for:

(i) the performance of a contract to which the data subject is party, eg, processing an employee’s bank details for the purposes of paying them;

(ii) compliance with a legal obligation to which the controller is subject, eg, processing an employee’s personal details for tax purposes; and

(iii) the employer’s “legitimate interests”, eg, processing information about an employee’s performance.

Consent is included as a lawful basis under Article 6 of the GDPR. However, ICO guidance warns employers against using employee consent as a ground for processing employee data, given the inherent imbalance of power in an employment context.

Additional considerations apply to the processing of “special categories of personal data”, which includes:

• racial or ethnic origin;
• political opinions;
• religious or philosophical beliefs;
• trade union membership;
• genetic and biometric data;
• health; and
• sex life or sexual orientation.

In order to process special category data about its employees, an employer must first identify a lawful basis under Article 6 of the GDPR, and then an additional special category ground under Article 9 of the GDPR. The special category ground most likely to be relied on by an employer is that the processing is necessary for the performance of rights and obligations in connection with employment. In order to rely on this ground, the employer must be able to identify their legal obligation or right under employment law, and any processing must be limited to what is a reasonable and proportionate way of meeting that obligation.

Data Subject Access Requests (DSARs)

Under Article 15 of the UK GDPR, current and former employees can make a DSAR to obtain all their personal data held by their employer. The employer must respond within one month, with the possibility of a two month extension. Certain information is exempt from a DSAR, including:

• information about other people, which typically should be redacted;
• confidential references provided or received for employment purposes; and
• management information if disclosure is likely to prejudice the conduct of the business.

Employee Monitoring

Employers may wish to monitor their employees for a variety of reasons: to review their performance, to protect their health and safety, or as part of information security measures. Such monitoring may cover use of telephone systems, email content and traffic, device activity, or CCTV and video surveillance.

Employers should carry out a Data Protection Impact Assessment (DPIA) and notify employees of the scope and purposes of any proposed monitoring.

Monitoring should be restricted to the smallest numbers of people possible and to the least intrusive methods of processing. Generally, information gathered should be used only for the purpose for which the monitoring has taken place.

Employers are required to check that their workers have the right to work in the UK, and to keep records of their eligibility to work here.

Following Brexit, the free movement rights of EEA and Swiss nationals ended on 1 January 2021. EEA and Swiss nationals (as well as qualifying family members) residing in the UK before 1 January 2021 may remain and work in the UK, if they have secured their immigration status under the EU Settlement Scheme.

A new points-based immigration scheme was introduced in the UK on 1 December 2020, and has applied to EEA and Swiss nationals since 1 January 2021.

The standard UK employment visa route into the UK is the “Skilled Worker” route. This visa can be granted for an initial five year period, and requires:

• a job offer from an employer in the UK who is a Home Office approved licensed sponsor;
• the individual is skilled to at least A level or equivalent;
• the individual satisfies a minimum English language requirement; and
• the standard minimum salary for the position exceeds a prescribed threshold.

Another common immigration route for UK employers to bring in foreign workers is the Global Business Mobility (GBM) route. This allows the immigration of foreign workers from the same corporate group, who typically require at least 12 months overseas experience within the same group as the UK employer (who must also hold a sponsorship licence). Unlike the Skilled Worker route, there is no English language requirement, and the visa can be granted for an initial nine year period. There are, however, higher qualification and salary requirements.

Fast-growing UK businesses may be able to bring in workers from overseas using the “Scale-Up” route. The business must hold a sponsor licence, and the worker must have a confirmed job offer to work for an approved scale-up business for at least 6 months, to do a job that is on the list of eligible occupations, and meet the minimum English language and salary threshold for that job. Scale-up visas are granted for an initial period of two years, with the potential to extend for a further three years if the eligibility requirements are still satisfied.

The “Global Talent” immigration route is for exceptionally talented or promising individuals in certain fields (academia or research, arts and culture, or digital technology) who wish to come to the UK to work. Individuals must be able to establish that they are a leader or potential leader in their field, usually by applying for a relevant endorsement. This route does not require the employer to hold a sponsor licence.

Finally, the standard visitor visa category allows qualifying nationals of countries other than the UK to undertake a very limited range of business, and in very limited cases work, related activities in the UK for up to 6 months at a time.

There are no specific statutory regulations on mobile or remote work. However, additional considerations may apply to remote work, as regards data protection, occupational health and safety, and social security.

Data Protection

Remote workers may need specific training on their obligations regarding data protection and confidentiality. Employers should also carry out a Data Protection Impact Assessment of the implications of employees working remotely. Relevant considerations include the following.

• Who will have access to an employee’s computer and personal data? Can the employee encrypt or password-protect data?
• Should employees be required to access company systems through a VPN, use multi-factor authentication, and only use sufficiently secure wireless networks?
• Where hard-copy data is kept, does the employee have appropriate methods to store it?
• Will the employee’s home or other place of work regularly be left unattended? Is it properly secured?
• How is information moved, either between the employee’s home and workplace, or between various remote working locations?

Occupational Health and Safety

Employers owe common law and statutory health and safety duties to all employees, even those doing mobile or remote work. Those duties can be harder to fulfil where employees are working remotely, in terms of risks to both physical and mental health. Employers must therefore ensure that they have processes to risk-assess remote working locations and provide such assistance, equipment etc as is needed to protect remote workers’ health and safety.

Social Security

Where an employee is working from an overseas jurisdiction, local tax and social security contributions may be payable, which could require the employer to set up payroll within that jurisdiction. The employee may also gain an entitlement to certain mandatory benefits while working abroad, the cost of which would need to be managed by the employer. The employer should also consider whether the employee’s remote working risks creating a permanent establishment of the employer (for tax purposes) in the overseas jurisdiction.

Typically, employers in the UK grant sabbatical leave as a matter of discretion. The terms of any sabbatical leave (eg, duration, who is eligible, whether it is paid and, if so, how much) will likely be laid out in a sabbatical policy. The employer should make sure that any sabbatical policy is operated fairly and on a non-discriminatory basis. For instance, using length of service as a criterion for a sabbatical could be indirectly discriminatory on the grounds of age.

The employee remains employed during their sabbatical leave and, except as agreed between the employee and employer, remains bound by their contractual obligations (including those of fidelity and confidentiality) to their employer.

Hybrid Working

Hybrid working, where employees work from both the office and their homes (or elsewhere), increased significantly during the COVID-19 pandemic. It has broadly continued in many sectors, although some employers are beginning to encourage employees back to the office on a more full-time basis.

Hybrid working has also been assisted by innovative technological developments which facilitate (for example) remote collaboration and more efficient desk-sharing. It has also had an impact on how employers lease and design their office space, to account for a more flexible pattern of employee attendance.

Four-Day Week

An initial pilot looking into the feasibility of a UK four-day working week was run in 2022. 60 employers took part, and 54 of those maintained their new four-day working arrangements after the pilot concluded. A second pilot is due to commence in November 2024, and its findings are expected to be presented to the government in the summer of 2025. It remains to be seen what actions the government may take once this second pilot concludes.

The UK does not have as strong a culture of trade union engagement as many of its European neighbours.

Employees have the right to join an independent trade union. Those who join a union benefit from advice and support in workplace matters, including representation at disciplinary and grievance meetings.

Increasing the density of union membership in a workplace also provides a possible route to trade union recognition. Trade unions may be recognised either voluntarily by the employer, or via a statutory process. The latter requires the union to satisfy a number of conditions, including that they have at least 10% membership amongst employees and would be likely to attract the support of the majority of employees in a ballot.

Once the union is recognised, they are able to negotiate agreements with the employer on pay and other terms and conditions of employment on behalf of employees. This process is known as “collective bargaining” (see 6.3 Collective Bargaining Agreements).

Recognised unions also have the right to be informed and consulted on a number of issues, including redundancies, health and safety and business transfers. They may also instigate industrial action in the event of a dispute with the employer, although this is subject to compliance with a statutory balloting and notification procedure.

Trade unions rights were restricted under the previous Conservative government, including by the imposition of minimum service levels for certain strikes and more wide-ranging restrictions on strike action and ballots for trade union recognition. The Labour government has announced plans to repeal those restrictions and give greater rights and freedoms to trade unions and their representatives, although at the time of writing these have not yet been implemented.

In the UK, if an organisation has 50 or more employees, the employees have the right subject to certain conditions to request that their employer makes arrangements to inform and consult them about issues in the organisation. This may result in the formation of a national works council. Usually, this will be a permanent consultative body made up of management and employee representatives.

Pre-Brexit, UK employers who had at least 1,000 employees throughout the EEA and at least 150 employees in each of at least two of the relevant member states could be required to establish a European works council (EWC). The EWC has the right to receive information about the business and to be consulted about some of the business’ activities. After 31 December 2020, the UK became a third country for the purposes of EWCs and UK employees no longer count when determining if an undertaking or group falls within the scope of the EU Directive on EWCs. UK employees may continue to participate in an EWC if the agreement establishing it allows that. There was however a consultation launched in May 2024 which considered abolishing the legal framework for EWCs in the UK. At the time of writing the consultation response had not yet been published.

Some employers convene more informal “employee forums”, which may have a mandate for consultation on a number of workplace issues (and are typically governed solely by their terms of incorporation, rather than by statute).

Where (as is common in the UK) an employer does not have any form of employee representative body, and is required to inform and consult collectively with employees (for example, on a business transfer or collective redundancy process), the employer will need to arrange for employee representatives to be elected for that purpose.

Where an employer and trade union have undertaken collective bargaining and reached agreement, this is recorded in a collective agreement. The agreement may cover a number of matters such as pay, hours and holidays; other terms and conditions of employment; and disciplinary procedures.

Under English law, collective agreements are not generally legally enforceable between the trade union and the employer. However, their terms may be incorporated into the individual contracts of employment of employees who are covered by that agreement (known as the bargaining unit). The bargaining unit is not an equivalent population to the organisation’s trade union members; it would typically be defined by job type or location, and may include trade union members and non-members alike. Those employees who have the terms of the collective agreement incorporated into their employment contracts can then enforce those terms against the employer. The trade union meanwhile could challenge the employer’s non-compliance with a collective agreement by calling or threatening to call industrial action.

Under common law, an employee can dismiss an employee for any reason, provided they comply with the contractual termination requirements, including notice provisions. There are however a number of statutory protections which may apply, most importantly the right not to be unfairly dismissed. This requires the employer to demonstrate that it has a fair reason for dismissal, and has followed a fair process.

The five potentially fair reasons for dismissal are:

• conduct;
• capability;
• redundancy;
• breach of statutory duty or restriction; or
• some other substantial reason.

The fair procedure which must be followed by the employer will depend to some extent on the particular reason for the dismissal – for instance, a redundancy process would typically look quite different from a lack of capability process (which itself could cover ill health or poor performance, both of which would require a different approach). That said, there are a number of common factors in most fair dismissal processes, which include:

• conducting a reasonable investigation;
• informing the employee of the allegations against them;
• holding a hearing; and
• providing an opportunity to appeal the employer’s decision.

Employees have the right to be accompanied by a colleague or trade union representative at a disciplinary or grievance hearing. Additionally, the Advisory, Conciliation and Arbitration Service (ACAS) Code of Practice on Disciplinary and Grievance Procedures will apply to dismissals for misconduct or poor performance (but not, for example, to redundancy or expiry of a fixed-term contract). Failure to follow the Code may affect the fairness of the dismissal and the amount of compensation awarded. Compensation for unfair dismissal is made up of:

• a basic award, based on the employee’s age, wages and length of service, but capped at GBP21,000; and
• a compensatory award, capped at the lower of 12 months’ pay or GBP115,115.

(Both caps as at 6 April 2024.)

At present, employees must have been continuously employed for at least two years in order to claim unfair dismissal. However, the government has announced an intention to make unfair dismissal a “day one” right, subject to the employer’s ability to use a fair probationary period. At the time of writing, further details of this change had not been published.

Collective Redundancies

A specific collective redundancies regime applies where an employer proposes to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less. “Redundant” for these purposes means that the dismissal is for a reason not related to the individual concerned. It would therefore not only catch more traditional redundancies, where there is a workplace closure or diminished need for employees, but also other types of dismissal, most importantly in the context of restructurings to effect a change in terms or job functions (including “fire and rehire”).

Where the regime applies, the employer must consult collectively with elected employee representatives about the dismissals. Consultation must commence in good time before any redundancies are confirmed, and dismissals should not take effect until the expiry of a minimum period following the start of consultation:

• 30 days – if between 20 and 99 dismissals are proposed; or
• 45 days – where 100 or more redundancies are proposed.

Failure to comply with the obligations to collectively consult in a redundancy situation may result in compensation being payable of up to 90 days’ uncapped pay per affected employee.

In addition, employers must notify the Secretary of State of the proposed dismissals. The notification must be made in a prescribed format (Form HR1), and it must be made within the 30- or 45-day timescales set out above. Failure to comply with this obligation is a criminal offence which attracts an unlimited fine (although prosecutions are rare in practice).

All employees are entitled to receive notice of termination, with the exception of an employee committing a repudiatory breach of contract which justifies a summary dismissal (see 8.1 Wrongful Dismissal). The notice period is usually specified by the contract, although there is a statutory minimum which is implied in the event that no greater express provision is made. The statutory minimum notice required from the employer is one week’s notice for each complete year or service, up to a maximum of 12 weeks. The statutory minimum notice from the employee is one week, provided that they have been employed for at least one month.

There is no general right to severance on top of notice, other than in a redundancy scenario (where employees may have a right to statutory redundancy pay and potentially and enhanced redundancy payment from their employer). Employment contracts frequently provide employers with the right to make a payment in lieu of an employee’s notice period (PILON), or to place the employee on “garden leave” for the duration of their notice period. There would also typically be provision made in bonus and share scheme documentation about the employee’s rights on termination (although there may also be discretion for different treatment in some circumstances).

In some termination situations, the parties agree to a severance package, typically in exchange for a waiver of claims from the employee (see 7.4 Termination Agreements).

There is no statutory definition of summary dismissal in UK law. The employment contract would usually outline a number of situations in which the employer would be entitled to summarily dismiss the employee without notice, which may include:

• gross misconduct;
• conviction of a criminal offence;
• bankruptcy; and
• loss of right to work in their role/in the UK.

“Gross misconduct” is also not specifically defined, but would typically involve serious or persistent disobedience or breach of the employee’s duties, often (although not necessarily) with an element of dishonesty. There would typically be examples of gross misconduct set out in the employer’s disciplinary policy. At common law, if the misconduct is to be sufficient to justify summary termination, it must amount to a repudiatory breach of contract by the employee.

Before an employee is dismissed summarily, the employer must establish that there are in fact grounds for such a dismissal. Usually this will require an investigation and a disciplinary hearing, at which the allegations are put to the employee and they have an opportunity to make their case. The employee should also be given the right to appeal against the dismissal decision.

In the UK, an employer and employee can agree to terminate the employment contract via a simple contract. However, this would not be sufficient to override the employee’s statutory rights, for example as regards unfair dismissal or discrimination. Those statutory rights can only be waived if the appropriate statutory conditions are satisfied. One of these is that a termination agreement has been negotiated with an ACAS conciliator, which can result in a valid waiver of claims (and is known as a COT3 agreement). The other more common route in practice involves a “settlement agreement”.

A settlement agreement must be agreed in writing and satisfy a number of other conditions as to its wording. Importantly, the employee must also receive independent legal advice from a lawyer, trade union official or other certified adviser, who must be appropriately insured, in order for the settlement agreement to constitute a valid waiver of the employee’s statutory rights. The settlement should also relate to particular proceedings, meaning that a blanket waiver of all claims an employee could make is unlikely to be enforceable (and the agreement should instead set out specifically the claims which are being waived).

Employers commonly include non-disclosure agreements (NDAs) in settlement agreements. These must however be carefully drafted, as there are legal restrictions on the scope of an NDA. It cannot, for instance, prevent an employee acting as a whistle-blower, or a victim of a crime disclosing information about that crime to prescribed individuals. There are also regulatory expectations of solicitors who advise their clients on NDAs, to ensure that they do not inappropriately restrict departing employees from speaking out about wrongdoing.

Dismissal of some employees for specified reasons may be “automatically unfair”. These include where the sole or main reason for the dismissal is:

• that the employee is a whistle-blower (see below);
• a business transfer (see below);
• related to pregnancy, childbirth, flexible working or family leave;
• health and safety related;
• by reason of the employee acting as an employee representative, or trustee of an occupational pension scheme; and
• that the employee asserted a statutory right.

In some cases this means that the employee does not require the usual two years’ qualifying service in order to claim unfair dismissal, and/or that the usual cap on unfair dismissal compensation does not apply.

Whistle-blowing

Workers have the right to not be subjected to a detriment or be dismissed because they made a “protected disclosure”. This is a disclosure of information which, in the reasonable belief of the worker, is made in the public interest and tends to show that a specified type of wrongdoing has occurred. These include criminal offences, dangers to health and safety, environmental damage, or breach of any other legal obligation. The disclosure must also be made in a prescribed manner, which may include to the employer or other responsible person, a regulator, a legal adviser, or to a third party such as the media (although additional conditions must then be satisfied). Compensation in the event of a successful whistle-blowing claim is uncapped.

Business Transfers

English law provides additional protections for employees affected by a business transfer or a service provision change. The legislation (known as TUPE), automatically transfers the employment of all those assigned to the business being sold, or the function being in/outsourced, to the purchaser or new service provider. The terms and conditions of employment of those who transfer are protected, and there are restrictions on dismissals or changes to terms and conditions which are made by reason of the transfer. There are also obligations on both parties to the transfer to inform and, in appropriate circumstances, consult with elected representatives of affected employees. Failure to comply with these obligations may result in a protective award of up to 13 weeks’ uncapped pay per affected employee.

A wrongful dismissal occurs when there is a breach of contract in relation to a termination of employment. The most common grounds for a claim are as follows.

• Inadequate notice – typically where the employee is dismissed summarily on the basis of conduct alleged to be a repudiatory breach of contract, but which is subsequently found not to amount to such a breach.
• Early termination of a fixed-term contract where there is no notice or other provision entitling the employer to terminate the contract early.
• Breach of contractual procedures – although rare outside the public sector, there may be a contractual disciplinary procedure. If this is not followed, the dismissal would be wrongful.

If a claim is successful, the employee may be entitled to compensation. This is calculated using the net value of the salary and by considering any other contractual benefits to which the employee would have been entitled to. Damages in an employment tribunal are currently capped at a maximum of GBP25,000. There is no cap in a civil court. The employee may also seek a declaration and/or an injunction, although these cannot be awarded in an employment tribunal and can only be sought in civil courts. They will be granted in the unlikely event that damages are an inadequate remedy.

Under the UK Equality Act 2010, it is unlawful to discriminate against employees in relation to the following protected characteristics:

• age;
• disability;
• gender reassignment;
• marriage and civil partnership;
• pregnancy and maternity;
• race;
• religion or belief;
• sex; or
• sexual orientation.

Discrimination can take a number of different forms:

• Direct discrimination – where an employee is treated less favourably because of a protected characteristic.
• Indirect discrimination – where an employer adopts a provision, criterion or practice (PCP) which is apparently neutral, but which puts employees with a protected characteristic at a disadvantage. The employer can objectively justify indirect discrimination if it is shown to be a proportionate means of achieving a legitimate aim.
• Harassment – where an employee suffers unwanted conduct related to a protected characteristic which has the purpose or effect of violating their dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment for them.
• Victimisation – where an employee suffers detrimental treatment because they have done a protected act (such as making an allegation of discrimination).

There are also specific heads of claim for disability purposes, including discrimination arising from a disability, and failure to make reasonable adjustments for a disabled employee.

The employee bears the initial burden of proving facts which could, in the absence of any other explanation, establish that discrimination has occurred. At that stage, the burden of proof shifts to the employer to prove that discrimination has not occurred.

If a discrimination claim succeeds, the usual remedy is compensation (which is uncapped). This is primarily based on the financial loss suffered by the victim, although the tribunal can also make an award for “injury to feelings”, and less commonly, aggravated or exemplary damages. The tribunal may also make a declaration about the rights of the employee and employer, and/or a recommendation for the employer to take steps to reduce the negative impact on the employee.

Prior to 2020 there was no system for video remote hearings in the UK employment tribunals (although some preliminary hearings were conducted via telephone). This changed during the COVID-19 pandemic, when in-person hearings initially became impossible. There is now provision within the Employment Tribunals Rules of Procedure for remote hearings, and a Presidential Practice Direction on remote hearings and open justice was introduced in September 2020 to provide a formal framework for the conduct and procedure for remote hearings.

Employment tribunal hearings may take place on a wholly or partly remote basis. Whether or not to list a hearing to be heard remotely is a judicial decision. The Tribunal Rules of Procedure require the tribunal to consider whether a remote hearing would be “just and equitable”, and to ensure that those participating and members of the public can hear and see what the tribunal hears and sees.

The preferred audio-visual platform is the HMCTS Cloud Video Platform (CVP). Remote hearings require electronic bundles of documents to be prepared in accordance with the tribunal’s guidelines.

Currently, most preliminary hearings, including case management, strike-out applications, and judicial mediations are held as remote hearings by default. Some simpler final hearings may also be listed as remote, although more complex cases of discrimination or whistle-blowing would almost invariably be in person.

Another newer area of digitalisation in employment litigation is the MyHMCTS Portal. This Portal allows tribunal users to file documents, bundles and other correspondence with the employment tribunal so that cases can be processed and reviewed digitally. It is being rolled out in stages throughout 2024 across the UK on a regional basis.

The UK has an Employment Tribunal system, which sits alongside the main court system and is intended to operate as a quicker, cheaper and more informal method of litigating employment disputes. The tribunals have statutory jurisdiction to hear more than 80 types of statutory employment-related claims, such as unfair dismissal, discrimination and whistle-blowing. They can also hear contractual claims if they arise out of, or are outstanding on, the termination of employment (but compensation is capped at GBP25,000). High value breach of contract claims in an employment context are therefore more typically brought in the High Court, which also has jurisdiction for other non-statutory employment claims such as restrictive covenants disputes.

Appeals from Employment Tribunals on any question of law will be heard by the Employment Appeal Tribunal (EAT). Appeals from the EAT are then heard in the main court system, starting at the Court of Appeal.

Class actions (or “multiple claims” as they are known in this jurisdiction) are a common feature within the UK employment tribunals. The Employment Tribunal Rules of Procedure allow for multiple claims where the claims of two or more individuals give rise to common or related issues of fact or law, or if it is otherwise reasonable for their claims to be made on the same claim form. There is also the possibility of representative actions, where more than one person has the “same interest” in a claim. Although the claim would be brought by one or more of those individuals, the decision will be made in respect of all of the represented individuals.

The rules of representation in the employment tribunal are not as strict as the main court system, where parties must be represented by either a solicitor or barrister with higher rights of audience. Rule 74 of the Employment Tribunal Rules of Procedure provides that a party can be “legally represented” (eg, by a barrister or a solicitor), or can be represented by a “lay representative” such as a trade union representative or any other non-legally qualified individual. Equally, employees frequently represent themselves in employment tribunals, when they would be known as a “litigant in person”.

There are a number of well-established alternative dispute resolution (ADR) models available in the UK as a means of settling employment disputes. The most common ADR mechanisms include the following.

• Negotiation – this is flexible and informal. Discussions often proceed on a “without prejudice basis” so that, if no agreement is reached, the content of the negotiations will not be admissible in any subsequent court or tribunal proceedings. Any agreement is usually recorded in a settlement agreement (see 7.4 Termination Agreements).

• ACAS conciliation – the ACAS mandatory early conciliation procedure must be followed by claimants who present claims in the majority of employment tribunal proceedings (although the only mandatory element is the notification to ACAS; conciliation will only proceed if both parties agree to it). Conciliation involves a conciliator acting as a go-between for the parties, conveying settlement proposals and helping both sides explore the strengths and weaknesses of their respective positions. Conciliation remains available up to the day of the case being heard by the employment tribunal. A successful conciliation may result in a binding COT3 agreement (see 7.4 Termination Agreements).

• Mediation – this ADR mechanism involves a neutral third party managing or facilitating the process through which the parties negotiate a settlement. This may take the form of a private mediation or a judicial mediation in the employment tribunal. The latter brings the parties together before a trained Employment Judge who remains neutral and tries to assist the parties in resolving their disputes (which may include remedies which would be unavailable in the Employment Tribunal). The parties may engage in workplace mediation where there is an ongoing working relationship between the employee and the employer. The outcome of mediation would usually be non-binding, unless it also involves a settlement agreement (see 7.4 Termination Agreements).

Arbitration is not a very common method of ADR for UK employment disputes. An arbitration agreement entered into before the dispute (for example, via an arbitration clause in the employment contract) would not be effective to prevent to individual pursuing a claim to an employment tribunal. Nevertheless, and even where there is no such provision, parties can agree to submit disputes to arbitration after they have arisen. The outcome of arbitration is typically binding on both the parties (but again, could only be so in respect of statutory employment rights if a settlement agreement is used).

Costs do not “follow the event” in employment tribunals as they do in civil courts. This means that the parties typically bear their own costs, and tribunals will not usually order that the unsuccessful party cover the costs incurred by the successful party. Tribunals do however have the power to award costs against a party who has acted vexatiously or otherwise unreasonably in the conduct of the litigation, or where a claim or defence has no reasonable prospect of success.