What is Employment Law?

• Employment law sets out rights and responsibilities for employers, employees, and workers, covering contracts, pay, workplace safety, and dispute resolution.
• Employment law applies to most businesses, with some exceptions for family-run businesses, the armed forces, and genuinely self-employed individuals.
• Major changes to employment law are coming under the Employment Rights Bill, which will likely come into force in 2026.

Employment law is what regulates working relationships between employees and employers. It sets out rights, responsibilities, and protections to ensure fair treatment (of both parties) in the workplace.

Key areas of employment law include:

• Hiring and Contracts – Rules on employment contracts, working hours, and pay.
• Workplace Rights – Protections against discrimination, unfair dismissal, and unsafe conditions.
• Workplace Misconduct – Protections against sexual harassment, bullying, and other forms of misconduct.
• Leave and Benefits – Entitlements such as holiday pay, sick leave, and parental rights.
• Employer Responsibilities – Obligations for fair pay, employee welfare, and health and safety.
• Dispute Resolution – Processes for handling grievances, disciplinary action, and legal claims.

These laws apply to most businesses in the UK. Understanding your rights and responsibilities will help you avoid legal issues or exploitation in the workplace.

Employment law is made up of multiple acts and regulations, each covering a specific area of working relationships and conditions.

Key legal instruments include:

• Hiring and Contracts – The Employment Rights Act 1996 sets rules on written contracts, working hours, and minimum notice periods. The National Minimum Wage Act 1998 establishes minimum pay rates.
• Workplace Rights – The Equality Act 2010 protects against workplace discrimination. The Employment Rights Act 1996 also covers unfair dismissal, redundancy rights, and protection for whistleblowers.
• Workplace Misconduct– The Equality Act 2010 also protects against sexual harassment. The Worker Protection Act 2023 strengthens these protections by requiring employers to take proactive measures against harassment.
• Leave and Benefits – The Working Time Regulations 1998 establish paid holiday entitlements and rest breaks. The Employment Rights Act 1996 includes statutory maternity, paternity, and sick leave rights.
• Employer Responsibilities – The Health and Safety at Work Act 1974 requires employers to protect employees from work-related harm. The Employment Rights Act 1996 also sets obligations for fair treatment.
• Dispute Resolution – The ACAS Code of Practice on Disciplinary and Grievance Procedures provides best practices for handling workplace disputes. Employment tribunals, overseen by the Employment Tribunals Act 1996, resolve legal claims.

Employment law applies to most businesses and organisations in the UK that hire staff, regardless of size or industry. This includes:

• Private businesses – Limited companies, sole traders, and partnerships.
• Public sector employers – Government departments, local councils, and public services.
• Charities and non-profits – Organisations hiring paid staff must follow employment law, though volunteers are not covered in the same way.

Some exceptions exist. For example:

• Family-run businesses – If a worker is a direct family member and lives in the employer’s home, some employment rights (such as working hours limits) may not apply.
• Armed forces and police – Some employment rights, such as unfair dismissal protections, do not apply in the same way to the police and armed forces.
• Genuinely self-employed individuals – Anyone working for themselves (so not under an employer’s control) aren’t protected by most employment laws.

Employment law applies differently depending on a worker’s status. There are three main categories:

• Employees – Workers with a contract, set hours, and employer control over their work. They have full employment protections, including redundancy rights and unfair dismissal protection.
• Workers – Those with a more flexible arrangement, such as agency staff and gig economy workers. They have rights to minimum wage, holiday pay, and protection from discrimination but not full unfair dismissal rights.
• Self-employed individuals – Those who work for themselves and set their own terms. They have fewer protections but may be covered by health and safety laws when working on an employer’s premises. They’re also protected from discrimination when fulfilling a contract for a client

Understanding worker status is essential for compliance. Employers must ensure they classify the people working for them correctly to avoid legal risks.

Different areas of employment law are overseen by different authorities.

Key enforcement agencies include:

• HM Revenue & Customs (HMRC) – Ensures businesses comply with minimum wage laws, investigates tax and employment status issues, and takes action against underpayment.
• Health and Safety Executive (HSE) – Enforces health and safety laws, investigates workplace accidents and issues penalties for unsafe conditions or non-compliance.
• Equality and Human Rights Commission (EHRC) – Investigates and enforces laws on workplace discrimination, harassment, and equal pay.
• Advisory, Conciliation and Arbitration Service (ACAS) – Provides free guidance on employment rights and offers early conciliation services to resolve disputes before they reach a tribunal.
• Employment Tribunals – Handle disputes between employers and workers, such as unfair dismissal and unpaid wages. Employees usually need to go through ACAS before making a claim.

The UK government is implementing significant reforms to employment law through initiatives like the “Make Work Pay” plan and the Employment Rights Bill. These changes are planned to increase worker protections and modernise the labour market.

Launched in October 2024, the “Make Work Pay” plan is designed to boost wages, reduce insecure work, and grow Britain’s economy. Key proposals include:

• Banning exploitative zero-hours contracts – Ensuring workers have predictable hours and income.
• Ending ‘fire and rehire’ practices – Preventing employers from dismissing and rehiring staff on less favourable terms.
• Enhancing sick pay and parental leave – Providing statutory sick pay from day one and strengthening parental leave rights.
• Establishing a Fair Work Agency – Creating a single enforcement body to uphold workers’ rights.

Introduced to Parliament in October 2024, the Employment Rights Bill is the first phase of delivering the “Make Work Pay” plan. The bill includes:

• Protection from unfair dismissal from day one – Extending unfair dismissal rights to all employees immediately upon starting employment.
• Making flexible working the default – Allowing employees to request flexible working arrangements from the outset.
• Strengthening protections for pregnant women and new mothers – Enhancing job security and support during and after pregnancy.
• Introducing a new right to bereavement leave – Providing statutory leave for employees experiencing the loss of a close family member.

The Employment Rights Bill is currently progressing through Parliament. It’s expected that the bill will become law by 2026.

We offer a range of certified online HR compliance courses, including training on conflict resolution, difficult conversations, bullying and harassment, and more.

Each course covers a specific aspect of workplace rules and relationships, so if you’re asking, “What is employment law?” you’ll find the relevant course in our library. You can ensure awareness of your duties and best practices for employee management.

And since all training is online, it’s entirely self-paced and can be shared across teams or departments without friction. You just have to choose when and where to learn.