Establishing a business in the UK – Employment law considerations

As a UK employer you must adhere to various employment laws.

Employment law in the UK is complex, with plenty of traps to catch the unwary.  This note aims to help you navigate some of the common questions asked by employers looking to set up a new branch of their business in England.

Recruitment

When recruiting employees in England, you must comply with all relevant law, including the Equality Act 2010. This means that you cannot discriminate against applicants on the basis of protected characteristics, such as age, race, sex, disability, or religion or belief. You must also make sure that your recruitment process is fair and transparent.

For instance, you should ensure that you advertise the position fairly, use objective non-discriminatory criteria to make decision, and make a written offer of employment, which will then form the basis of the written contract of employment.

Contracts

All employees in England are entitled to a written statement of basic employment particulars.  This must include information about their pay, hours of work, holiday entitlement, sick pay provision, training, and other important terms of their employment.  This can be a brief statement of terms and conditions, or (usually for more senior roles) may be contained in a more fulsome contract of employment or service agreement.

Staff handbooks and policies

It is a good idea to have a staff handbook, containing all the policies and procedures that apply to your employees. This will help to ensure that your employees are aware of their rights and responsibilities.

All employers have to publish disciplinary procedures and tell employees how they can complain or raise a grievance. In addition, staff handbooks will usually contain a raft of policies and procedures including equal opportunities, time off work, performance management, “family friendly” policies (such as maternity/ paternity/ adoption/ parental leave and pay, flexible working), IT, social media, whistleblowing, communications, hybrid/ remote working, and so on.

Employment rights

Employees in England have a number of employment rights.  Some rights apply from day one of employment, such as the right to be paid the National Minimum Wage, the right to paid holiday, the right to maternity/ paternity/ adoption leave, and the right to not be discriminated against. Some rights require a minimum period of employment, such as the right to ask to work flexibly, the right to statutory maternity pay, (26 weeks) and the right not to be unfairly dismissed (2 years, though in certain types of unfair dismissal claim, there is no minimum service requirement).

You must make sure that you are aware of these rights and that you are complying with them.  Having clear contracts and a good staff handbook in place will help set the tone and provide a framework to help you set out expectations for staff as well as helping you comply with the law.

Employees must be paid the national minimum wage.

Employers’ obligations to employees

As an employer, you have a number of obligations to your employees. These include the obligation to provide your employees with a safe working environment, the obligation to pay your employees on time, and the obligation to provide your employees with breaks and rest periods.  Under the unfair dismissal regime, for employees with more than 2 years’ service, employers cannot fairly dismiss unless they have a potentially fair reason to dismiss and follow a fair procedure before deciding to dismiss.

There are also obligations to deduct income tax and employees’ National Insurance Contributions under the PAYE regime, but tax and accounting matters are outside the scope of this note.  You should instruct an accountant or tax adviser to ensure that you set up and operate employment tax correctly.

National Minimum Wage

The National Minimum Wage is the minimum hourly pay that you must pay your employees (and any “workers” you engage). The National Minimum Wage is different for different age groups and changes annually, usually from April of each year.

Fines may be issued if you fail to pay the correct amount of National Minimum Wage.

Working Time

There are limits on the number of hours that you can require your employees to work. You must make sure that you are not requiring your employees to work more than 48 hours per week (unless they have consented to work more), and that you are allowing them at least the required daily and weekly rest breaks, and their entitlement to paid annual leave (holiday).

If your employees are working so many hours that their hourly rate of pay works out to be below National Minimum Wage, they would have claims against you for failure to pay National Minimum Wage, and you may also be fined.

Employment Law Solicitor

If you need more help with the subjects covered here then do reach out to our expert solicitors.  You can speak to our employment solicitors online via email employment@qlaw.co.uk or call us on 03300 020 863.

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