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Why Is Employment Law Important?

Employment lawEmployment law regulates the relationship between employers and employees. It governs what employers can expect from employees, what employers can ask employees to do and employees’ rights at work. Legislation is a set of laws put in place by the government to protect businesses, employees and consumers. Businesses must operate within these laws to ensure the fair and safe treatment of any party involved with a business. If businesses do not comply with legislation, legal action such as fines, restrictions and imprisonment can be actioned. Therefore, employment law plays a crucial role in ensuring that businesses function efficiently. There are various aspects within the remit of employment law that have made it a leading practice area for law firms and for companies to have specialised teams within their legal and HR departments. It is important to understand how rights have evolved given the purpose they serve for the organisation and the individual.

Key areas of employment law

Let’s take a look at some of the key factors:

Status of workers

An individual can be an employee, a worker or a self-employed person. The distinction is important, as it determines an individual's statutory employment rights, and how taxes can be applied. Assessing an individual's status is not just determined by how the parties label the relationship. It is a question of law and fact.

Work permits

Employers are responsible for the individuals they hire and they need to conduct appropriate right to work checks before hiring them. Failure to do this could result in penalties. It is important that employers obtain the right approvals to employ any   foreign nationals.

National Minimum Wage

All UK workers who are over school leaving age (currently 16 years old) must be paid the National Minimum Wage (NMW), while those above 25 years old must be paid the National Living Wage. The NMW hourly rate depends on the worker's age. These rates are updated annually. If an employer fails to offer the prescribed NMW it can lead to severe penalties.

Maternity, paternity & adoption

A new parent or a person expecting a baby is entitled to extra rights at work. These entitlements include: maternity rights, paternity leave and pay, shared parental leave, unpaid time off to look after the child and to attend antenatal appointments. There are also eligibility rules for leave and pay for parents who take time off to adopt a child or have a child through a surrogacy arrangement.

Health & safety at work

The Health and Safety at Work etc. Act 1974 sets out the framework for managing workplace health and safety in the UK. The health, safety and welfare regulations apply to all aspects of the working environment and require employers to provide a workplace that is not only safe but also suitable for the duties that are being carried out within it.


Equality within a workplace ensures that everyone has equal opportunities and is not denied the rightful promotion or training considering their qualification or experience. Employers cannot discriminate against employees on account of age, gender, nationality, pregnancy and maternity leave, sexual orientation, disabilities, race, ethnic background, religion or beliefs.

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Recent issues in employment law

When it comes to employment law there are some issues that have taken more prominence than others in the last few years. These include data protection (GDPR), Brexit and more recently the Coronavirus Pandemic situation that has necessitated swift decision-making on the part of governments which has in turn led to legislative changes in the way businesses are managed and thereby how employees’ issues are addressed.


UK employers should monitor and follow advice and guidance from relevant authorities such as the World Health Organization, Public Health England the NHS, the government and ACAS. Employers are required to assess the risks faced by their employees and visitors and implement measures to mitigate those risks, paying particular attention to vulnerable staff.


Although this article does not purport to provide an analysis of Brexit implications on UK employment law it is understood that the vast majority of EU laws and case law will become ‘retained law’ in the UK and employment law in the UK might start to change gradually, which makes it pertinent for employers, employees, lawyers and recruitment consultants to stay up to date with any new developments.

Data protection

Data protection laws protect individuals from the misuse of information about them. Updated laws give individuals more control over their personal data as the digital age develops and evolves. Employers should develop policies that take a compliant, but balanced approach. They should also ensure that employees understand their own rights and obligations under data protection law. Here is a useful factsheet to understand data protection at workplace.


Recent case law in Employment Law

Reviewing case law can help understand how the courts and tribunals have interpreted employment law and regulations and how individuals have sought remedies under the various employment legislations. Below are recent cases from 2020 compiled by Personnel Today

Employment law citations


Is Employment Law the same as Labour Law?

The terms ‘labour’ and ‘employment’ laws are often used interchangeably. Labour laws are much narrower in comparison to employment laws as it concerns the relationship between unions and collective bargaining agreements.  Employment law on the other hand deals with individual employment contracts in which the employee is not either a member of a union or bound by a collective bargaining agreement. Issues within the contract of an employee are tackled within employment laws. Discrimination, wages, working hours, harassment, privacy rights and whistleblowing are all dealt with within employment rights. These laws are not bound by any collective agreements. Labour law’s main concerns are to ensure that every working person has a minimum charter of rights in their workplace, and voice at work to get fair standards beyond the minimum. While labour law regulations existed since people started to undertake paid work, employment law became more prominent in the 20th century. The 20th century saw a shift from employer-based work to employee-based work. Employers gradually took on more responsibilities and duties regarding the safety, well-being, benefits and employee obligations towards the Government.

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Sources of UK Employment Law

There are three main sources of UK employment law that constitute the UK’s employment legislation:

Common Law

Statute Law

European Union Law – in the form of both directives and decisions of the European Court of Justice.

Since employees in the UK work under a contract of employment common law, this forms the legal basis of the employer-employee relationship. A contract of employment is usually recorded in writing but can also be oral. However, certain mandatory statutory employment protection rights will apply regardless of the law of the contract. In addition, the law of tort will govern matters such as an employer’s liability for the acts of its employees and liability for industrial accidents. Since the early 1970s there has been a dramatic growth in the amount of UK employment protection legislation, which has supplemented the common law rules. Here are some of the key legislations (in chronological order):

  • Equal Pay Act 1970
  • Health & Safety at Work etc Act 1974
  • Sex Discrimination Act 1975
  • Race Relations Act 1976
  • Trade Union and Labour Relations (Consolidation) Act 1992
  • Disability Discrimination Act 1995
  • Employment Tribunals Act 1996
  • Employment Rights Act 1996
  • Public Interest Disclosure Act 1998
  • Data Protection Act 1998
  • National Minimum Wage Act 1998
  • Human Rights Act 1998
  • Employment Relations Act 1999
  • Employment Act 2002
  • Employment Relations Act 2004
  • Disability Discrimination Act 2005

Brexit implications on Employment law

EU rules will no longer apply in the UK as agreed in the UK-EU Withdrawal Agreement, which ended on 31st December 2020. Although Brexit will have some impact on UK employment law, it will be some time before actual changes can be seen to be made through UK legislation. EU employment rules have been part of UK law either through secondary legislation or Acts of Parliament and have been adapted to the UK context. Experts observe that the Trade and Cooperation Agreement reached between the UK and EU incorporates level playing field commitments that seek to prevent either the UK or the EU gaining a competitive advantage including in rights at work and employment standards. The commitments given by both the UK and EU are intended to ensure that neither will weaken or reduce labour or social rights and standards below the levels in place at the end of the transition period where this affects trade or investment between the UK and EU, including by way of a failure to enforce those laws and standards.

Brexit implications on Employment Law

Brexit could potentially still have a big impact on employment law, as many employee protections derive from the European Union. However, EU employment rules do not apply to the UK directly. Instead they are part of UK law either through secondary legislation or Acts of Parliament. They have often been adapted to the UK context too. For example, the well-known Working Time Directive, which grants EU citizens a statutory right to 20 days of paid leave, in the UK provides for 28 days of leave (including bank holidays). Legal experts believe that such laws are too deeply embedded in statute to be easily rewritten, which in turn sets a pretty high political barrier to repealing them.


How Employment Law differs around the world

Employment laws are well established around the world, placing certain obligations on employers and giving rights to employees to a varying extent depending on the applicable laws. In most jurisdictions, the employee relationship is required to be contractual so the local principles of contract law will also apply. Thomson Reuters Practical Law lists some key areas on how employment law differs around the work – these are elaborated below.

 Terms of employment: The terms of the employment relationship between the employer and employee may be given different names in different jurisdictions including clauses, articles, sections or paragraphs. The written document they are contained in may be referred to as an employment contract, employment agreement or statement of terms.

 Employment status: In some countries, the relationship between the employer and the individual may not be a typical employer–employee relationship. For example, in Singapore, the Employment Act differentiates between those employees who receive additional entitlements because they fall under a particular section of applicable legislation to those who do not. Whether an employee falls under a particular section would depend upon the amount of their salary not exceeding certain prescribed thresholds.

 Working hours: In other jurisdictions such as France, employees may not work more than 10 hours per day and they may not work more than a maximum of 48 hours in any one week. These maximum limits however do not apply to senior executives or employees who work a fixed number of days per year.

 Minimum wage: Whilst the UK has a National Minimum Wage, some countries – even in Europe – do not. For example, it is interesting to note that Switzerland has no Swiss minimum wage. This is despite efforts from the government to introduce one in 2014. This means that salaries in Switzerland are left to the open market, except in some industries where collective bargaining agreements result in specific worker rights and minimum wages.

 Permission to work: In certain circumstances, the employer may want to expressly include requirements in the employment terms to ensure that the employee is eligible to commence their employment. For example, the employer may want to make any offer of employment subject to the employee having the required qualifications.

 Annual leave: In most jurisdictions in accordance with the legislation, the employee is entitled to paid annual leave which can vary depending on their length of service and is usually prorated in the first and last years of service according to the amount of the leave year that is worked by the employee. In certain jurisdictions, annual leave has to be accrued before it can be taken.

Kuwait employees

Employment contracts

All employees should have a contract of employment – which can be written or oral – that contains the terms and conditions governing the relationship between the employer and the employee. Other forms include statutory terms derived from employment legislation or terms incorporated into contracts from other sources such as collective agreements.

An employment contract is made up of:

✓ Specific terms agreed in writing – 'express terms' – such as the employee's pay and working hours.

✓ Terms that are part of employment law – 'statutory terms'.

✓ Terms too obvious to be written – 'implied terms'.

✓ Terms put into the contract from other sources – 'incorporated terms' – such as a staff handbook or an agreement affecting many employees.

All employees should have a contract of employment – which can be written or oral – that contains the terms and conditions governing the relationship between the employer and the employee. Other forms include statutory terms derived from employment legislation or terms incorporated into contracts from other sources such as collective agreements.

Implied Terms

It is important for employment lawyers to be aware of the situations in which a term will be implied into a contract of employment. An employment contract consists of terms from a number of sources. Some terms may be contained in a collective agreement, which has been incorporated into the employment contract, usually by explicit reference or by custom and practice. Meanwhile, a number of terms are not expressly agreed at all but are implied into the contract, either by common law or by statute. Implied terms are most frequently cited against employers, as the basis for either a constructive dismissal claim or a claim for damages. However, employers may also need to rely on implied terms where the contract is silent.

Duty of Care & Duty of Trust

Every contract of employment has general implied terms for employees and employers, for example an employee and employer have a duty of trust to each other, therefore if an employee lied when they said they were sick to get time off work, they would have broken an implied contractual term of trust. An employee and employer have a duty of care towards each other and other employees – an employer should provide a safe working environment for their employee and the employee in turn should use equipment safely. Employees have a duty to obey any ‘reasonable’ instructions given by their employer, and whilst there is no legal definition of reasonable, it clearly wouldn’t be reasonable to tell an employee to do something illegal

Terms implied by custom & practice

One can only imply a term by ‘custom and practice’ when there’s no express term dealing with the issue. For example, if an employee worked 35 hours a week for 10 years, even though the contract says they should only do 30 hours, they don’t have the right to work 35 hours by custom and practice. The exception to this would be if the employee and employer have verbally agreed that the employee will always work a 35-hour week. To summarise, if there’s nothing clearly agreed between an employee and employer about a particular issue, it may be covered by an implied term.

Relevant resources

Here are some useful resources to explore these topics further:


UK Government

Thomson Reuters Practical Law: Resources on Practical Law

Chambers Student


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