Speak to an expert

Speak to an expert

Speak to an expert

What is Employment Law? Seven Things Every Business Needs to Know

Whether it’s employment law ‘basics’ or HR hacks, being in the know on some things will simply make your life as a manager easier. Whether you are new to people management or have been doing it for years you may find you’re asking yourself the same question over again – “why don’t I know the answer to that”? 

Probably because no-ones bothered to tell you, sometimes because it’s considered self explanatory (it’s often really not!), maybe non-one else in the management team knows the answer either or our personal favourite – because it’s your job so you need to figure it out (cue avoidable stress and management time that could have been far better utilised).

The good news? If you have some burning HR questions you’d like the answer to (but have maybe been afraid to ask…) we’ve got you covered. We get asked all sorts all the time and we’ve found that there’s no such thing as a stupid question. So, here’s our top seven things every business needs to know about HR but often non-one bothers to tell you.

  1. What is employment law?
  2. How does employment law affect a business?
  3. What are the main employment laws in England and Wales?
  4. What is one of the best things you can do to help protect your business from employment tribunal claims?
  5. What are the most common employment tribunal claims businesses face?
  6. Is there a legal loophole businesses can use to easily dismiss a new employee?
  7. How can you exit an employee from your business fast?

1) What is employment law? 

At its most basic employment law is about the legal rights and responsibilities employees and businesses have in connection with the employment relationship. 

These can come from:

  • Statute – for example an act of Parliament, such as the Equality Act 2010
  • Case law – decisions made by employment tribunals and courts, for example the Supreme Court
  • Contracts – most commonly contracts of employment 

There are also statutory codes of practice, for example the ACAS code of practice on disciplinary and grievances, which are taken into account by employment tribunals when determining applicable issues.

It’s important that everyone who has people management responsibilities in a business, whether they are a supervisor, a manager or a HR professional has at least an awareness of basic employment law rights and the responsibilities of the business. This can help you to avoid inadvertently falling foul of the law, especially if you combine it with acting fairly and reasonably and making sure that you are familiar with your business’s contracts of employment, policies and procedures.

Remember, employment law can be a fast moving area, so it’s vital to stay up to date to avoid making a mis-step. Our legal updates can help you keep up to speed [insert sign-up for our newsletter?]

2) How does employment law affect a business?

In a nutshell, it informs what you can and can’t safely do in relation to those you employ. It also places obligations on your business as an employer, for example to allow employees a minimum of 5.6 weeks of paid holiday each holiday year. 

Employment law can affect plans you may have for your business / the timescales in which they can be safely enacted. For example, if you are proposing to make redundancies you will often need to follow a fair procedure before dismissing to avoid an unfair dismissal claim.

Such impacts can in some circumstances lead businesses to consider whether they feel it’s in their best interests to follow the law and be fully compliant or whether a more commercial approach is needed. In our experience, cost and time pressures are often key considerations for businesses. Whatever the scenario it’s vital to obtain expert business focussed advice on the specific situation you are dealing with. This is particularly important if you are considering a commercial approach – it’s key that you know what options are available to your business, and what the potential cost implications could be of a particular route so you can make an informed decision.

After all, it won’t have escaped your notice that another way employment law affects businesses is by giving employees a right to make a complaint, usually to an employment tribunal, if they feel they haven’t been treated appropriately. For example, if they think they have been discriminated against. Often, if employees are successful this can result in a business being ordered to pay a sum of money to the employee, this can be costly. For example, there is no limit on the amount an employment tribunal can award in a successful discrimination case or if an employee is automatically unfairly dismissed for whistleblowing. In some cases, the potential cost and likelihood of a successful tribunal claim will understandably influence how a business chooses to manage a particular situation.

3) What are the main employment laws in England and Wales? 

It will come as no surprise that there’s a lot, but if you are looking for a few of the basics to help get you started in managing some everyday HR matters, think about:

  1. The Equality Act 2010 – this sets out the law on discrimination, harassment and victimisation in employment. It defines who is protected, which characteristics are protected, what discrimination, harassment and victimisation are, who is liable and any exceptions to the usual rules.
  2. The Employment Rights Act 1996 – this sets out some of the main employment law rights and responsibilities. For example, an employee’s right not to be unfairly dismissed, the right not to have unlawful deductions made from wages, the law regarding minimum notice and time off for things such as dependent care leave.
  3. The Working Time Regulations 1998 – sets out amongst other things what working time is, limits on working hours and entitlements to rest breaks for adults and young workers, rules on night work, special case exceptions and minimum holiday entitlement. 

Don’t overlook the importance of the ACAS Code of Practice on Disciplinaries and Grievances if you are preparing to deal with a potential conduct issue, an employee grievance or poor performance.

If you want to learn about employment law basics, or need a refresher to help you in your people management role, in our experience there is no better way than through bespoke interactive management training designed and delivered by experts you can trust. 

4) What is one of the best things you can do to protect your business from employment tribunal claims? 

Keep appropriate records – when it comes to dealing with employment tribunal claims evidence is key. You will need to be able to show what has happened and that you have acted correctly. Having appropriate records can make the difference between winning and losing a tribunal claim.

5) What are some of the most common employment tribunal claims businesses face? 

Unfair dismissal and unlawful deductions from wages were often featured as the most frequently brought claims on employment tribunal statistics. Whilst the latest statistics no longer include this information, in our experience unfair dismissal claims remain a common complaint. 

This isn’t surprising when you think about the different sorts of reasons for which a business may decide to dismiss (for example redundancy or conduct issues), the different processes that need to be followed and the requirement to act fairly, reasonably and appropriately based on the facts of the individual situation. Without expert advice on the circumstances of the case it can be all too easy for a business to make a mis-step – or to be given the ‘run-around’ by a difficult employee. If you have a HR issue in your business, reach out for business focussed advice before acting, we are here to help.

Interested in employment tribunal statistics? Quarterly employment tribunal statistics can be found on the government website

6) Is there a legal loophole businesses can use to easily dismiss a new employee? 

Did you know employees need two years continuity of service to be able to bring an ordinary unfair dismissal claim? This means that in some cases it can be possible to dismiss a short serving employee quickly and without the need to follow the usual procedures if they turn out to be unsuitable for the role, for example because of their conduct or poor performance. It’s good to know that this can be the case even if you haven’t included a probationary period in their contract of employment.

When it comes to dismissals of any kind it’s always important to check before you act. There are some claims employees can make irrespective of their length of service, such as discrimination or dismissal for an automatically unfair reason (for example pregnancy) so it’s important to seek advice on the facts of your situation to find out if this is a safe route in the circumstances. We help many businesses deal with problematic new employees, reach out to find out how we can help you too.

7. Is there a commercial way to exit employees from the business without the sleepless nights?

If you are dealing with a difficult situation, it may be worth considering whether using a settlement agreement could help.

Briefly, a settlement agreement is a legally binding contract, voluntarily entered into by an employee and employer, that prevents an employee from making a claim that is covered by the agreement to an employment tribunal or court. The employee usually enters into the agreement in exchange for a payment from the employer. Settlement agreements can be helpful for businesses, often where they wish to exit an employee from their organisation.

Common scenarios where you may want to think about whether a settlement agreement could be a good option include where the business:

  • is finding a formal process such as a redundancy procedure or performance management process too slow or burdensome or
  • wishes to end an employment relationship but it’s unlikely a fair dismissal could be achieved, or you are dealing with a difficult employee or issue and there is a risk of a claim

It’s important to bear in mind that for a settlement agreement to be legally binding there are certain requirements that need to be met, one of which is that the employee needs to receive independent legal advice on the terms and effect of the agreement.

If you think you may wish to use a settlement agreement in your business, reach out for further information and advice on your situation before taking any action, including broaching the matter with the employee. 

Have a HR issue that’s troubling your business? Get in touch.


Related Articles
Scroll to Top