Welcome to your comprehensive revision guide for UK Employment Law. This dynamic area of law governs the intricate relationship between employers and employees, and a solid understanding is crucial for success in your studies and on the SQE. This guide will navigate you through the core topics, including the critical distinction of employment status, the statutory protections against unfair dismissal, the complexities of redundancy, the pervasive issue of discrimination, the employee-protective TUPE regulations, and the vital role of whistleblowing.
Understanding Employment Status
The gateway to most employment rights is employment status. The law distinguishes between three main categories: employees, workers, and the self-employed. The category an individual falls into determines their statutory rights and protections. This is a foundational concept in employment law and a frequent subject of litigation, especially with the rise of the gig economy.
The Legal Tests for Employment Status
Over the years, courts have developed several tests to determine status. No single test is conclusive; a court will look at the whole picture of the relationship.
- Control: How much control does the "employer" have over the individual? This includes what they do, and how, when, and where they do it. See Yodel Delivery Network Ltd v CJEU [2020] EUECJ C-692/19.
- Personal Service: Is the individual required to perform the work personally, or can they send a substitute? A genuine, unfettered right to substitute is a strong indicator of self-employment. See Pimlico Plumbers Ltd v Smith [2018] UKSC 29.
- Mutuality of Obligation: Is there an obligation on the employer to provide work and on the individual to accept it? This is a crucial element for establishing an employment contract. See Carmichael v National Power plc [1999] 1 WLR 2042.
A landmark case is Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497, which established a three-pronged test: (1) The person agrees to provide their own work and skill in return for a wage; (2) The person agrees, expressly or impliedly, to be subject to the other’s control to a sufficient degree; and (3) The other provisions of the contract are consistent with it being a contract of service.
More recently, the Supreme Court in Autoclenz Ltd v Belcher [2011] UKSC 41 confirmed that tribunals must look beyond the written contract to the reality of the working relationship, especially where there are concerns about sham contract terms that do not reflect the true agreement. This was famously applied in the gig economy case of Uber BV v Aslam [2021] UKSC 5, where the Supreme Court found that Uber drivers were workers, not self-employed contractors.
Comparing Rights Across Statuses
The practical importance of status is clear when comparing the rights available:
| Right | Employee | Worker | Self-Employed Contractor |
|---|---|---|---|
| Unfair Dismissal Protection | Yes | No | No |
| Statutory Redundancy Pay | Yes | No | No |
| National Minimum Wage (National Minimum Wage Act 1998) | Yes | Yes | No |
| Paid Annual Leave (Working Time Regulations 1998) | Yes | Yes | No |
💡 Key Takeaway
Correctly identifying employment status is the essential first step in any employment law problem question. Misclassification by an employer can lead to significant liability for back pay, holiday pay, and other claims. The courts are increasingly focused on the reality of the relationship, as seen in cases like Street v Mountford [1985] AC 809 and the modern gig economy cases.
Unfair Dismissal
The right not to be unfairly dismissed is a cornerstone of UK employment protection, enshrined in the Employment Rights Act 1996 (ERA 1996). To bring a claim, an individual must be an employee with at least two years of continuous service.
Establishing a Fair Dismissal
An employer must demonstrate a potentially fair reason for the dismissal. The ERA 1996 sets out five such reasons:
- Conduct: The employee's behaviour (e.g., theft, insubordination).
- Capability or Qualifications: The employee's skill, aptitude, or ability to do the job.
- Redundancy: A genuine redundancy situation (covered below).
- Statutory Illegality: Continuing to employ the person would break the law (e.g., a driver who loses their license).
- Some Other Substantial Reason (SOSR): A catch-all category for reasons that don't fit elsewhere, such as a major business reorganisation. See Hollister v National Farmers Union [1979] ICR 542.
The Test of Fairness
Even with a fair reason, the dismissal must be fair in all the circumstances. This involves two key elements:
- Procedural Fairness: Did the employer follow a fair procedure? This often involves following the ACAS Code of Practice on Disciplinary and Grievance Procedures. A failure to do so can make a dismissal unfair. The case of Polkey v A E Dayton Services Ltd [1988] ICR 142 established that a dismissal will be unfair if a fair procedure is not followed, even if the outcome would have been the same.
- The Band of Reasonable Responses: The tribunal must decide whether the employer's decision to dismiss fell within the 'band of reasonable responses' that a reasonable employer could have taken. It is not for the tribunal to substitute its own view. This principle was established in Iceland Frozen Foods Ltd v Jones [1983] IRLR 439 and affirmed in cases like Post Office v Foley [2000] IRLR 827.
For conduct dismissals, the test in BHS v Burchell [1978] IRLR 379 is critical. The employer must show it had a genuine belief in the employee's misconduct, that this belief was based on reasonable grounds, and that those grounds were established after a reasonable investigation.
A related concept is constructive dismissal, where an employee resigns in response to a fundamental breach of contract by the employer. This is treated as a dismissal under the ERA 1996. See Western Excavating (ECC) Ltd v Sharp [1978] QB 761.
📝 Exam Tip
For SQE or exam questions on unfair dismissal, always use a clear, logical structure: (1) Check eligibility (employee status, 2 years' service). (2) Identify the dismissal type (actual, constructive, or expiry of fixed-term). (3) Determine the employer's potentially fair reason. (4) Critically analyse the fairness of the procedure and the reasonableness of the decision to dismiss (the 'band of reasonable responses' test).
Redundancy
Redundancy is a specific form of dismissal and a potentially fair reason under the ERA 1996. The statutory definition is found in s.139 ERA 1996 and covers situations where a business closes, a workplace closes, or the employer's requirement for employees to do work of a particular kind has ceased or diminished. See Murray v Foyle Meats Ltd [1999] UKHL 30.
A Fair Redundancy Procedure
To avoid a finding of unfair dismissal, an employer must follow a fair redundancy process. Key elements, established in cases like Williams v Compair Maxam Ltd [1982] IRLR 83, include:
- Warning and Consultation: Providing as much warning as possible and engaging in meaningful consultation with affected individuals (and, where applicable, unions, under the Trade Union and Labour Relations (Consolidation) Act 1992). Consultation must be more than a mere formality.
- Fair Selection Pool: Identifying an appropriate pool of employees from which to select for redundancy. An employer has a wide discretion here, but the choice must be rational.
- Objective Selection Criteria: Using objective, non-discriminatory criteria to score and select employees from the pool. Criteria should be measurable and consistently applied.
- Considering Alternatives: Exploring alternatives to redundancy, such as seeking volunteers or searching for suitable alternative employment within the organisation. A failure to do so can make a dismissal unfair. See Kerr v Vetreria Ltd [1991] IRLR 341.
⚠️ Common Mistake
A common mistake is to confuse wrongful dismissal with unfair dismissal. Wrongful dismissal is a common law claim for breach of contract, typically for dismissing an employee without giving them their contractual notice period. Unfair dismissal is a statutory claim under the ERA 1996 based on the fairness of the reason and procedure. They are separate claims with different legal tests and potential remedies.
Discrimination in the Workplace
The Equality Act 2010 is the primary legislation prohibiting discrimination. It protects individuals from discrimination based on nine 'protected characteristics': age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation.
Key Forms of Discrimination
| Type of Discrimination | Description & Key Case |
|---|---|
| Direct Discrimination | Treating someone less favourably because of a protected characteristic. No defence is available. See James v Eastleigh Borough Council [1990] 2 AC 751. |
| Indirect Discrimination | Applying a provision, criterion or practice (PCP) that puts people with a protected characteristic at a particular disadvantage. It can be defended if the PCP is a proportionate means of achieving a legitimate aim. See Essop v Home Office [2017] UKSC 27. |
| Harassment | Unwanted conduct related to a protected characteristic that violates dignity or creates an intimidating, hostile, degrading, humiliating or offensive environment. See Richmond Pharmacology v Dhaliwal [2009] IRLR 336. |
| Victimisation | Treating someone badly because they have made or supported a complaint under the Equality Act (a 'protected act'). See Nagarajan v London Regional Transport [1999] IRLR 572. |
💡 Key Takeaway
The burden of proof in discrimination cases has a specific structure. The claimant must first establish facts from which a tribunal could conclude, in the absence of an adequate explanation, that discrimination has occurred. If they do, the burden shifts to the employer to prove that they did not commit the discriminatory act. See Igen v Wong [2005] IRLR 258.
TUPE and Whistleblowing
Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE)
TUPE regulations protect employees' rights when the business or part of the business they work for is transferred to a new owner. The core principle is that employees transfer to the new employer on their existing terms and conditions of employment. Dismissals connected to a TUPE transfer are automatically unfair unless there is an 'economic, technical or organisational' (ETO) reason entailing changes in the workforce. An ETO reason must relate to the conduct of the business, not the transfer itself. See Cheshire and Wirral Partnership NHS Foundation Trust v Sacked [2022] EAT 1.
The European Court of Justice in Spijkers v Gebroeders Benedik Abbatoir CV [1986] ECR 1119 established the 'going concern' test to determine if a transfer of an economic entity has occurred, considering factors like the type of business, whether assets are transferred, and if staff are taken on.
Whistleblowing (Public Interest Disclosure Act 1998)
This legislation, which amends the ERA 1996, protects workers who make a 'protected disclosure' (i.e., blow the whistle) about wrongdoing in the workplace. The disclosure must be in the public interest. In Chesterton Global Ltd v Nurmohamed [2017] EWCA Civ 979, the Court of Appeal held that a matter could be in the public interest even if it only affects a private contract, depending on the context. A worker who is dismissed or subjected to a detriment for making a protected disclosure can bring a claim to an employment tribunal. See also Royal Mail Group Ltd v Jhuti [2019] UKSC 55, where the Supreme Court held that the knowledge of a senior manager who deliberately hid the real reason for dismissal could be attributed to the employer.
Wages and the Working Time Regulations
Unlawful Deduction from Wages
Part II of the Employment Rights Act 1996 protects workers from having unauthorised deductions made from their wages. A deduction is only lawful if it is required by statute (e.g., tax), authorised by the worker's contract, or the worker has given their prior written consent. See British Airways Plc v Williams [2010] UKSC 16.
Working Time Regulations 1998
These regulations, derived from an EU directive, grant workers several key rights and protections relating to their working hours:
- A limit of an average of 48 hours per week on the hours a worker can be required to work, though individuals can opt out of this.
- A right to 11 hours' rest per day.
- A right to a day off each week.
- A right to an in-work rest break if the working day is longer than six hours.
- A right to 5.6 weeks of paid annual leave. See Stringer v Revenue and Customs Commissioners [2009] UKHL 31.
Frequently Asked Questions (FAQ)
What is the difference between a worker and an employee?
An employee works under a contract of employment and benefits from the full suite of statutory employment rights, including unfair dismissal and redundancy pay. A worker has a more limited set of rights (e.g., minimum wage, paid leave) and is not protected against unfair dismissal. The distinction depends on factors like personal service, control, and mutuality of obligation.
How long do I need to work somewhere to claim unfair dismissal?
Generally, an employee needs two years of continuous service with their employer to be eligible to bring an unfair dismissal claim. However, there is no service requirement for dismissals that are 'automatically unfair' (e.g., for whistleblowing or asserting a statutory right).
What is a 'reasonable adjustment' for disability discrimination?
Under the Equality Act 2010, employers have a positive duty to make reasonable adjustments to support disabled job applicants and employees. This duty is triggered where a provision, criterion, or practice (PCP) or a physical feature of the premises places a disabled person at a substantial disadvantage. Adjustments can include altering working hours, providing special equipment, or reallocating duties.
Can I be made redundant while on maternity leave?
Yes, but the redundancy must be genuine and the reason for selection must not be connected to your pregnancy or maternity leave. If it is, the dismissal would be automatically unfair and discriminatory. Furthermore, an employee on maternity leave whose role is made redundant has a special right to be offered any suitable alternative vacancy that exists (Regulation 10, Maternity and Parental Leave etc. Regulations 1999).
What is the first step in bringing an employment tribunal claim?
Before you can lodge a claim with the employment tribunal, you must first contact ACAS (Advisory, Conciliation and Arbitration Service) to start Early Conciliation. This is a mandatory step for most claim types. A conciliator will try to help you and the employer reach a settlement. If conciliation is unsuccessful, ACAS will issue a certificate, allowing you to proceed with your tribunal claim within the strict time limits.