How Does Employment Law Impact Your Business?


If your small business is taking off and you think it’s time to take on some employees, we have the next steps covered.

This blog is a beginner’s guide to learning everything small business owners, entrepreneurs, and tradespeople need to know about UK Employment Law.


What Is Employment Law?

Before you begin hiring employees, it’s important to familiarise yourself with labour laws.

What is employment law? Employment law regulates the relationships between workers, employers, and trade unions. The Employment Rights Act 1996 was put in place to protect employment rights in cases of unfair dismissal, wage protection, or employee termination. Along with respecting your employees, it’s the law to support employee rights.

So, how does labour law affect your business? Recognising the rights and responsibilities of your employees not only benefits you in the long run if an employee makes a claim, but ensures you have a fair and level playing field for all potential applicants.


Employment Law For Employees

Are you wondering what your general employment rights are?

If you have recently experienced discrimination or are not sure how to complain about your employer, worker protection laws are in place to help. Labour laws for employees ensure fair treatment and a working environment that encourages productivity. Learn about employee laws here.

Employee Statutory Rights

Understanding the legislation that affects employees helps prevent a future conflict in your working environment.

Employee statutory rights:

Minimum wage

A written contract

Not to be harassed or discriminated against


Paid sick leave

Flexible working arrangements

Maternity, Paternity, Parental leave


Employment Law for Employers

Employer legislation protects and regulates the working relationships within your small business. UK employer rights cover all aspects of employment from contracts and conditions to employee treatment and working hours. This means it’s vital to recognise and comply with employment law rules to avoid expensive employment claims.

Ultimately, employment law acts as the checklist of obligations you must meet to ensure a safe, enjoyable, and productive working environment.



Employment Laws in Practice

Employment law does not apply solely to employee working relationships but affects different areas of your business. Whether it’s data protection or business transfers or takeovers, employment law plays an important role in the processes of your small business.

Although hiring a HR manager or in-house HR department is not a legal requirement in the UK, complying with HR laws remains vital for success. Operating your small business in accordance with these policies and procedures can help govern daily operations and protect both employer and employee.

Not sure what policies a UK company must have? Here are the common HR policies that must be implemented within your small business:


UK employment law affects recruitment by ensuring the hiring process is fair and non-discriminative. When planning to recruit and select employees, it’s important to consider these factors:

Their right to work in the UK

Criminal records

Data protection

Discrimination based on age, disability, gender identity, pregnancy, race, or religion

Discipline, Grievances & Dismissal

If you feel you need to address an employee’s working performance, a disciplinary procedure is used to assess and review their position in your small business.

Alternatively, an employee may bring to your attention a problem or complaint which would require a grievance procedure. The outcome of either of these policies may require dismissal, which must be justified and fair to comply with UK rules and regulations.

Bullying & Harassment

Under the Equality Act 2010, bullying or unwanted behaviour in the workplace can be classified as harassment. This discrimination law protects employees from unacceptable working environments that interfere with their ability to work productively.

Equal Pay

Unless justifiable, as outlined in the Equality Act 2010, men and women working at the same level of employment must receive equal pay. By law, within your small business, pay must be based on the equal value of working performance, irrespective of gender.

Maternity and Parental Rights

Employment law in the UK sets out governing rules to support working mothers and fathers. Maternity and parental rights mean that as a business owner, you must ensure parents receive 1 or 2 weeks of paternity leave when a baby is born. This legislation also applies when adopting a child.


If an employee reports any type of wrongdoing, they may be entitled to open a claim at an employment tribunal. ‘Whistle-blowers’ are protected by law, meaning employees can speak out about misconduct in the workplace. Whether this is mismanagement or abuse of power, as a business owner it is important to maintain a strong brand ethos throughout your working environment.

Protection from Discrimination

Equal opportunities in your workplace are vital for the longevity and success of your business. Offering employment opportunities to your local community, irrespective of discrimination on grounds of age, sexual orientation, marital status, race, gender, religion, and disability, propels your employee morale. There is no better way to ensure your team is effective and efficient than by establishing a creative and diverse space to collaborate and work.

Health & Safety

Does your business provide a safe and healthy working environment?

This isn’t just a basic expectation but a legal UK requirement. Both employees and visitors must abide by health and safety rules to prevent work-related accidents or hazards. Maintaining good health and safety policies throughout your business can save you money in the long run, as employee downtime and accidents are less likely, lessening the disruption to your day-to-day operations.

TUPE and Redundancy

What is a TUPE?

TUPE refers to the Transfer of Undertakings (Protection of Employment) Regulations. A TUPE transfer occurs when an employee is transferred from one employer to another. Throughout a TUPE process, employees are entitled to a fair redundancy process. As a business owner, it’s important to prioritise the prevention of redundancies and unfair dismissals.

Employment Tribunals

What is an employment tribunal? In short, it is the isolated resolution of employee and employer disputes over employment rights. If an employee has experienced unfair dismissal or breached their contract, they can make a claim to an employment tribunal. This is an unbiased process to manage and resolve claims.

Data Protection

Employing staff in your business requires processing their personal data. This means you must follow strict data protection principles when using the data of your employees. As a small business owner, you must fairly, lawfully, and transparently share and process employee data.

Working Hours & Holidays

All employees of your business are rightfully owed 28 days of paid annual leave per year. Employees have a statutory right to this paid leave which can include the eight UK bank holidays within the holiday entitlement.

Terms & Conditions of Employment

Successfully managing your employees starts with a clear breakdown of their position within the business. The terms and conditions of employment are critical to defining the working relationship between employer and employee.


Top Employment Law Tips for Small Businesses

HR support for small businesses can be overwhelming as there is a lot to consider to ensure you successfully create a happy and safe working environment.

Here are our top tips to make the process a little less complex:

Using freelancers can offer you flexibility without the worry and hassle of managing and operating an HR team. Leveraging the expertise of freelancers can propel your business and save employment law regulations.

Employing short-term staff also gives small businesses the ability to reduce overall staffing costs. Capitalising on temporary employee contracts allows you to find the right person for the job without committing to permanent contracts.

Make sure employee files and documentation are safe, confidential, and maintained correctly.

Create an employee handbook to keep at hand in the case of disputes or claims. Outlining employee expectations and daily procedures prevents miscommunication and unnecessary disagreements.

Track and monitor changes in UK employment law. HR laws are constantly changing with the working climate, that’s why it’s vital to stay on top of each legalisation.

Where To Get Employment Law Help

Employment law and HR concerns are complex and time-consuming to monitor but you don’t have to do it alone, with expert and professional advice you can easily navigate HR successfully and legally. Legal help and advice are available and can come in various forms to help you navigate the world of human resources.

Professional Associations

Professional associations can provide free and impartial advice for both employers and employees. This means that as a small business, you can access global learning platforms to discover the fundamentals of HR and build your people management skills.

Here are our top professional associations:

  1. The Law Society
  2. Chartered Institute of Personnel and Development (CIPD)
  3. The Certified Practitioner in Human Resources (CPHR)

Advice & Arbitration Services

Advice and arbitration services are the workplace experts that provide free and unbiased advice for employers and employees. Whether you require training, or help to resolve internal disputes, this service can make informed recommendations based on both sides of a dispute.

Not sure who to reach out to? Try out these advice and arbitration services:

  1. Law centres
  2. Trade unions
  3. ACAS

Chartered Legal Executives

Specialised in a particular area of law, chartered legal executives can help you manage administration and payroll responsibilities legally. If you’re struggling with the complexity of employment law, seeking professional help is the best way to ensure all your employees get the support they need.


Whether you’re a one-person or small HR team, accessing expert information and guidance from solicitors and law firms can make HR and people management a lot easier to manage. Solicitors can not only help by reviewing potential compliance risks but can expand upon the ever-changing legal framework.


Do you need immediate legal advice? A barrister can provide experienced and established expert advice in the employment law field. Speaking directly with a specialist barrister who has a clear understanding of the day-to-day consequences of employment law can help you overcome any unique HR challenge that might come your way.

Not sure what other legislation you need to know about for your new business?

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What is employment law?
How employment law may impact your business
Employment law in practice
Who can help with employment law?
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