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by Amanda K. Caldwell
The United Kingdom ("UK"), comprised of England, Northern
Ireland, Wales and Scotland, has a population of over 62 million people, is
culturally diverse and remains one of leading financial and service centers of
the world. It is often considered the entry way to the rest of Europe and is a
major international trading power. For these reasons, many companies decide to
do business in the UK. This article will provide a brief overview of some of
the basic employment and labor laws in the UK and will also introduce some of
the most critical 2013 labor reforms.
Employers within the UK can chose the legal system they
wish to govern employment agreements. However, if no choice of law designation
has been made in the employment agreement, the law of the country in which the
employee is located will typically apply. Additionally, pursuant to the
Employment Rights Act of 1996, all employees in the UK are entitled to receive,
within two (2) months of hire, a written statement from their employer setting
forth the terms and conditions of the employment. This statement is required
for both fixed-term and indefinite contracts and must include the following
II. Wage and Hour
The National Minimum Wage Act of 1998 sets forth the
minimum pay per hour almost all workers within the UK are entitled to by law.
The minimum wage rate varies per age group up to the age of twenty-one (21),
but for any employee over twenty-one (21) years of age, the minimum wage rate
is currently £6.19 an hour. The government is also set to publish
consolidated and simplified National Minimum Wage Regulations in late April of
An employee's standard number of working hours are the hours set forth in the
employee's particular employment contract. Typically, adult employees may not
be required to work in excess of forty-eight (48) hours per week. Employers are
not required to pay workers for overtime for hours worked in excess of that set
forth in the employment contract but, the employees' average pay for the total
hours worked may not fall below the national minimum wage.
III. Holiday Entitlement
Pursuant to the Working Time Regulations of 1998, almost
all employees in the UK are legally entitled to 5.6 weeks paid holiday time per
year (known as statutory leave entitlement or annual leave). Part-time
workers are entitled to a pro-rata amount of holiday pay based upon the 5.6
weeks for full time employees.
IV. Discrimination Laws
The primary legislation prohibiting discrimination and
harassment in the UK is the Equality Act 2010. The law, which follows three
major European Union Directives, strictly prohibits discrimination and
harassment based upon a wide array of protected characteristics, including the
The laws prohibiting discrimination apply to hiring, the terms and conditions
of employment, training, promotions, terminations, and employee
compensation. The law also prohibits both direct and indirect
discrimination. Direct discrimination occurs if the reason for a person being
treated less favorably than another employee is based upon the employee's
protected characteristic as defined by the law. Indirect discrimination refers
to the situation when a particular employment policy adversely affects or
disadvantages a group of employees who are of a particular protected
characteristic as set out in the Act.
Other anti-discrimination legislation in the UK includes the Equal Pay Act of
1970, the Race Relations Act 1976, the Disability Discrimination Act of 1995
and the Employment Equality Regulations relevant to sexual orientation and age.
V. Maternity and Paternity Leave
Employees are entitled to twenty-six (26) weeks of
maternity leave which is referred to as "Ordinary Maternity Leave"
and can receive either maternity allowance or statutory maternity pay. Some
employees are entitled to a longer period of leave, referred to as
"Additional Maternity Leave" for another twenty-six (26) weeks for a
total of fifty-two (52) weeks per year, if they satisfy certain qualifying
conditions. It is unlawful to dismiss an employee for any reason related to her
pregnancy. At the expiration of maternity leave, the employee is entitled to
resume her normal job pursuant to the same terms and conditions which existed
prior to the leave. However, in a redundancy situation or if there is some
other genuine reason why the employee's original position is no longer
available at the expiration of the leave, the employee must be offered another
suitable available position within the company.
Pursuant to the Revised Leave Directive, effective March 8, 2013, each parent
is now also entitled to eighteen (18) weeks, instead of thirteen (13) weeks, of
unpaid leave per child but limited to a maximum of four (4) weeks per
year. Some employers offer longer or more flexible leaves but they must
offer at least the minimum amount of leave under the law.
Employment contracts can be terminated for various reasons
including expiration of the employment contract, termination by mutual
agreement, death or retirement of the employee, dismissal of the employee, or
due to a redundancy. Both the employee and employer are normally entitled to a
minimum period of notice of termination of the employment relationship as set
forth in the employee's employment agreement. The UK government is in the
process of preparing a model template settlement agreement to be utilized when
employers and employees wish to terminate the employment relationship and plans
on introducing the template in the summer of 2013.
In the UK redundancies are implemented when employers
determine that the company cannot afford to keep an employee and must terminate
the employment. Long-term employees are entitled to compensation from their
employers in the event they are made redundant and the law requires employers
to act fairly when making redundancy decisions. Specifically, the
employer is required to send the employee a written statement explaining why
the employer wants to implement the redundancy and hold a consultation meeting.
If the employer plans on dismissing more than twenty (20) employees, it must
have a group consultation; otherwise the employer may consult employees individually.
The employer must always consult with the employees at least 30 days before the
dismissal and give them or their representatives written information about the
proposed number of dismissals, the effect dismissals will have on the company
and alternatives to dismissal.
If the employer is proposing to implement one hundred
(100) or more redundancies, effective April 6, 2013, there is now a forty-five
(45) day minimum consultation period pursuant to the Trade Union and Labor
Relations Consolidation Act. Prior to April 6th, there was a ninety (90) day
minimum consultation period.
Read more articles at Fisher & Phillips' Cross Border
Employment Law Blog.
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