Employment law in the UK differs in several respects from the labor law regime in the United States. We have set out below some key principles of UK employment law to assist you when dealing with clients and issues that involve the UK:
- Termination of employment - Employees in the UK have a right not to be unfairly dismissed – but only after they have completed two full years of service – and must receive statutory minimum notice of dismissal. In order to dismiss fairly, an employer must have a fair reason and follow a fair process. Compensation for unfair dismissal is capped at around US$115,000. Failure to have a fair reason or follow a proper procedure can therefore be costly.
- Discrimination - UK law provides protection from discrimination on grounds of age, disability, race, sex, religion or belief, sexual orientation, gender reassignment, pregnancy and maternity, and marital status. Compensation for discrimination is uncapped, but largely based on actual financial loss.
- Whistleblowing - Workers who blow the whistle on their employer's wrongdoing are protected from dismissal or detriment and can claim uncapped compensation.
- Corporate transactions - There is employment transfer legislation in the UK (known as 'TUPE'), which is complex and onerous. Employees who work in a business which is sold as a going concern – or who provide services which are outsourced – could automatically transfer with the business to the purchaser (or supplier in an outsourcing situation). These transferring employees will be protected from dismissal and any contractual changes which are connected to the transfer. Information and consultation obligations also arise. Breach of the transfer legislation can give rise to substantial claims. In certain circumstances, share sales can trigger obligations under the transfer legislation.
- Restructurings and redundancies - Where 20 or more employees are dismissed as part of a restructuring or redundancy exercise, an obligation to consult on a collective basis may be triggered. Collective redundancy consultation is very procedure driven and small errors in process can lead to significant liability, including potential criminal liability.