Employing Staff In The UK

Welcome to this HR Blast. After experiencing a few HR issues in recent months as a result of international companies not knowing how to manage their UK staff in accordance with the law, in this HR Blast we look at your obligations.

Read on if your business is based outside the UK but you have a small team in the UK, or if you are currently expanding your UK based team and want to make sure you get the HR right.

As Jaluch publishes many articles on HR topics, we have added below where you might wish to read articles that provide more information.


Do staff need a written contract of employment?
Yes, this must be issued within 8 weeks. Failure to issue a statement or contract covering the legal essentials could result in a fine of 4 weeks’ pay per person as well as creating a host of other problems for you, if your relationship with your employee deteriorates at any point. Read our ‘the need-to-know bits when dealing with employment contracts‘ Blast

Can we employ people in the UK on a self-employed basis?
Yes, but you need to be very cautious as many people who are paid on a self-employed basis are in fact, in the eyes of the law, employed and this can then cost you a significant amount of money if ever your employee challenges their employment status in a court of law.

Which foreign nationals have the right to work in the UK without a visa or work permit?
Currently EU nationals have the right to work in the UK. This may change at some point. Employing someone who does not have the right to work in the UK or who has provided fraudulent documents can result in an unlimited fine and up to 5 years in prison. The fine used to be £10,000 per person so don’t expect the fine to be small. https://www.gov.uk/penalties-for-employing-illegal-workers

What checks do we need to make when individuals start working for us in the UK?

  • You need to see their passport or identity documents
  • You need to see their NI number which is required for the deduction of taxes.
  • You may choose to background check your employee in respect of qualifications and employment references

Do we need a lawyer to draw up contracts of employment and support with legal claims brought by employees?
In the UK it is entirely normal for an HR business such as Jaluch to draw up for you the necessary documents including a contract of employment. You do not need to use the services of a lawyer. Lawyers may have significantly higher charges for doing the same work as an HR Consultant would do plus they often have a tendency to draft things in legal speak that employees dislikeand more importantly, don’t understand.

Ongoing Management

What are the relevant laws we need to be aware of? Here is a selection of some of the most important laws (but we have many and they are often complex and further complicated by the volume of case law we have)

  • Employment Rights Act 1996
  • The Equality Act 2010 (discrimination laws)
  • Working Time Regulations (holidays and hours of work and rest breaks)
  • Data Protection Act(security of information, storage of HR information etc)
  • Asylum and Immigration Act (relevant to identify who you can employ in the UK)
  • Human Rights Act
  • The Bribery Act 2010 (applies to private sector as much as public sector)
  • National Minimum Wage and National Living Wage
  • TUPE (Transfer of Undertakings Protection of Employment) (protecting staff during mergers and acquisitions)

What are the basic employment documents we need?

  • Contract of employment for employees
  • Contract for services for self-employed individuals
  • Employment handbook containing the necessary policies
  • Sickness self-certification forms
  • Holiday booking forms
  • Medical information form
  • Appraisal documents (if you do annual reviews)
  • Expenses claims forms

Are regular bonus payments considered to be a legal right?
You need to be careful how you word items on the pay slip and what you write to staff. It is very easy for items that you thought were discretionary to suddenly become contractual and a legal right

How much holiday do staff get?
The legal minimum requirement is 5.6 weeks per year (pro-rata for part-time employees). Bank holidays are not an additional entitlement. Typically in the UK, employers offer 4 weeks plus 8 bank holidays or 5 weeks plus 8 bank holidays. The more usual, especially for service and professional staff is 5 weeks plus bank holidays.

What are the most common employment issues that arise in the UK?
From running an advice service for 14 years these are the most common issues that cross our path:

  • Dismissing someone with less than 2 years service
  • Employee going off sick during disciplinary action
  • Managing employees off sick with stress/employees who are regularly off sick
  • Managing poor performance
  • Managers lack confidence to manage staff competently and in line with legislation
  • Grievances and allegations raised about bullying, discrimination and stress

Dismissing Staff

Can we just sack people who are misbehaving?
Do so at your peril! We have strict and quite complicated procedures to follow if you wish to dismiss someone – for whatever reason. Fines for failing to follow the procedures can be expensive. You might find yourself having to pay an employee off with 12 months salary or more if you mess it up. Don’t be complacent. Read our 5 fair reasons for dismissal Blast.

If we want to move our UK business elsewhere, how do we terminate employment?
You would probably look to make your employees redundant. Again we have complex laws around how to dismiss staff on grounds of redundancy. Be careful to follow the procedures to the letter if you wish to avoid any compensation claims.

We are selling the business and someone has said we need to be aware of TUPE. What is that?
In the UK staff are protected in respect of their employment during mergers and acquisitions. If you are buying a business or selling a business that employs staff then both buyer and seller have legal responsibilities in respect of consulting staff. TUPE is an important piece of legislation that is also highly complex so ensure you get good legal advice on your full responsibilities.

What is ACAS and why do we need to return their phone call if they try to get in touch?
ACAS is a government body that support both employers and employees with legal claims. If ACAS calls you to ask about early conciliation, do not send them away thinking they are touting for business. Their service is free and the arbitration service they offer is important if anyone has brought a legal claim against you.


How much will it cost to set up an HR function or develop the HR basics to manage our UK team?
Just a few thousand pounds should be sufficient to set up the legal paperwork and processes to help you manage your first staff in the UK. If someone quotes you more you are probably paying for more than you need when first setting up. The exception of course is if you are buying HR software as well or setting up review processes, training etc.

Is the EU still relevant in the employment laws the UK has?
Very much so and for the foreseeable future. It is likely to be several years before the impact of Brexit on our employment laws becomes clear.

Is there any difference in what is required in Scotland, England, Ireland and Wales?
There are no differences between England and Wales. There are though different pieces of legislation that apply in Scotland and Northern Ireland. (Southern Ireland is not part of the GB so has an entirely different legal structure)

What are the things we need to be aware when appointing an HR consultancy or lawyer to support us with UK staffing issues?

  • Do they provide just an anonymous document service or can they support with individual issues as well
  • Will they come to your offices or will they always insist you travel to them?
  • Do they have a good track record with customer service?
  • Do they offer you a regular point of contact or will you just have access to a range of people manning a helpdesk?
  • Are their letters and documents all template or will they tailor them to the culture of the business you are running and your preferred personal style of communication?
  • Can they speak to you about employment law in plain English? If they can’t, don’t bother with them.
  • Will they hold your employment documents on their server/portal thereby making it very difficult for you to ever more to another supplier?
  • If they are a small one person operation, what cover can they provide you if they are sick or go on holiday?
  • Do their staff have CIPD qualifications?
  • Are they insured?

Read our UK start up advice – internal or outsourced Blast.

What insurance do we need in respect of staff?
Employers liability insurance is a legal requirement.

If you need support with managing staff in the UK, Jaluch would be delighted to give you a free, no obligation quote. We’ve been in operation since 2002 and with a long track record supporting businesses across the UK, here is what some of our clients say about the service they receive from us.

The support and advice we have received from Jaluch has been invaluable. Whether you just want to run an idea past them or need detailed legal advice they are always on hand to help and reassure. The training packages we have used have been well received by our employees and we certainly plan to book more. I can definitely recommend Jaluch for all aspects of HR and Training.
Joanna Lander, Business Research Group

We have been consulting with Jaluch since 2003 and as we are not of a size to engage our own in-house HR team we continue to avail ourselves of the guidance and advice in this area with Jaluch who have been “spot on” on each and every occasion with excellent results. There is no doubt that I rely on the HR support provided especially at times when often I would otherwise be in a lonely place. The team is approachable, friendly, prompt and professional, providing thorough explanations on processes and issues of the time.
Edward Spiteri, GKD Technik Ltd – Commercial Director

And these are just some of the areas we can support with:

  • Drafting employment documentation
  • Issuing contracts of employment
  • Checking starter documentation to check right to work
  • Support with day to day HR issues
  • Chairing or note taking at disciplinary hearings
  • Giving you an impartial assessment of the extent of a problem you believe is emerging
  • Chairing or supporting at redundancy meetings
  • Responding to claims such as bullying, grievances or formal legal claims

No contract required, use us on a no obligation, pay as you go service until you are confident that we deliver the service you need. We will simply bill you at the end of each month for work carried out on your behalf.  Fixed fee arrangements also possible where requested.

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If you would like to speak to one of the team, please contact us.

The information contained within this article is for general guidance only and represents our understanding of employment and associated law and employee relations issues as at the date of publication. Jaluch Limited, or any of its directors or employees, cannot be held responsible for any action or inaction taken in reliance upon the contents. Specific advice should be sought on all individual matters.

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