Last updated: 16.09.21

What is Employment Law?

Employment law is a general term used to describe all of the legal rules, rights and regulations that affect what can and can’t be done in regards to hiring, promotions, resignation, contract termination, job benefits, and workplace conduct and complaints. It’s an incredibly broad area of law that is constantly evolving and growing as the employment landscape changes and develops, but can generally be divided into laws and rights that affect employees and laws or rights that affect employers.

Aspects of employment law range from general guidelines for contracts to official processes to follow in the event of workplaces discrimination or harassment. It protects both employers and employees by establishing standards of work and ensuring that everyone has legal rights that stop them from being exploited or treated unfairly.

Whether you’re a business owner or an employee yourself, understanding basic employment rights and laws is essential to creating a safe, fair working environment and knowing what to do in the event of a problem. This article covers the purpose of employment law, the key pieces of legislation that inform it, and how businesses and organisations are affected.

What Is the Purpose of Employment Law?

The purpose of employment law is to regulate and standardise the relationship between employers and employees. It protects both businesses and the people that work for them by giving legal guidance on what to do in a wide range of employment and redundancy scenarios, ensuring that everyone is treated fairly and that standards are kept high.

Employment law also establishes expectations in the workplace, as it sets out what employees can expect from their employers and what employers can legally ask their staff to do. This means that people aren’t overworked in their roles and that it is easy for employees to identify whether they are being exploited, leading to better working conditions for everyone.

Discrimination and workplace equality are also managed by employment law, as official procedures are put in place for employees to follow if they feel they are being treated unfairly. Not only does this reduce discrimination by demonstrating that there will be severe consequences, but it provides a standardised process to follow in the event of discriminatory behaviour which means that compensation and reparations are given.

Another key purpose of employment law is to make sure that all workplaces are safe environments. By making employers responsible for the health and safety of their staff, every kind of working environment should meet relevant safety standards which means that employees can feel confident and protected in their workplace.

It may seem like employment law is mainly there to protect employees, but employers benefit from these regulations just as much. Following guidelines and adhering to standards means that employers don’t run the risk of being sued by their employees, saving them money and preserving their reputation.

Employment law benefits everyone, helping to maintain high standards in the workplace and protect all members of every organisation across a wide range of scenarios. 

What Is the Employment Act?

The Employment Act (2008) is a piece of UK government legislation that outlines the procedure that is followed during employment disputes. It was updated in 2008 after first being brought in in 2002, and altered existing laws to strengthen the guidance given on resolving workplace disputes, minimum wage standards and action against trade unions.

The most important change that this piece of legislation brought about was repealing the Statutory Dispute Resolution Procedures, which many people found too complicated and often raised other legal issues. Two new guides replaced this (the ACAS Code of Practice on Disciplinary and Grievance Procedures and a non-statutory Guide to Discipline and Grievances at Work) which outline the best practices for employers and employees to follow when settling employment disputes.

There are many other pieces of government legislation that affect employment law as much as The Employment Act, including The Equality Act (2010), Health and Safety at Work Act (1974) and the Employment Rights Act (1996).

What Aspects of Employment Are Covered by Law?

There are a huge variety of areas affected by the aspects of employment covered by law, from the way that businesses hire new employees to the allowances that are made for childcare and family emergencies. Below are some of the most important. 


Employment law has a big effect on the way that companies recruit new employees, as it ensures that there are legal requirements in place which prevent discrimination and means employers cannot be prejudice either intentionally or through unconscious bias. The reasons for choosing candidates for a role have to be recorded, and applicants have to be given access to notes on their interviews so that any unlawful discrimination will be highlighted and called out. 

Employment Contracts

The terms and conditions for someone’s employment are usually outlined in a contract and this contract is informed by a range of different employment laws. The most important of these is legislation that ensures an employee is given the full terms of their employment before they actually start the job, meaning that they know exactly what is expected of them and cannot sue their employer because of a lack of information.

Employment law also means that the offer of an employment contract can be subject to references or certain qualifications, which protects employers from hiring people who aren’t the right fit for the company.

Data Protection

Data protection legislation falls under the umbrella of employment law both during the recruitment process and when an individual is working for a company. Businesses must be clear about what they are doing with job applicant and employee data, ensure that this personal information is kept securely, and have a policy in place for how long personal data is kept after someone has left their job.

Working Hours

Employment law dictates how many hours an employee can reasonably be asked to work in certain roles, which affects the hours offered in a contract, how much overtime your employer can request, and means that employees have grounds for suing their employer if asked to work for too long. Health and safety legislation also affects the amount of time employees can be exposed to certain materials or work in certain environments, which comes under employment law as well.

Benefits and Entitlements

Benefits and entitlements such as holidays, bonuses, sick leave and other additional aspects of a job are all affected by aspects of employment law that ensure employees can take time off for things like hospital appointments and that they have certain rights protecting things like paid leave.

Maternity and Paternity Leave

Maternity and paternity leave is protected by official legislation that is grouped with employment law, meaning that any employee who becomes a parent is given paid or additional time off from their job when their child is born. It also means that women who give birth should not be discriminated against for how this may affect their ability to work or the time they have to take off from their job, although some discrimination still does exist.

Health and Safety

The Health and Safety at Work Act (1974) is an example of serious employment law for businesses that holds employers accountable for keeping their staff safe whilst they are in the workplace. Under this legislation, an employer must adhere to relevant health and safety standards depending on the nature of the work their employees undertake, they must respond to any worries or issues that arise regarding workplace safety and means that an employer will be held responsible if someone is hurt at work for a preventable reason.


Discrimination is a key area that many people associate with employment law, as there are many different rights and official processes in place that protect employees from discriminatory behaviour from their employer. Employers are responsible for removing any discrimination or bias from their recruitment processes, the way that promotions are given out, their payroll and the way that they deal with employee complaints of bullying or harassment. Employees have legal rights that mean they can gain compensation if their employer is found to be acting in a discriminatory manner, and ensures that their professional status will not be affected by claims or poor treatment.

How Is Employment Law Enforced?

The majority of UK employment laws are categorised as 'civil law' or 'private law', which means that they tend to only be enforced by one party suing another in a civil court. Whilst there are some regulatory parties that enforce laws around things like health and safety, most employment laws will be applied when an employee or ex-employee uses the court or employment tribunal system to make a claim that their employer owes them compensation for something, or vice versa.

Trade unions also enforce employment law in some cases, or organisations such as HSE, HMRC, the Pensions Regulator or local authorities can sometimes get involved. It can be difficult for an individual to know where to go or whether they can get support when making a claim regarding employment law, as in the majority of cases an employee has to bring their case to an employment tribunal to bring about any kind of action. 


What is a compromise agreement in employment law?

A compromise agreement is now known as a settlement agreement, and refers to the legally binding decision that has been reached by an employee and their employer. This negotiation is usually over a severance payment and means that the employee has agreed not to pursue any potential claims in an employment tribunal.

What is a restrictive covenant in employment law?

‘Restrictive covenant’ is a clause in a services agreement or employment contract that means an ex-employee cannot do certain things for a set period of time after they have left an organisation. This includes stopping ex-employees from taking clients with them away from a business, taking inside knowledge to another organisation or directly competing against the company until a specified amount of time has passed.

What is a break in service in employment law?

A break in service is an aspect of employment that affects continuous employment and refers to a period of time where an individual has been employed without any time out of work. Continuous employment can affect what statutory rights in employment law apply to an individual, so a break in service can affect whether someone is protected by employment rights.


Employment law is a vast area of legislation, official procedures and statutory rights, and the majority of people go about their entire working life without realising how much of their employment experience is dictated and protected by a wide range of laws. As an employer however, it is very important to understand the laws that protect you and the ones you must follow to protect your employees, as well as knowing which official processes need to be followed in the event of an incident at work.

If you’d like to find out more about aspects of employment law, we offer an ‘Employment Law for Line Managers - Managing Change and Performance’ online course and an ‘Employment Law for Line Managers - Recruitment, Pay and Retention’ that go into more detail about specific regulations that affect aspects of employment.