Over 15 million people across the UK work for small and medium sized businesses.
Regardless of whether you employ one person for seasonal work or fifty people on different contracts, if you are running a small business you will need to consider the law around employment.
Employment law basics
As an employer you have legal responsibilities towards anyone that works for your business. The people that work for you have rights under different laws that you need to be aware of.
Times when you may need information on employment law include:
- starting a new business where you will be employing people
- closing or selling a business with existing employees
- changing the structure of your business in ways that may impact existing employees
- changing your business premises
- when your business is expanding and you need to take on new employees
- when you need to replace employees who have left the business
- considering redundancies
- operating in industries with health and safety requirements, like construction or chemical manufacturing
- handling complaints or claims from employees
- considering disciplinary action against an employee
Employment issues and the law
Many areas of employment law apply to small businesses. Here are resources about the most common employment issues.
Employment law and regulations – Government guide on general employment.
Hiring employees: recruitment guide – A guide on how to go about hiring your first employee and your legal obligations.
A guide to employment contracts – Government guide to contracts between employers and employees. This includes information about terms, changes to existing contracts and collective agreements which involve trade unions.
Contracts of employment and working hours – Government A-Z covering issues with employment contracts.
Template employment statement – A Government template that shows what all employees are entitled to receive within 2 months of starting work.
See also 'Zero hours contracts'
Apprentice/ work experience
Apprentices’ rights – Chartered Institute of Professional Development (CIPD) guide to the legal arrangements that apply to apprentices.
Work experience: legal requirements – A Health and Safety Executive guide covering the health and safety obligations when taking on work experience placements.
Employing people from overseas
Rules around overseas employees – HMRC on checking someone’s legal right to work in the UK and the tax considerations.
Zero hours contracts
A guide to zero hours contracts – Advisory, Conciliation and Arbitration Service (ACAS), if you are considering using zero hours contracts.
Employer’s liability insurance
The law on employers' liability insurance – Government information on the legal requirement to have employers’ liability insurance.
Employers’ liability insurance – the Association of British Insurers guide to this type of insurance.
Get insurance for your business – Health and Safety Executive information on employers’ liability insurance.
Staff benefits and rights
Annual leave entitlements
Legal requirements for annual leave – Government facts on the leave you must provide your employees.
Paying your employees
Employers pay obligations – Advisory, Conciliation and Arbitration Service’s (ACAS) guide to your obligations when paying your employees.
Tax and employees
See the Tax factsheet for information on this topic.
Changing employment contracts
Varying a contract of employment – Advisory, Conciliation and Arbitration Service (ACAS) guide to changing employment contracts.
Employee health and safety
Employers’ responsibilities – Health and Safety Executive on your responsibilities to your employees.
Health and safety ABC: an easy guide – Health and Safety Executive tool to help you understand health and safety requirements.
Health & Safety made simple – Health and Safety Executive guide to managing health and safety basics.
Discrimination and equality
The law on equality – Government overview to your legal obligations under the Equality Act 2010.
The Equality Act: guidance for small businesses – The Equality & Human Rights Commission advice on meeting your duties.
Equality monitoring – Government guide to employers’ responsibilities when it comes to recording and holding personal information about your staff.
Shared parental leave
The Shared Parental Leave regulations – Government guide to the requirements you need to consider.
Good practice guide – Advisory, Conciliation and Arbitration Service (ACAS) information aimed at both employers and employees.
Pension rights for your employees
Workplace pensions: employers’ responsibilities – Government guide to the legal requirements around workplace pensions.
Selling your business
Employee protections when selling or taking over a business – Government guide to the Transfer of Undertakings (Protection of Employment) regulations.
Employment disputes and other legal issues
Handling employment disputes – Advisory, Conciliation and Arbitration Service guide to disputes and how to handle them.
Being taken to an employment tribunal – Government guide to the employment tribunal process from an employer’s perspective, including the grounds on which an employee can take you to a tribunal.
Disciplinary action and dismissing staff
Taking disciplinary action against an employee – Government guide to the rules and procedures for disciplinary action.
Dismissing staff – Government guide to fairly and legally ending an employees contract.
Disciplinary and grievance procedures – Advisory, Conciliation and Arbitration Service’s (ACAS) covering both disciplinary and grievance procedures.
Making staff redundant
Making staff redundant – Government guide to the processes and employees’ rights.
Employment law advisers
As a small business owner, you may decide to take employment law advice. There are many different types of people who can give this advice. These include:
- Chartered legal executives
- Specialist bodies like the Chartered Institute of Personnel and Development (CIPD) and the Advisory, Conciliation and Arbitration Service (ACAS)
- Business advisers
For a list of questions to ask a legal services provider before you take legal advice, visit our provider checklist.
Last reviewed: 8 January 2019