Employment Law in the UK: Employment contracts and wages

UK employment law is quite complicated. Here is everything you need to know about employment contracts and wages in the UK. 

UK employment contracts

All employees must sign an employment contract that forms the basis of the employment relationship that binds them to employers.

All employees must sign an employment contract that forms the basis of the employment relationship that binds them to employers. The Employment Rights Act 1996 requires employers to provide most employees with a written statement of the main terms of the contract within two calendar months of the first day of work in the company. Several elements must appear there:

  • names of employers and employees;
  • job title or job description;
  • date when the employment began, place of work and address of employer;
  • amount of pay and interval between payments;
  • hours of work, holiday pay and sick pay entitlements;
  • pension arrangements;
  • notice period;
  • grievance and appeal arrangements;
  • disciplinary rules or dismissal procedures.

Over the years, employees have acquired a wide range of statutory rights, derived from laws and parliamentary regulations that affect the employment relationship. In general, they cannot be deleted or reduced and include several rights:

  • equal pay;
  • participation in trade union activities;
  • be able to return to work after childbirth;
  • to apply for flexible working arrangements and parental leave;
  • not to be discriminated against;
  • not to be unfairly dismissed.

An employment contract is an important document. It is important to read it carefully and in full and to understand all its clauses before signing. To draft it, an employer can call on a lawyer specialized in Employment Law.

Amendment of job contracts

Changes to the employment contract must be made in agreement with the employee and the employer. They can be done orally but always prefer written consent to avoid further disagreements.

Leaving your job

If an employer terminates your employment contract, he must give you minimum notice. Likewise, if you are the one who wants to quit your job, you must give your employer minimum notice. The length of notice depends on the length of your employment. If the employer does not comply with the notice requirement, the employee can take legal action for unfair dismissal.

When the employee leaves his job without respecting the required notice period, the employer can withhold his wages or claim damages

In the case of dismissal for gross negligence, no notice is required.

If you feel that you have been unfairly dismissed, an ACAS helpline (08457 474747) is available to advise you. ACAS acts as an intermediary between employers and employees.

If you decide to file a complaint, be aware that formal complaints of unfair dismissal must be made within three months of the end of employment.

Remuneration and wage

There is a statutory minimum wage in the UK which governs workers' remuneration. The minimum wage for each age group is GBP 3.57 for 16- to 17-year-olds, GBP 4.83 (‘development rate’) for 18- to 21-year-olds and GBP 5.80 for over 22s. These rates change every year on 1 October. 

You will be paid weekly or monthly, depending on what is written on your employment contract. You will receive a pay slip everytime. Most employers will arrange for your pay to be sent directly to your bank account.

Employers are legally allowed to make deductions from your wages for Income Tax, Pay as You Earn (PAYE) and National Insurance contributions. All other deductions made such as contributions to pension schemes must be agreed with you first.

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