Legislation: Employment law

The idea

Employment law sets the legal rights and duties that shape how businesses recruit, manage and end relationships with workers. It covers contracts and written particulars, pay including the National Minimum Wage and National Living Wage, working time and rest, equality and protection from discrimination, dismissal and redundancy, and trade union rights. For a small firm, this means issuing a contract before work starts, keeping pay records, planning rotas within limits, and applying fair, consistent procedures. A business that ignores these duties risks employment tribunal claims, compensation, fines and reputational damage. Compliance also affects costs, motivation and retention, so managers must balance legal duties with operational needs. Assessment requires applying the law to a scenario, not just naming it.

What earns the marks

• Identifies the main areas covered by employment law: contracts and written particulars, pay, working time, equality and discrimination, dismissal and redundancy, and trade union rights.
• Explains that employers must give employees a written statement of particulars on or before the first day of work, setting out pay, hours, holiday and notice.
• Applies pay rules such as the National Minimum Wage and National Living Wage to a scenario, showing how underpayment creates financial and reputational risk.
• Explains that working time rules limit average weekly hours and provide rest breaks and paid holiday, so rota planning must respect them.
• Applies equality duties to recruitment, promotion and dismissal, recognising that decisions must be based on relevant ability, not protected characteristics.
• Explains that unfair dismissal and redundancy require fair reasons and procedures, including consultation and notice, to avoid tribunal claims.
• Analyses the impact of compliance or non-compliance on business costs, staff motivation, retention and reputation.

Common mistakes and how to put them right

• Treating employment law as only about pay.

  Put it right: It also covers contracts, working time, equality, dismissal, redundancy and trade union rights.

• Assuming all workers have identical rights.

  Put it right: Employees, workers and self-employed contractors have different legal positions, so the business must classify them correctly.

• Thinking a verbal agreement is enough.

  Put it right: Employers must provide a written statement of particulars, and written contracts help both sides.

• Believing dismissal can be instant for any reason.

  Put it right: Fair dismissal requires a fair reason and a fair procedure, otherwise it may be unfair.

Exam tips

• Use the scenario's business context in every application point, naming the worker and the specific right involved.
• When analysing impact, link the legal duty to a consequence such as tribunal compensation, staff turnover or recruitment difficulty.
• For evaluation, weigh compliance costs against benefits such as lower staff turnover and better customer service.
• Use precise terms such as written statement of particulars, National Minimum Wage, unfair dismissal and redundancy rather than vague phrases like 'worker rules'.