Employment law in the UK: How it is made

Before a bill is presented to parliament, ministers usually put forward their proposals for consultation and contributions are invited from any interested party. Sometimes ministers commission a small team of business specialists or experts to investigate an area of employment policy and produce a report which makes recommendations. The subsequent consultation process determines whether or not the recommendations will become law. 

Governments then present their proposals formally to parliament.  

• 'White Papers' contain broad statements of government policy and their rationale.  
• 'Green Papers' set out specific proposals and different policy options about which ministers intend to consult.  

Historically these were printed on green or white sheets of paper. They are now published in the form of glossy brochures. 

After consulting on policy options, ministers put together a draft bill. These are written by specialist legal teams based in the House of Commons. Sometimes, but not always, further consultation takes place at this stage before a final version of the bill is prepared for presentation to parliament. 

Role of the King’s Speech 

Each year the government sets out its legislative programme for the year ahead in the King's Speech. The King reads this out from the throne in the House of Lords at the State Opening of Parliament (usually held on the first day of a new Parliamentary session, or after a general election), but the words are those of government ministers, not those of the King. The speech essentially consists of a list of the bills that the government intends to bring forward in the following year.  

There are a number of stages that a bill has to pass through in parliament before it becomes an act. Government bills sometimes start their journey through the legislative process in the House of Commons and sometimes in the House of Lords. In any event the bill can only become an act after it has been approved following votes in both chambers. This process normally takes several months to complete.  

In a ‘standard process’, once the consultation phase is complete, and a final draft of the bill has been agreed by ministers, it is then presented to parliament by the relevant Secretary of State or one of their junior ministers.

A series of numbered clauses then follow, setting out the contents of the legislation and sometimes details of the date it will come into force (often secondary legislation is required at a later point, to specify a commencement date). After the clauses comes a series of schedules, containing the detailed measures that the government is planning to introduce. These spell out which aspects of the law are to be repealed or amended by the new legislation and how certain terms are to be interpreted. Explanatory notes accompany all bills as they pass through parliament.

This takes just a few minutes. The bill is briefly presented to either of the Houses and a date is also set for the second reading. No debate occurs and no vote is taken. 

This is the first time that the bill is debated and voted on in parliament. The focus at this stage is on its major principles rather than the detailed measures it contains. The Secretary of State or one of the junior ministers in the sponsoring government department will open the debate, setting out its purpose and how the measures it includes will meet that purpose. The principal opposition spokesperson then answers, stating in what respects their party plans to support or oppose the different parts of the bill. Other MPs or Lords then take turns to contribute to the debate. Speeches are often limited to eight minutes or so, and members often interrupt one another to dispute points and ask each other questions. 

Amendments can be proposed at this stage but are rarely debated in any detail and are almost always voted down by the government in government-sponsored bills.

Assuming that the bill has passed the second reading, it then has to be scrutinised in detail, clause by clause. This occurs at the committee stage. At the committee stage amendments are proposed as well as new clauses. These are debated in groups and voted on. 

For most government bills a standing committee is appointed, consisting of between 15 and 45 members chosen to reflect the balance of party membership across the house. This means that MPs from the governing party or parties have a majority of the seats on the committee. In the House of Lords, owing to the presence of many cross-benchers who do not have a party affiliation, it is rare for the government to be able to rely on majority support for its bills.  

The bill, now often amended, returns to be debated again and voted on by the whole House. More amendments can be proposed, even by MPs who were not on the committee, and debated at this point, while an opportunity is provided for those who oppose the bill to make their views known. Bills are often amended following a vote at the report stage, particularly when ministers accept amendments proposed by members.

Third reading debates tend to be short. This is when the bill in its final form is presented and voted upon by the whole House. No further amendments can be made at this stage in the House of Commons, although it is possible to do so in the House of Lords. 

Once the bill has been passed by one of the two Houses of Parliament it then passes on to the other. The same process is then repeated. 

From time to time a bill is passed by one House, but not by the other. More often there are disagreements about clauses, or a refusal by one House to accept amendments that have been passed by the other House. 

In the case of government-sponsored bills, this is only problematic when the House of Lords rejects a bill that has the support of the majority of members of the House of Commons or when the House of Lords proposes amendments which the House of Commons (that is the government) will not accept. 

There is a long-standing convention that the House of Lords will not, as a matter of principle, vote down measures which formed a part of the manifesto issued by the governing party at a general election. The House of Lords will propose amendments and will often ask the House of Commons effectively to reconsider parts of a bill, but ultimately the view prevails that the elected House must be allowed to get its policies through. 

Where a measure has not formed part of the governing party's manifesto, the House of Lords does from time-to-time vote down government bills. In such cases ministers can, if they wish to, make use of the Parliament Acts of 1911 and 1949. These acts provide that a bill may become law if it is passed by the House of Commons twice in two successive sessions, provided a full year has elapsed between its second reading in the House of Commons and its final passing. This means that an elected government ultimately gets its way, even if its measures are rejected by the House of Lords. The power of the House of Lords is, therefore, limited to delaying legislation for a year or two. 

In practice the Parliament Acts are rarely used. The two Houses generally reach agreement about new bills without there being a need for the House of Commons to use its power to overrule a vote in the House of Lords. What is much more common is the development of a ‘ping-pong’ situation between the two Houses. This happens when they disagree about some aspects of a bill and have voted different ways on it. The bill cannot become law until both Houses pass it in its final form. To achieve a settlement, the bill bounces back and forth between the two houses, amendments being made in the process.  

Before the bill can become an act and be enacted, it has to receive royal assent. In other words, the King must give it his formal approval. In practice this is now a formality. No sovereign has refused to give assent to a bill that has been passed by both Houses of Parliament since 1708. 

Clauses in an act set out at which date it is due to come into force, becomes law and can be enforced. 

Employment legislation has mostly come into force on one of two set dates each year in early April and early October, with the aim of giving organisations notice of a law change and time to prepare for it. For example: 

• Although the Equality Act 2010 was passed in April 2010, it became operational in stages: the core provisions came into force on 1 October 2010, while more provisions came into force on 6 April 2011.  
• In April 2017, gender pay gap reporting became mandatory for certain employers with over 250 employees but with a first specific reporting date in 2018 so that employers had plenty of time to prepare. 
• It is planned that future unfair dismissal regulations will be issued under the terms of the Employment Rights Bill. Track progress on this bill here. 

Statutory instruments are a form of delegated legislation or ‘secondary’ legislation. These are issued by ministers using powers delegated to them under acts of parliament. They take the form of sets of regulations and orders. These typically contain a lot more detailed legislation than is found in the relevant parts of their 'parent acts'. 

A great deal of UK law is implemented through delegated legislation of this kind. The government has made it clear that most of the major elements that make up the Employment Rights Bill will in fact be set out later in detailed sets of regulations issued in the form of delegated legislation.   

In most cases ministers simply issue sets of regulations and wait for 40 days. If no MP demands a debate in this time, the regulations simply pass into law. 

In many countries parliament is the only source of law, but in the UK and some other countries which follow a similar legal tradition, the judiciary interpret the law and they also make it in some circumstances. The UK has long-established 'common laws' dating back centuries, none of which have ever been considered by an MP or proposed by a government. Common law is entirely judge-made. 

Common law evolves over time as cases come before the courts and are appealed through a hierarchy of courts. The presence of this hierarchy is highly significant in the UK's judicial system because courts that are lower down in the hierarchy are obliged to apply any precedents that have been established by higher courts. In practice, this means that judges in the higher courts make the law.  

The same principle of precedent and law-making also applies when the courts are asked to interpret the precise, practical meaning of clauses in statutes that have been passed by parliament. How legislation should be interpreted is for judges to decide and once a higher court rules on a point of principle, all the lower courts must apply that principle when any similar case comes before them. 

This happens all the time in employment law, which follows principles from the law of contract which is part of the common law and is judge-made. 

According to common law, judges can establish what are called 'implied terms' or sometimes 'common law duties' in every contract of employment in the UK. These sometimes place a duty on employers and sometimes on employees. So, for example, the most significant development in this field is the common law duty 'to maintain a relationship of mutual trust and confidence' which applies to both employers and employees. Although the duty is a mutual one, most claims based on breach of trust and confidence are brought by employees. The breach is based on showing that the employer’s conduct is likely to destroy, or seriously damage trust, and confidence between the parties.  

Parliament’s ability to override common law 

Unusually, the UK does not have a written constitution, although the powers of the Scottish Parliament and the Northern Ireland and Welsh assemblies are clearly set out in writing. The absence of a written constitution does not mean, however, that there are not very well-established constitutional principles. 

The most important of these is that parliament is sovereign. This means that, if parliament saw fit to do so, it could at any time override anything it disapproved of in common law by passing a statute. Judges make law in the way described above, but they cannot ever overrule or make decisions that in any way contradict the will of parliament as set out in statutes. It is rare for parliament to exercise this right, but it does happen from time to time. An example in the field of employment was the 2013 change to employees and former employees civil rights to bring personal injury claims for accidents at work, requiring them to establish the employer’s negligence, instead of just 'breach of health and safety workplace regulations'.

In Great Britain, most employment law is categorised as 'civil law' or 'private law', meaning that it’s enforced because of one party (the claimant) suing another (the respondent) either for compensation or some other remedy. The claimant is normally an employee or worker, a former employee or worker, or an unsuccessful job applicant. The claimant uses the court and employment tribunal system to allege that the respondent (their current or former employer) has caused them some kind of detriment and has done so in contravention of the law. 

Employment cases start in one of three courts: 

• the employment tribunal 
• the County Court 
• the High Court. 

Which court a case is taken depends, in part, on the legal matter to be decided and partly on the level of compensation that the claimant is seeking. 

Generally, matters that relate to an alleged breach of an employment statute (that is an act of parliament or a set of regulations issued under an act of parliament) are heard in an employment tribunal. However some common law claims such as smaller contractual claims for breach of employment contracts can be brought in the tribunal- see below. Matters relating to alleged breaches of the common law, such as a breach of contract (for example matters involving alleged breaches of restrictive covenants) or an act of negligence, can go to the County Court. Generally, breach of contract claims should be worth over £25,000 to proceed in the civil courts. The High Court also hears common law claims, but normally only does so when the level of damages being sought by the claimant is in excess of £50,000. 

There are, however, some significant exceptions to these general rules. Employment tribunals can, for example, consider claims that relate to breaches of contract when the compensation being sought is less than £25,000. 

By contrast, there are some statutory matters that can be considered in the County Court or in the High Court, for example equal pay claims which are a contractual claim as well as a statutory right. The time limit for breach of contract claims brought in the civil courts is six years, compared to the shorter limits in the tribunal.

Therefore an equal pay claim, normally dealt with by the employment tribunal, may be brought in the civil courts, especially if the employee has missed the tribunal's six-month deadline, providing an alternative potential avenue open to them. 

Employment tribunals are the most common way in which an employment law claim is brought.  

In the 1960s to 1998 they were called industrial tribunals, until their title changed. Since 2007, they have been presided over by employment judges. In Northern Ireland, the term industrial tribunal continues to be used. 

For a tribunal to consider a claim, it is likely that the following process must be followed in advance: 

• Attempt at early conciliation via Acas
• Bringing of a claim via an ET1 form (with the defendant then needing to log their reply via an ET3 form)  

The remit of employment tribunals has grown steadily over time. Since 2017, employment tribunal decisions have been published online.

Tribunals can now hear over 80 different types of claims. The claims, however, have strict time limits which apply to them*. Common examples are provided below: 

_{*Note that an extension of the time limit to bring tribunal claims is proposed under the Employment Rights Bill. Progress on this matter can be monitored on the tracker.} 

Tribunals: Judges and panels

It used to be the norm for employment tribunal cases to be heard by panels of three people, consisting of the employment judge (an experienced lawyer) and two lay members. This remains the case in some areas of jurisdiction, but it is now the norm for judges to hear cases 'sitting alone', including unfair dismissal and working time cases. 

Lay members are experienced practitioners who can bring their knowledge of practical management to the proceedings. One is appointed from the 'employers' list' and is often an experienced people professional, the other comes from the 'employees' list' and is often someone with extensive experience as a trade union representative. When a three-person panel hears a claim (which now only happens in more complex cases), their decision is almost always unanimous, but occasionally a majority decision is reached. It would be unusual for the two lay panel members to out-vote the employment judge, but it can theoretically happen. 

Tribunals were intended to be a more informal alternative to the court system. It was envisaged that the parties to a dispute would represent themselves, or that trade union representatives would typically represent claimants. But as employment law has become more complex, increasingly the parties are represented by lawyers. The result has been an increasing formalisation of many proceedings, as well as an increase in the associated costs. 

That said, it’s still the case that many claimants either represent themselves or bring a non-professional representative along with them. In such cases, employment judges take great care to ensure fairness, avoiding the use of obscure legal language and taking a more active role in the questioning of witnesses. 

The burden of proof can shift in employment claims. For example, when an unfair dismissal case comes before a tribunal, it is for the employee to initially prove that they have the right to pursue the claim, then it is for the employer to prove that the reason for the dismissal was fair and that they acted reasonably in dismissing the employee. In discrimination cases, once a claimant has satisfied the tribunal that they have a 'prima facie case' by presenting facts from which it can be assumed that an unlawful act of discrimination has occurred, the burden of proof switches to the employer to show it did not discriminate. The overall standard of proof is 'on the balance of probabilities' meaning that the employee or employer must prove their case is more likely than not to be true with an over 50% chance.

Appeals from employment tribunals are taken to the Employment Appeals Tribunal (EAT) and then to the Court of Appeal, or in Scotland, to the Court of Session. Appeals from the Northern Ireland industrial tribunals go directly to the Court of Appeal.  

Tribunals: Costs, fees and awards 

In most cases, claimants can bring tribunal proceedings without paying any fees and without risking having to pay their opponent's costs if they lose the case. Fees were under consideration but discounted by David Lammy in October 2025.   This is very different to the established situation in most other types of civil court where it’s usual for costs to be awarded against the losing side. 

The major exception occurs when one of the parties has a very weak case which is judged at a pre-hearing review to have little prospect of success. In such circumstances, the employment judge can require this party to pay a deposit of up to £1,000 before allowing the claim to continue. The deposit is only refundable if the claim is: 

• withdrawn ahead of a full hearing, or 

• ultimately won, or 

• ultimately lost, but the employment judge decided that the losing party did not persist with the case unreasonably. 

If the deposit remains unpaid, the relevant part of the claim will be struck out. If the deposit is paid and the employee's claim fails, the employee will be considered to have acted unreasonably in bringing the case and will be at risk of costs being awarded. 

Cost orders, capped at £20,000, are only made very rarely by employment tribunals at present. The most common situations in which the losing side is required to pay the costs of the winning side is when it (or its representative) is judged either to have acted 'vexatiously, abusively, disruptively or otherwise unreasonably', or to have knowingly pursued a 'misconceived' case (that is one that has no chance of succeeding). Cost orders can also be made when a party fails to comply with an order of the tribunal or unreasonably causes a hearing to be adjourned or postponed. This cap of £20,000.00 is a discretion when there is no detailed assessment (or if the ability to pay is limited). Rarely, costs may be over £20,000, but a detailed assessment is required.

Employment judges also have the right to levy fines of up to £20,000 on employers that have been found to have breached the claimant's employment rights, and the breach has aggravating features. There is limited guidance on what may be an aggravating feature, but a tribunal may be more likely to find that an employer's behaviour deserves a fine where the action was deliberate or malicious and the organisation has a dedicated HR team. The financial penalty is payable to the government and is in addition to any compensation awarded to the employee. There is a reduction if the penalty is paid within 21 days of the notice imposing the penalty. 

Some employment law claims go to civil courts. These courts operate under different rules to tribunals, particularly with respect to costs and procedure.

The standard of proof in civil courts and tribunals is 'on the balance of probabilities', making cases easier to prove than when the standard of proof is 'beyond reasonable doubt', as in criminal cases. 

The civil court system is hierarchical which enables a losing party to appeal their case to a higher court when there are grounds for arguing that a lower court has either misapplied the law or misinterpreted it in some way. Importantly, when a higher court makes a ruling on a point of legal principle, that then becomes a binding precedent which all the lower courts then must observe when similar cases are subsequently brought before them.  

Unlike the criminal courts, except when a decision is either perverse or biased, it’s only possible to appeal a case up to a higher civil court on a question of law. Questions of fact cannot form the basis of appeals. So, once a court has made its mind up about which party it thinks is telling the truth about events, that decision stands and can't be appealed. Only when there is a question mark over the way the court has interpreted or applied the law, can an appeal proceed. 

The focus of this page is the operation of the civil court system when handling employment cases. However, it’s important to remember that in one or two areas of employment law, cases are brought before the criminal courts. This can happen, for example, when an employer is accused of failing to comply with health and safety regulations, or when it’s alleged that an employer has breached immigration regulations by unlawfully employing someone. Such matters are usually decided in the magistrates or crown court. In the crown court the matter is heard by a judge and jury. 

In criminal cases the burden of proof nearly always lies entirely with the prosecution, the standard of proof being 'beyond reasonable doubt'. In other words, a criminal court should not convict unless it is certain that the defendant is guilty of the offence of which they are accused. Criminal cases are brought on the instructions of state agencies such as the Health and Safety Executive or the Crown Prosecution Service. If there is a guilty verdict, some kind of punishment is exacted on behalf of the State which is usually a fine when a corporation is the defendant, although company directors can in rare circumstances be imprisoned for serious criminal offences. 

When a dispute relates to the common law, such as in an alleged breach of contract, or to negligence or defamation, it will be heard either in the county court or in the High Court. Importantly, these categories include personal injury claims of the kind that people bring against their employers when they suffer work-related injuries or mental health issues. 

The High Court will only hear cases in which more than £15,000 in damages is being sought (£50,000 in the case of personal injury cases). In either court, however, cases are heard by judges sitting alone, except in very rare circumstances. 

There is a single County Court for England and Wales, but it sits across approximately 170 different courtrooms, and 27 centres at which High Court claims are heard. In these courts the parties can represent themselves or be represented by a lawyer. In the High Court, legal representation will be by barristers or the relatively small number of solicitors who have applied successfully to do this. This means that litigation can be very expensive, particularly for the losing side against whom an order to pay their opponent's legal costs is usually made. An individual can appear in the High Court as a 'litigant in person', when they are not being represented by a barrister or solicitor.

Appeals from county courts or the High Court are taken directly to the Court of Appeal, or in Scotland, to the Court of Session. 

The Employment Appeal Tribunal (EAT) sits in London and in Edinburgh where it deals with appeals from employment tribunals. 

The losing party in an employment tribunal case has 42 days to appeal the decision should they wish to, setting out in writing the grounds for appeal. 

While the number of appeals to the EAT is relatively small, they are very important. This is because EAT judgments set out how the law should be interpreted and applied in the future by all employment tribunals. 

EAT judges usually sit alone unless there is a need for lay members to be present. 

When an appeal is heard by the EAT there are four possible outcomes: 

• The appeal may be dismissed. 
• The appeal may be allowed. 
• The appeal may be allowed and remitted back to the original employment tribunal panel to make a final decision, or 
• The appeal may be allowed and remitted to a differently constituted employment tribunal panel to rehear the evidence and make a final decision. 

Cases often need to be remitted back to the employment tribunal so that a final judgment can be made because it’s the EAT's primary job to make decisions about how the law should be interpreted. How a case should be decided based on particular facts, or what the appropriate level of compensation is, are matters for employment tribunals to determine. 

All EAT decisions are published online. Decisions that have the most legal significance are reported in law journals such as the Industrial Relations Law Reports (IRLR) or Industrial Cases Reports (ICR). The British and Irish Legal Information Institute (Bailii) law report website is free to use. 

EAT rulings can be appealed to the Court of Appeal or, in Scotland, to the Court of Session. This happens relatively rarely because once litigation reaches this level in the court hierarchy, the losing side is usually required to pay the winning side's costs. Because senior barristers are typically employed to argue the case, costs can be extensive. 

Nonetheless, the Court of Appeal and the Court of Session are typically called upon to judge a number of employment related cases each year and they do from time to time overturn a judgment of the EAT and sometimes reinstate an original employment tribunal decision. 

Court of Appeal cases are heard in London by panels of three Lords Justices of Appeal, sometimes including the Master of the Rolls (the most senior Appeal Court judge). In the Court of Session in Edinburgh panels of three or five judges hear cases. 

A further appeal to the Supreme Court is only possible where a point of law that has 'general public importance' is disputed. In other words, the principles must be sufficiently significant to have implications for many employers and employees and not just the parties to the case. The number of employment-related cases that are heard by the Supreme Court each year fluctuates, but it is rarely more than six or seven. The Supreme Court has the final say in any matter which exclusively concerns UK law.