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Hire in The United Kingdom

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Last updated at June 16, 2022
A beautiful view of United Kingdom

Currency

British Pound (GBP)

Capital

London

Time Zone

GMT

Key Country Facts

Introduction

The United Kingdom of Great Britain and Northern Ireland (commonly known as the UK) consists of four countries; England, Scotland, Wales and Northern Ireland. In total there are approximately 64 million inhabitants, with 53 million of those in England which is therefore one of the most densely populated countries in the world.

Area

The island of Great Britain lies off the north west coast of the European mainland. Northern Ireland lies on the north eastern corner of the island of Ireland and it shares a border with the Republic of Ireland.

Climate

The UK has a temperate climate, with generally cool temperatures. The prevailing wind is from the southwest and bears frequent spells of mild and wet weather from the Atlantic Ocean mostly affecting the western regions. Similarly, Atlantic currents, warmed by the Gulf Stream, bring mild winters.

Culture

As a historical result of the British Empire, British influence can be observed in the language, culture and legal systems of many of its former colonies including Australia, New Zealand, India, Pakistan, Ireland, Canada, the United States and the Commonwealth countries. Inward migration from these and many other countries has been a positive contributor to modern British culture. The substantial cultural influence of the UK and its language has led it to a global influence far in excess of its geographical size.

Religion

Various forms of Christianity dominate the religious environment in the UK. Regular church attendance has however decreased considerably in the last decades. In a recent survey 53% of respondents indicated “no religion”. Islam and Hinduism make up the majority of the approximately 7% who identified with non-Christian religions.

Official Language

English is the official language of the UK. Over 90% of UK inhabitants are thought to be English monolingual. Other spoken languages are typically those brought to the UK as a result of immigration; historically South Asian languages such as Hindi, Punjabi and Gujarati. More recently, Polish has become the second most spoken language.

United Kingdom HR at a Glance

Employment Law

UK employment law is derived from three main sources:

  • Common law (custom and practice and court decisions)
  • UK employment legislation which has supplemented the common law rules
  • European law

Employment Contract

The employee’s agreement to work for the employer and the employer’s agreement to pay the employee for the work forms a contract. However, we would always recommend a compliant written contract. Therefore, there is always a contract between an employee and employer. If there is nothing in writing, a contract still exists.

The following details must all be included in the contract or an accompanying principal statement of written terms:

  • Employer’s name and the employee name
  • Start date (the day the employee or worker starts work)
  • Date that ‘continuous employment’ (working for the same employer without a significant break) started for an employee
  • Job title, or a brief description of the job
  • Employer’s address and the places or addresses where the employee will work
  • Pay, including how often and when (for example, £1,000 per month, paid on the last friday of the calendar month)
  • Working hours, including which days the employee or worker must work and if and how their hours or days can change
  • Holiday and holiday pay, including an explanation of how its calculated if the employee or worker leaves
  • Amount of sick leave and pay (if this information is not included in the document, the employer must state where to find it)
  • Any other paid leave (if this information is not included in the document, the employer must state where to find it)
  • Any other benefits, including non-contractual benefits such as childcare vouchers or company car schemes
  • The notice period either side must give when employment ends
  • How long the job is expected to last (if it’s temporary or fixed term)
  • Any probation period, including its conditions and how long it is
  • If the employee will work abroad, and any terms that apply
  • Training that must be completed by the employee or worker, including training the employer does not pay for.

Contract Terms

The terms of the employment contract may not provide for lesser conditions than any minimum legal entitlements established in employment legislation.

Probation Period / Trial Period

Employment contracts often provide that the employee will undergo a trial or probationary period at the start of their employment, during which the employer has the opportunity to assess the employee’s suitability for the position. Whilst the exact terms of the trial period will be governed by the employment contract, it will typically last three months. The maximum period (including any extension) is six months. During the probationary period, the employee may not be entitled to certain benefits.

Working Hours

Workers’ hours of work are regulated by the Working Time Regulations 1998 (“WTR”). Workers may not work, on average, for more than 48 hours per week (normally calculated over a 17-week reference period). In the UK employers can ask workers to consent, in writing, to opt-out of the 48- hour weekly working limit. However, workers must have the right to cancel their opt-out by up to three months’ notice at any time. The WTR also provides the right to daily, weekly and in-work rest periods. A typical standard white-collar working week will be 37.5 hours.

Overtime

If employers may want to require their employees to work longer than their normal working hours, they should ensure that the employment contract provides for this with an overtime clause. This clause should state whether or not the overtime is paid. Typically overtime rates are x1.5 for weekday and x2 for weekend/public holiday.

Timesheets

In 2019, the European Court of Justice stated that companies must set up a system to record the working time of their employees. Thus, employers are obliged to implement an objective, reliable and accessible system that allows recording of the daily workday performed by each employee.

Bonus

Bonus schemes are common and may be either guaranteed under contract or discretionary. Many schemes are a mixture of both, which means that while you have the right to be considered for a bonus, the employer has the final say as to whether to pay out or not. However, employers should take care when exercising the discretionary element of any bonus.

Termination

Employees in the UK are entitled to a period of notice to bring the contract to an end unless they have committed an act of gross misconduct. If the employee has not committed an act of gross misconduct the contract will continue until it is brought to an end in accordance with its terms (normally either by giving the required notice or making a payment in lieu of notice if this is provided for in the contract).

For employees without unfair dismissal rights (less than two years’ service) employers can dismiss without a fair reason so long as they do not dismiss on the basis of a discriminatory or automatically unfair reason and they comply with the terms of the contract of employment. It is automatically unfair to dismiss an employee for a wide variety of reasons. This includes dismissing an employee because they have ”blown the whistle” about corporate malpractice, taken advantage of statutory rights to maternity, paternity or parental leave or exercised their right to join or participate in trade union activity (among other things).

Once an employee has two years’ service, they will have rights against unfair dismissal rights and the employer may only dismiss for one of five prescribed legitimate and fair reasons. A fair procedure must also be followed, or the dismissal will be unfair.

Legitimate (fair) reasons to dismiss an employee:

  • misconduct;
  • capability or qualifications;
  • redundancy;
  • application of a statutory restriction (for example the employee no longer has a right to work in the UK); and
  • for “some other substantial reason” (“SOSR”), often for example because an employee has refused to agree to a variation in terms and conditions of employment. The Courts apply a narrow interpretation as to whether an employer’s reason constitutes “SOSR”.

Notice Period

Employees have a statutory right to receive a minimum period of notice from employers once they have been employed for one month, as follows:

  • At least one week’s notice if employed between one month and 2 years.
  • One week’s notice for each year of employment between 2 and up to a maximum 12 years.

Redundancy / Severance Pay

Except for redundancy dismissals (where an eligible employee will be entitled to a statutory redundancy payment) there is no statutory entitlement to a severance payment as such. An employee is entitled to notice, and it is common for employees to be paid a sum in lieu of notice, usually equal to the value of pay over the notice period.

Post-Termination Restraints / Restrictive Covenants

A restrictive covenant is a clause, which is intended to protect an employer’s business by restricting the activities of its employees, generally after the employment has terminated.

Types of Restrictive Covenants:

  • Non-compete – This restricts an employee’s ability to work for certain competitors or carry on a competing business for a certain period of time after termination.
  • Non-solicitation of customers – This prohibits an employee from soliciting certain clients or customers of their former employer for a certain period of time after termination.
  • Non-solicitation of employees – This prohibits an employee from soliciting certain employees of their former employer for a certain period of time after termination.
  • Non-dealing – This prohibits an employee from doing business with certain clients or customers of their former employer for a certain period of time after termination.

Restrictive covenants are not automatically enforceable simply because they have been incorporated into a contract of employment. In fact, there is a presumption that restrictive covenants are automatically void for being in restraint of trade and contrary to public policy, unless the employer can show that:

  • it has a legitimate proprietary interest that it is appropriate to protect, and
  • the protection sought is no more than reasonable having regard to the interests of the parties and the public interest.

Fixed Term Contracts

Fixed Workers may be contracted to work for a fixed period only or to perform a particular task with the contract terminating at the end of this period or on the completion of the task. Examples are those who are employed specifically to cover for maternity, parental or paternity leave; employees who do seasonal or casual work such as agricultural workers and shop assistants during busy periods; employees hired to cover unusual peaks in demand as in the tourist industry; and employees whose contracts will end on the completion of a specific task such as installing a computer system. There is no requirement for fixed-term contracts to specify the reason why it is a fixed-term, although a job title should be included in the contract to comply with the employer’s statutory requirements on the written statement of particulars of employment.

The regulations say that where an employee has been continuously employed on successive fixed-term contracts for four years or more (from 10 July 2002), he/she should automatically receive permanent status.

Tax and Social Security

Personal Income Tax (PIT)

Income tax in the UK is calculated by applying a progressive tax rate to taxable income as follows:

Band Taxable Income (GBP) Tax Rate (%)
Personal Allowance Up to 12,570 0.0
Basic Rate 12,571 – 37,700 20.0
Higher Rate 37,701 – 150,000 40.0
Additional Rate Over 150,000 45.0

(NB: Rates valid for England and Wales. The Scottish government set its own rates which are broadly similar)

Employers are obliged to deduct and make tax payments (due from salary income) to the tax authorities on the employees’ behalf.

Some (non-salary) income is exempt from income tax, including:

  • Interest and income from many savings and investments, the first £1,000 earned from property rental, the first £30,000 of payments which are compensation for loss of job, most welfare benefits.

Social Security

  Employee NI Contributions (Class 1) Employer NI Contributions
NICS rates for 2022/23 13.25% 15.05%
Salary Threshold (£)   9,100/year

The employer is obligated to make the national Insurance contributions and income tax payments through the PAYE system.

*The above rates serve as a broad guideline. Actual rates charged will differ.

Apprentices Levy

The apprenticeship levy is a type of tax to support companies in offering apprenticeships, by helping them with developing apprenticeship programmes and providing training. It is a tax paid by employers and stored in a fund which can be accessed to fund apprenticeship training costs.

Employers with an annual payroll of more than £3 million have to contribute, which is 0.5% of total payroll paid monthly via PAYE.

Employees

Salary Payment

Salary payments are normally paid monthly on the last day of the month or a few days before that.

Payslip

By law, employers must provide their employees with a payslip. The payslip must, at a minimum, show:

  • Earnings before and after any deductions
  • The amount of any deductions that may change each time you’re paid, e.g. Tax and national insurance
  • The number of hours you worked, if your pay varies depending on time worked.

Employers must also explain any deductions fixed in amount, for example repayment of a season ticket loan. They can choose to do this either on a payslip, or in a separate written statement.

Annual Leave

  • Employees are entitled to a statutory minimum of 5.6 weeks paid annual leave per annum. This holiday entitlement can include public holidays, of which there are currently eight in England and Wales. (20 working days + 8 public holidays.) In practice employers often offer more than the statutory minimum of 20 days, 25 or 30 days being quite common.
  • The statutory minimum (20) days must be used in the holiday year otherwise they will be lost except under exceptional circumstances such as long-term sickness, pregnancy/maternity leave etc. Other unused contractual paid leave may be carried over but only with the employer’s agreement and approval.

Sick Leave

  • Employees who are sick for at least four consecutive days (including weekends and public holidays), subject to certain conditions, are entitled to receive statutory sick pay (“SSP”). The standard weekly rate of SSP is currently £95.85 as of April 2020.
  • Many employers offer enhanced rates of sick pay (company sick pay), typically paying full salary for the first 2/3 weeks at least.

Nursing Care Leave

Unpaid Parental Leave – Eligible employees have the right to 18 weeks’ unpaid parental leave to care for a child under eighteen. An employee can normally take only four weeks’ parental leave in any one leave year. For short periods of leave due to child sickness many employers may have formal or informal arrangements for paid leave.

Compassionate & Bereavement Leave

  • An employee has the right to time off for a funeral if the person who died was a dependant. For example, their partner or parent. There’s no legal right for this time off to be paid, however most employers will offer some period of unpaid leave.
  • There is no legal right to time off in the case of bereavement of other, non-dependant family. However, regardless of whether an employee has a right to time off, employers are encouraged to be compassionate towards a person’s individual situation.

Maternity & Parental Leave

Maternity Leave

  • Pregnant employees/new mothers are entitled to up to 52 weeks’ maternity leave. An employee’s usual terms and conditions of employment will continue throughout the period of maternity leave however salary is replaced by statutory maternity pay, which amounts to 90% of basic salary for the first six weeks of leave and £156.66 per week (or 90% of average weekly earnings, if less), for a further 33 weeks. Many employers offer enhanced rates of pay during some or all of the maternity leave period (company maternity pay).
  • A woman returning to work from leave generally has the right to return to the job in which she was employed before her absence, subject to the duration of her maternity leave.

Paternity Leave

Paternity leave is available to employees with 26 weeks’ continuous service. Eligible fathers are entitled to take one or two weeks’ paternity leave, which is payable at the rate of £156.66 per week or 90% of average weekly earnings, if less. Again, many employers pay paternity pay at an enhanced rate (company paternity pay).

Shared Parental Leave

Shared parental leave is a flexible system of parental leave that allows mothers to commit to end their maternity leave and/or pay early. The balance of the maternity leave and pay period is available for either parent to take as shared parental leave. The leave must be taken in the first twelve months of a child’s life but does not have to be taken as a single continuous period. Both parents can be on leave at the same time if they wish.

Adoption Leave

Up to 52 weeks’ adoption leave is available to one member of an adopting couple. Adoption pay is paid at the same rates as statutory maternity pay. Adoptive parents can opt in to the shared parental leave system if the parent taking adoption leave elects to end their period of leave early.

Public Holidays

England and Wales have 8 annual public holidays. Scotland and Northern Ireland may additionally have local public holidays. Days are observed on that calendar day and if falling on a weekend.

Benefits to the Employee in The United Kingdom

Statutory Benefits

The UK has a comprehensive social security system, funded from general taxation and from National Insurance Contributions. The social security system provides state benefits to cover maternity/ paternity/adoption, childcare, disability and carer matters. It also administers retirement pensions. State benefits can be contractually supplemented by employers. The National Insurance Fund aims to provide subsistence level benefits to all those in need.

Employers carrying on business in Great Britain are required to have in place employer’s liability insurance against liability for bodily injury or disease sustained by employees and arising out of and in the course of their employment in Great Britain. Some employers may offer employees benefits such as life insurance, permanent health insurance, private medical insurance and company cars.

Other Auto-Enrolment Pension

Employers have to ensure that workers in the UK, between the ages of 22 and state pension age, and earning a salary of at least GBP 10,000 per annum are automatically enrolled into a qualifying pension scheme to which the employer must contribute. There are minimum total contributions that have to be made. Currently the total contribution rate is 8%. This includes a minimum for employers this is 3% of each employee’s qualifying earnings. Employees have the right to opt out of the scheme but then they are also not eligible for the employer’s contribution.

Other Benefits

Some employers may offer employees benefits such as life insurance, permanent health insurance, private medical insurance, company cars, season ticket loans for annual public transport tickets, subsidised gym membership etc.

Flexible Working Requests

Employees with at least 26 weeks’ continuous service are entitled to request to work flexibly (for example, to work on a part-time basis). The employer must consider the request reasonably and within three months of the request being made but is not obliged to agree to it. Originally the right applied only to employees with caring responsibilities but is now extended to all employees with the relevant length of service, regardless of the reason for wanting to work flexibly.

Visas and Foreign Workers

General Information

You are eligible to work in the UK, and therefore don’t need to obtain a work permit, if any of the following apply:

  • You are a British citizen
  • You are a European Economic Area (EEA) citizen
  • You are a Swiss national.

Due to the UK having left the EU on 31 January 2020, if you are an EU/EEA/Swiss national you and your family will usually need to apply to the EU Settlement Scheme if you wish to continue living and working in the UK after 30 June 2021. If your application is successful, you will get either settled or pre-settled status. Irish nationals maintain their current right to live and work in the UK without further documentation.

If you are from outside the European Economic Area (EEA) and Switzerland, you can work in the UK on a short or long-term basis with a work visa. If you have a visitor visa you cannot take a job in the UK. There are many types of work visa. The visa you need depends upon:

  • your skills and qualifications
  • if you have a job offer and sponsorship
  • if you want to bring your family with you
  • what you will be doing – for example sporting, charitable or religious work
  • if you are a Commonwealth citizen, you can apply for an Ancestry visa to work in the UK if you have a British grandparent and meet other eligibility criteria.

You should be able to apply for a visa via a British Overseas Mission in your own country, or the British Embassy. In order to apply for most work visas, you will usually need to gain a job offer with sponsorship from an employer in the UK first. Whilst some organisations have a licence to sponsor temporary and/or permanent employees to allow them to work at their business, not all of them will be able to this.

Having a visa does not necessarily mean you are automatically able to work in the UK, and you may also need a work permit in order to begin working. If you have already found a job in the UK and been accepted to work, or you have a visa, but it prohibits you from working, you may need to obtain a work permit. You cannot apply for a work permit directly. Your employer in the UK will need to apply on your behalf. The length of your permit will depend on the type of work you do, and the kind of permit granted.

Getting a Tax Number

All employees have to pay tax on your income if you come to live in the UK. Employer will deduct Income Tax directly from employee’s salary.

Everyone who works in the UK requires a National Insurance (NI) Number (also abbreviated NINO). Without one, employers have no way of advising the British Tax Department (HM Revenue and Customs) of the amounts you need to pay as NI contributions for state pension and the social security system and you will be charged a potentially substantial emergency tax on your income until you do have obtained a NI Number. You can start work without one, but you’ll need to apply for one straight away.

Your National Insurance number is your own personal account number. It is unique to you and you keep the same one all your life. It makes sure the National Insurance contributions and tax you pay are properly recorded against your name. It also acts as a reference number when communicating with the Department for Communities and HM Revenue & Customs (HMRC).

If you have the right to work in the UK, you can contact the nearest processing centre to make an appointment. You will get a letter from the Department for Work and Pensions (DWP) asking you to come to a National Insurance number interview. This ‘evidence of identity’ interview will usually be one-to-one (unless, for example, you need an interpreter). You will be asked questions about why you need a National Insurance number, your background and circumstances. The letter will also tell you which documents to take to prove your identity (originals, not photocopies), such as:

  • Passport or identity card,
  • Residence permit,
  • Birth certificate,
  • Marriage certificate,
  • Driving licence etc.

Following the interview, the processing centre will write and let you know whether your application was successful and what your National Insurance number is. Tell your employer your National Insurance number as soon as you know it.

Public Holidays in 2022

S.No Occasion Date
1. New Year’s Day (substitute day) January 3rd
2. Good Friday April 15th
3. Easter Monday April 18th
4. Early May Bank Holiday May 2nd
5. Spring Bank Holiday June 2nd
6. Platinum Jubilee Bank Holiday June 3rd
7. Summer Holiday August 29th
8. Boxing Day December 26th
9. Christmas Day (substitute day) December 27th

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