U.S. vs. U.K. Employment Law: What's the Difference?

24 February 2012

The old saying goes that the United Kingdom and the United States are just “two countries separated by a common language.” But it’s more than the use of the letter “u” in labo(u)r that distinguishes these two nations.

Similar to the rest of the European Union, U.K. employment law is designed to protect employees, and is very different than those that exist in the U.S. When first considering international expansion to the U.K., here are some of the employment differences that businesses need to keep in mind:

  • “At-will” validity. Similar to most countries outside the U.S., at-will employment does not exist in the U.K. The employee-employer relationship is governed by employment law and some of these provisions are reflected in detailed employment contracts; your standard, U.S.-based offer letter will not satisfy the requirements here. Furthermore, terminations in the U.K. must be justifiable and follow certain statutory rules, included a required period of notice. Failure to adhere to the due-process requirements may result in unfair dismissal or discrimination claims by the employee.
  • Non-compete agreements. While non-competition agreements are sometimes included as part of U.K. employment contracts, post-termination restrictions may be unenforceable depending on a number of factors, including the circumstances around the termination of the employment relationship. Again, U.K. employment law skews in favor of employees; courts tend to take a particularly hard look at these types of clauses to see if they are truly justified and ensure that they do not cause hardship to former employees.
  • Background checks regulations. Even though both the U.S. and U.K. are working towards enhancing data privacy for citizens, the countries differ in how pre-employment screenings are managed. The U.S. allows most employers to conduct background checks without many hurdles (some types do require consent); the U.K. allows these checks, but they are only allowed when relevant to the job to be performed. Additionally, in the U.K., data collection providers must meet certain minimum requirements and be registered with the government before being permitted to conduct checks. 
  • Different right-to-work requirements. In the U.S., proving the legal right to work in country is often the responsibility of the employee. Companies can be fined for right-to-work issues, but the price tag is minimal when compared to the penalties for such violations in the U.K. As a result, evidence of right to work is part of the employment onboarding process in the U.K., putting the burden on the employer to physically evidence and retain appropriate records of an employee’s eligibility to work in the U.K.

For more U.S.-U.K. employment law differences, read Part 2 of this post.