Introduction

UK employment law originates in three places: in Parliament through the legislative process, in the courts through judicial decisions and, currently, in European Union institutions.

This factsheet for CIPD members looks at the process of making UK legislation.

Acts of Parliament are sources of ‘primary’ legislation in which the key principles of the law are set out. Examples of important acts relating to employment law include the Employment Rights Act 1996, the Employment Act 2002, the Equality Act 2010, and the Enterprise and Regulatory Reform Act 2013.

While the Acts are in their draft form and being considered by Members of Parliament, they are called Bills.

Most primary legislation is proposed to Parliament by government ministers in the form of a Bill. This is then debated and voted on in Parliament. Amendments are often made during this process. Once a Bill has been approved by both the House of Commons and the House of Lords, and has received Royal Assent, it becomes law.

Before a Bill is presented to Parliament, ministers usually put forward their proposals for consultation and contributions are invited from any interested party. The Department for Business, Energy and Industrial Strategy (BEIS) is responsible for government policy in a number of areas including employment law and sets out a variety of policy options on its website. 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.

An example of this is the report on modern working practices by Matthew Taylor, Chief Executive of the Royal Society of the Arts, published in 2017. This extensive report recommended many reforms, some of which formed the basis of further consultation and have since become law as part of the Good Work Plan. One example of the confirmed changes is that, from April 2020, the right to receive a statement of written particulars will be extended to workers as well as employees and will be due on the first day of work, rather than within two months.

Governments also 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 draftsmen 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.

Each year the government sets out its legislative programme for the year ahead in the Queen's Speech. The Queen reads this out from the throne in the House of Lords at the State Opening of Parliament (usually now held in May or June), but the words are those of government ministers, not those of the Queen. The speech essentially consists of a list of the Bills that the government intends to bring forward in the following year. Brief summaries of around 30 Bills are typically included, of which two or three may contain employment-related measures.

When 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. Most new employment legislation is presented by ministers based at BEIS but other ministers can sometimes sponsor employment legislation. The Department for Work and Pensions is often involved, as are ministers with responsibility for equality, such as those in the Government Equalities Office which is an independent department within the Home Office.

The Bill starts with its short and long titles and what is known as the ‘enacting formula', a form of words first formulated in the fifteenth century:

‘Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:’

A series of numbered clauses then follow, setting out the contents of the legislation and details of the date it will come into force. 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.

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.

First Reading

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

Second Reading

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 it in turns to contribute to the debate. Speeches are often limited to eight minutes or so, and members often interrupt one another to dispute particular 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 party in government-sponsored Bills.

Committee Stage

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. 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. At the Committee Stage amendments are proposed as well as new clauses. These are debated in groups and voted on.

Report Stage

The Bill, now often amended, returns to be debated again and voted on by the whole House. More amendments can be proposed 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

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.

'Ping pong'

From time to time a Bill is passed by one House, but not by the other. More often there are disagreements about particular 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 business 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. Since 1990 there have been only four occasions on which a government has needed to have recourse to the Parliament Acts, none of which has involved any employment-related legislation. What is much more common is the development of what is known as 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 Queen must give it her 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.

How an Act comes into force

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 after an Act has been passed. 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.

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.

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. Important examples of employment related statutory instruments include the Working Time Regulations 1998 and the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). More recent examples include the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 and the Agency Workers (Amendment) Regulations 2019.

The Scottish Parliament and the Welsh and Northern Ireland Assemblies have the power to legislate in defined areas.

The right to make new employment laws is not currently devolved either in Scotland or in Wales, although some other areas of employment policy are. This enabled the Scottish Government to abolish employment tribunal fees whilst they were still payable in England and Wales. Before the Northern Ireland assembly was suspended in 2017 ministers had the power to propose employment legislation which is voted on by the Assembly members and can become law. As a result, significant differences have developed between employment law in Northern Ireland and in the rest of the UK. For example, the qualifying period for unfair dismissal in Northern Ireland is one year whereas in England, Wales and Scotland the period has been set at two years since April 2012.

For more information on the key differences in employment law between Northern Ireland and the rest of the UK, see our member only factsheet.

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. There is a great deal of case law in the field of employment which is a significant addition to statutes enacted by Parliament. 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 up 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. As a result, in practice, this means that the judges in the higher courts make the law. Whenever a similar type of case comes before a lower court, the principles that have been set out by the higher court must be applied.

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' into 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. The effect of implied terms on employment law has been profound, yet many implied duties have never been given any consideration by Parliament and are entirely a creation of the courts.

For example, 2014 saw the creation of a new common law duty following the Supreme Court decision West London Mental Health NHS Trust v Chhabra (unreported, [2013] EWCA Civ 11 25 January 2013, SC) which confirmed that all employment contracts have implied into them a right for employees to be treated fairly when being formally disciplined by their employers. Importantly, this right applies equally in the case of contractual and non-contractual disciplinary procedures.

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 over-rule 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 of relevance to employment was the abolition in 2013 of the right for employees and former employees to base personal injury claims on 'breach of statutory duty'.

Contacts

UK Parliament – information on how Parliament works and law is made

Scottish Parliament

Welsh Assembly Government

Northern Ireland Assembly

Books and reports

DARBYSHIRE, P. (2016) Nutshells English legal system. 10th ed. London: Sweet and Maxwell.

DICKSON, B. (2018) Law in Northern Ireland. 3rd ed. Oxford: Hart Publishing.

ELLIOT, C. and QUINN, F. (2018) English legal system 2018/19. 19th ed. Harlow: Pearson Education Ltd.

ROGERS, R. and WALTERS, R. (2018) How Parliament works. 8th ed. Abingdon: Routledge.

SHIELS, R. (2015) Scottish legal system. 4th ed. Edinburgh: W.Green.

This factsheet was written by Stephen Taylor and last updated by Lisa Ayling, solicitor and employment law specialist.

Stephen Taylor

Stephen TaylorSenior Lecturer in Human Resource Management (HRM), University of Exeter Business School and Chief Examiner for the CIPD

Stephen Taylor is the author/co-author of several HRM books, including the bestselling texts 'Human Resource Management' (with Derek Torrington, Laura Hall and Carol Atkinson) and ‘Armstrong’s Handbook of Human Resource Management Practice (with Michael Armstrong).

He is a frequent speaker at HR conferences and Acas events for employers, and has regularly represented parties in employment tribunals. He also undertakes HR consultancy, tutoring and training work, and previously worked in a variety of HR management roles in the hotel industry and in the NHS.

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