Employment law in the UK: How it is made

Essential points

• Law in the UK has two sources – legislation (made by parliament) and common law (where a judge, or panel of judges, create or develop law based on the case before them and decisions of previous courts on similar facts and situations, or interpret legislation to set a precedent for how it should be interpreted in future).  
  • Most legislation starts as a policy proposal. It is normally presented to parliament by ministers and then debated and voted on in the House of Commons and House of Lords. Amendments are often made during this process. Once a bill has been approved by both Houses of Parliament, it receives Royal Assent to become an act (law).  
  • When a precedent is developed in common law, a judge has made an interpretation of the law based on considering the words of legislation, their understanding of the intentions of parliament in making the law and the interpretation of the law in previous court cases.
  • Common law can be amended or even overruled by legislation. A government may decide that common law principles need to be set down in legislation. 
• In the UK, different policy areas are either set by the UK Government ('reserved matters') or given to the devolved administrations in Scotland, Wales and Northern Ireland ('devolved matters'). In Great Britain (England, Scotland and Wales) employment law is largely a reserved matter, developed and enacted by the UK Government, and applicable across England, Scotland and Wales. In Northern Ireland most areas of employment law are devolved (transferred), however some matters are not. The CIPD offers a resource detailing the matters that are devolved and those matters that are not in Northern Ireland.
• Employment law claims in Great Britain may follow different court processes: either employment tribunals or the civil courts. Occasionally, the facts that lead to employment law claims may also end up in the criminal courts if an illegal act has been committed, such as health and safety violations, sexual assault, or theft). Decisions by the Employment Tribunal can be appealed to the Employment Appeal Tribunal, the Court of Appeal, the Court of Session and, finally, the Supreme Court.
• Some employment law claims are automatically referred to one court or another (with the majority being processed by employment tribunals). However, some claims go straight to the civil courts. 
• While the UK was a member of the EU, the UK courts had to follow decisions made in the Court of Justice of the European Union (CJEU) and interpret UK law in accordance with those CJEU decisions in a number of areas including employment law. This principle of interpretation was part of the supremacy of EU law that was a key part of the UK's membership of the EU. During the Brexit transition period, under the Withdrawal Agreement, the entire body of EU law, including decisions of the CJEU and key principles of EU law, were 'retained' by the UK and became part of the UK law, including the principle of the supremacy of EU law. This changed at the start of 2024 when the final Brexit arrangements were implemented. The concept of 'retained' law was changed and relabelled as 'assimilated law' and the principle of supremacy of EU law was removed. As a result, the UK courts may now have regard to any post-Brexit judgments of the CJEU but are not bound by those decisions (although CJEU decisions will always remain relevant for businesses operating in both UK and EU jurisdictions). When interpreting any uncertainties over assimilated EU law, the UK higher courts can choose not to follow previous CJEU decisions.