Know Your Rights

How to Dismiss an Employee Fairly

Dismissing an employee incorrectly is one of the most expensive mistakes a small business can make. Even where you have a fair reason you must follow a fair procedure.

The fair dismissal procedure requires:

• A reasonable investigation before taking action
• Written notification of the allegations
• A disciplinary hearing where the employee can respond
• The right to be accompanied by a colleague or trade union representative
• A written decision with the right to appeal

After 2 years of service an employee has full unfair dismissal rights. From January 2027 this threshold reduces to just 6 months.

The Correct Redundancy Process for Employers

Making someone redundant without following the correct process exposes you to significant tribunal risk. The process must be genuine, fair and properly documented.

• Consult with affected employees before any decision is made
• Use fair and objective selection criteria if choosing between employees
• Consider suitable alternative roles before dismissing
• Pay the correct statutory redundancy pay and notice
• For 20 or more redundancies follow collective consultation rules

Changing Employee Contracts — What You Can and Cannot Do

You cannot simply change an employee's contract without their agreement. The correct approach is to consult with affected employees, explain the business reasons, seek agreement, and give proper notice of any changes. If agreement cannot be reached you may need to terminate and offer re-engagement on new terms — which itself carries dismissal risks if not handled correctly.

Universal Credit — What It Is and How to Claim

Universal Credit is the main benefit for people of working age who are on a low income or out of work. It replaces six older benefits including Jobseeker's Allowance, Housing Benefit and Tax Credits.

Who can claim? You must be aged 18 or over, under State Pension age, living in the UK, and have less than £16,000 in savings.

Apply online at gov.uk/universal-credit. You will need your National Insurance number, bank details, email address and information about your housing costs and savings.

📎 Official sources: gov.uk/universal-credit · gov.uk/how-to-claim-universal-credit

New Style Jobseeker's Allowance — Are You Entitled?

New Style JSA is a separate benefit from Universal Credit. You may be able to claim it if you have paid enough National Insurance contributions in the last 2 to 3 tax years. It is paid for up to 182 days and can be claimed alongside Universal Credit.

Financial Help When You Lose Your Job

Losing your job can cause immediate financial pressure. Several sources of help are available beyond benefits.

• Contact your lender immediately — most mortgage lenders offer payment holidays if you lose your job. Contact them before missing payments.
• StepChange — free debt advice charity. Call 0800 138 1111 or visit stepchange.org
• Citizens Advice — free advice on benefits, debt and housing. Visit citizensadvice.org.uk or call 0808 223 1133
• Council Tax Reduction — if your income has fallen you may qualify. Contact your local council.
• The Trussell Trust — food banks across the UK. Visit trusselltrust.org to find your nearest one.

Are You Self Employed, a Worker or an Employee?

Employment status is one of the most important and most misunderstood areas of UK employment law. Your status determines your rights, your tax obligations and what your client owes you.

The three employment statuses:

• Employee — works under a contract of employment, has full rights including unfair dismissal protection, statutory redundancy pay and sick pay.
• Worker — broader category including many gig economy workers. Entitled to National Minimum Wage, holiday pay and protection from unlawful deductions.
• Self employed — fewest statutory rights. Responsible for own tax. No entitlement to holiday pay or sick pay from the client.

IR35 Explained — Does It Apply to You?

IR35 determines whether a contractor working through a limited company should be taxed as an employee. If your contract falls inside IR35 you pay broadly the same tax as an employee but without the employment rights.

Key factors HMRC considers:

• Substitution — can you send someone else to do the work in your place?
• Control — does the client control how, when and where you work?
• Mutuality of obligation — is the client obliged to offer work and are you obliged to accept it?

Since April 2021, medium and large private sector organisations determine the IR35 status of contractors they engage. Use HMRC's Check Employment Status for Tax tool at gov.uk to get an indication of your status.

📎 Official sources: gov.uk/check-employment-status-for-tax · gov.uk/ir35-find-out-if-it-applies

Self Employment Tax — What You Need to Know

If you are self employed you are responsible for reporting your income and paying your own tax and National Insurance through Self Assessment.

• Register with HMRC as self employed by 5 October in your second year of trading
• Complete a Self Assessment tax return each year by 31 January
• Pay Income Tax on profits above the Personal Allowance of £12,570 in 2026
• Pay Class 2 and Class 4 National Insurance contributions
• Register for VAT if your turnover exceeds £90,000

Child Benefit — What You Are Entitled To

Child Benefit is a regular payment from the government to help with the cost of raising children. You can claim it for children under 16, or under 20 if they stay in approved education or training.

Who can claim? Almost everyone who is responsible for a child can claim — it does not matter how much you earn, although higher earners may have to pay some back through their tax return.

The High Income Child Benefit Charge: If you or your partner earns over £60,000 per year, you may need to pay back some or all of the benefit through your tax return. However, it is still worth claiming because you also receive valuable National Insurance credits which protect your State Pension.

Pension Credit — Are You Missing Out?

Pension Credit is one of the most unclaimed benefits in the UK. Around 850,000 people who are entitled to it are not claiming it. If you or a relative is over State Pension age and on a low income, this is the first thing to check.

Why Pension Credit is so important: Claiming Pension Credit does not just top up your income — it also unlocks a range of other benefits:

• Free TV licence for everyone aged 75 and over
• Housing Benefit to help with rent
• Council Tax Reduction from your local council
• Warm Home Discount — a reduction on your energy bills
• Free dental treatment on the NHS
• Help with NHS costs — glasses, travel to hospital

Attendance Allowance — For People Who Need Help at Home

Attendance Allowance is a benefit for people aged 67 or over who need help with personal care or supervision because of a physical or mental disability or illness. It is not means tested — it does not matter how much money you have or whether you own your home.

Important things to know:

• You do not need to have a carer to claim — it is based on what help you need, not who provides it
• You can claim if you live alone or with family
• It can be paid even if you are in a care home in some circumstances
• Many conditions qualify — arthritis, dementia, heart conditions, breathing difficulties, sight or hearing problems
• Getting Attendance Allowance can also help you claim Pension Credit and other benefits

Support for Carers — You Are Entitled to Help Too

If you care for a family member or friend who has a disability, illness or mental health condition, there is financial support available for you as the carer — not just for the person you look after.

Carer's Allowance is the main benefit for carers. The current rate is £81.90 per week (2026). You can claim if:

• You spend at least 35 hours per week caring for someone
• The person you care for receives certain disability benefits such as Attendance Allowance or PIP daily living component
• You are not in full time education
• You earn no more than £151 per week after deductions

Carer's Credit — if you do not qualify for Carer's Allowance, Carer's Credit protects your National Insurance record so your future State Pension is not affected by your caring role.

Help for the person you care for: Make sure they are claiming everything they are entitled to. Many carers find that helping the person they care for to claim Attendance Allowance or PIP also enables the carer to then claim Carer's Allowance.

Other Help for Older People and Families

There are many other forms of financial help that older people and families may not know about. Here is a summary of the most important ones.

For older people:

• Winter Fuel Payment — £200 to £300 per year to help with heating bills. From 2024 this is only paid to those receiving Pension Credit or certain other benefits — another reason to claim Pension Credit if eligible.
• Warm Home Discount — £150 off your electricity bill each winter if you receive Pension Credit or are on a low income.
• Free NHS prescriptions — everyone aged 60 and over gets free NHS prescriptions.
• Free eye tests — available to everyone aged 60 and over on the NHS.
• Free bus pass — available from State Pension age for free bus travel in England.
• Council Tax Reduction — if you are on a low income contact your local council about a reduction in your council tax bill.

For families:

• Free school meals — children may qualify if you receive Universal Credit or other qualifying benefits.
• 15 to 30 hours free childcare — available for children aged 9 months to 4 years depending on your circumstances.
• Healthy Start vouchers — if you are pregnant or have children under 4 and receive qualifying benefits, you may get vouchers for food and vitamins.
• Sure Start Maternity Grant — a one-off payment of £500 for families on qualifying benefits who are expecting their first child.

Personal Independence Payment (PIP) — What It Is and How to Claim

PIP is the main disability benefit for people aged 16 to 64. It is not means tested — it does not matter how much you earn or whether you work. It is based entirely on how your condition affects your daily life and mobility.

PIP has two components:

• Daily Living — for help with everyday tasks like preparing food, washing, dressing, managing medicines and communicating
• Mobility — for help with getting around

Many conditions can qualify including physical disabilities, mental health conditions, learning difficulties, chronic pain, fatigue conditions, neurological conditions and more. You do not need a specific diagnosis — it is about how your condition affects you.

Employment Support Allowance and Universal Credit — Support When You Cannot Work

If you cannot work due to illness or disability, there are two main benefits that provide income support.

New Style Employment Support Allowance (ESA) — you may be able to claim if you have paid enough National Insurance. You will be assessed and placed in either the Work Related Activity Group or the Support Group depending on your capability for work.

Universal Credit with Limited Capability for Work — if you claim Universal Credit and are assessed as having limited capability for work, you receive an additional element on top of your standard allowance. The Limited Capability for Work and Work-Related Activity (LCWRA) element is £416.19 per month extra (2026).

The Work Capability Assessment — both ESA and Universal Credit use this assessment to determine your capability for work. As with PIP, always describe your worst days and how your condition affects you most severely.

Your Rights in the Workplace if You Have a Disability

If you have a disability or long term health condition, the Equality Act 2010 gives you significant legal protections in employment.

What counts as a disability under the law? A physical or mental impairment that has a substantial and long-term adverse effect on your ability to carry out normal day-to-day activities. Long-term means it has lasted or is expected to last 12 months or more.

Reasonable adjustments: Your employer has a legal duty to make reasonable adjustments to remove disadvantages caused by your disability. Examples include:

• Allowing you to work from home or flexible hours
• Providing specialist equipment or software
• Adjusting your duties or targets
• Giving you additional breaks or rest time
• Providing a phased return to work after illness

Access to Work — a government scheme that can pay for equipment, support workers, travel costs and other adjustments to help disabled people stay in or get into work. Apply at gov.uk/access-to-work.

The Armed Forces Compensation Scheme — What You May Be Entitled To

The Armed Forces Compensation Scheme (AFCS) provides compensation for injury, illness or death caused by service in the UK Armed Forces on or after 6 April 2005. It covers both physical and mental health conditions including PTSD.

Who can claim? You can claim if you are a current or former member of the UK Armed Forces and your injury, illness or condition was caused by your service. There is no time limit for claiming — you can apply at any point after leaving service.

What does it cover?

• Physical injuries sustained during service
• Mental health conditions including PTSD, depression and anxiety caused by service
• Illness caused or made worse by service
• Death in service — compensation for dependants

Lump sum payments are made at 15 levels depending on the severity of the condition — from a few thousand pounds up to £650,000 for the most serious cases. A Guaranteed Income Payment may also be payable for more serious conditions.

Armed Forces Pensions — Understanding What You Are Owed

The Armed Forces Pension Scheme is one of the most generous pension schemes in the UK — but many veterans do not fully understand what they are entitled to or when they can access it.

The three main schemes:

• AFPS 75 — for those who served before April 2005. An immediate pension is payable after 16 years officer service or 22 years other ranks.
• AFPS 05 — for those who joined between April 2005 and March 2015. Pension payable from age 65, or an Early Departure Payment after 18 years service.
• AFPS 15 — for those who joined from April 2015. Based on career average rather than final salary.

War Pension Scheme — a separate scheme for those injured or disabled before April 2005. Contact Veterans UK to check your entitlement.

Employment Rights and Support for Veterans

Returning to civilian work after military service can be challenging. There is dedicated support available and veterans have specific legal protections in the workplace.

The Armed Forces Covenant: Employers who sign the Armed Forces Covenant commit to treating veterans fairly in recruitment and employment. Look for employers with the Defence Employer Recognition Scheme award.

Legal protections: Veterans are protected from discrimination in employment related to their service, including any mental or physical health conditions arising from service. These are protected under the Equality Act 2010.

Employment support schemes:

• Career Transition Partnership (CTP) — free resettlement support including CV help, interview training and job finding for those leaving service
• Op NOVA — employment support specifically for veterans in the criminal justice system
• Veterans Employment Support — gov.uk has a dedicated veterans employment hub

Housing for veterans: Local councils must give additional preference to veterans with urgent housing needs, including those with service-related disabilities. If you are homeless or at risk of homelessness as a veteran, contact your local council and mention your service history.

Mental health support: Op COURAGE is the NHS Veterans Mental Health and Wellbeing Service — free specialist mental health support for veterans. Self-refer at nhs.uk or call your GP.