What Happens When Employers Ignore The Law?

Employment Law has been around for an awfully long time. In fact, it goes all the way back to the medieval period and one of the first regulations ever created. The Statue of Labourers 1351. It was created because there had been a significant decline in the labour market thanks to the Black Death, and it was designed to fix wages and restrict the movement of workers. Then came the Master Servant Act in 1823, which was the first law that unequivocally favoured the employer, with employees facing imprisonment if they breached their contract.

Needless to say, we’ve come a long way since then! Now we have a set of robust employment laws designed to protect everyone involved, with as little favouritism as possible. But there are still employers who choose to ignore these laws in favour of what they want to do. And today, I wanted to take a look at what happens when an employer ignores employment law.

What is Employment Law For?

Firstly, let’s go over the basics. Employment laws are in place to regulate the relationship between employers and employees. They cover everything from setting baselines for pay, working conditions and workplace rights, and govern how employers must act and what they must do from recruitment to redundancy. There are hundreds of laws in the entire UK employment landscape, but they’re all built on a core of primary legislation:

Employment Rights Act 1996. The cornerstone of UK employment law, governing rights around unfair dismissal, redundancy and statutory pay.

Equality Act 2010. Brings together anti-discrimination laws, protecting employees from discrimination, harassment and victimisation based on protected characteristics like age, race, gender and disability.

Working Time Regulations 1998. Dictates what statutory holiday entitlement employers must give, as well as 48-hour working weeks and rest breaks.

Employment Relations Act 1999. Covers trade unions, flexible working requests and disciplinary hearings.

Employment Rights Act 2025. This is the recent huge update to the first Employment Rights Act in this list. I recently wrote about these changes in more detail, so you can read about that here.

Under that legislation, there are more specific acts, regulations and case law, like the National Minimum Wage Act 1998 or the Agency Workers Regulations 2010. There are also a few pieces of UK employment legislation that contain key employment law information, even if they aren’t solely related to employment, like the Bribery Act 2010 and the Data Protection Act 2018.

In other words, there’s a lot that employers need to be aware of, which is why the field of outsourced HR exists!

The Main Consequences

You might think that, with so many laws, there is a bit of leeway for getting things wrong, or for not realising that you were supposed to be doing something. Sadly, ignorance of the law isn’t an excuse, and there are consequences for getting it wrong. Those consequences broadly fall into 4 categories. 3 that are enforced by law, and 1 that’s more of a natural by-product.

1. Employment Tribunals: Employees can (and do) take their employers to an employment tribunal if they feel the employer had breached their contract or the law. This is essentially a type of employment court, and it is a legal proceeding. Tribunals make decisions in disputes between employees and employers, and they’re expensive and time-consuming for employers. If the claim succeeds, the tribunal can order the employer to pay compensation, or to re-instate the employee.

2. Financial Penalties: Regulatory bodies can hand out substantial fines to employers in breach of the law. For example, failing to protect workplace data (a GDPR must), is punishable with a fine of up to £17.5 million, or 4% of annual turnover – whichever is higher. Fines vary depending on which law you’ve breached and how badly you breached it, but even the smallest will have a significant financial impact on your business.

   
   

3. Criminal Prosecution: Deliberately ignoring certain laws can bring on criminal prosecution. For example, ignoring health and safety legislation or right-to-work laws can lead to criminal charges, unlimited fines, and even prison sentences for directors! While that last one is usually reserved for severe criminal violations, severe negligence or deliberate exploitation rather than standard administrative breaches, being a limited company doesn’t protect you much here.

   
   

4. Reputational Damage: Tribunal judgements are often a matter of public record, so they can be seen by anyone, including future employees or investors. Government agencies like the Home Office also regularly publish ‘name and shame’ reports for things like paying below the minimum wage or hiring undocumented workers, and these reports are broken down into regions and often picked up by the press and, which is not the kind of publicity you want. Not to mention the fact that employees talk! To each other, to their families, to other people and online. If you’re ignoring laws, word will get out and you might struggle with things like hiring or gaining new customers in the future.

   
   

All of the above happen every day, on a scale from minor issues to jaw-droppingly blatant criminal. The government take employment law breaches seriously, and as an employer, so should you. It’s your job to make sure your company is complying with all aspects of employment law, and to know which areas apply to you. If you can’t do this internally (and many businesses can’t), then we highly recommend working with a skilled HR consultant to keep you on track. At Helix HR Consulting, that’s exactly what I do. I work with businesses of all shapes and sizes to make sure you’re covered, compliant and efficient at the same time. Whether you need regular help or a quick steer in the right direction, with me you’ll have someone on your side who genuinely cares about your success, and your sanity! If you’d like to know more, just get in touch with me today.