Many American businesses are wary of what is often seen as a more restrictive employment environment in the UK. In fact, many employment protections for employees in the two countries can be more similar than we think.
Protection from Mistreatment
Both countries offer employees a range of protections against mistreatment, including laws regarding discrimination and "whistleblowing."
UK discrimination law arises mostly from European Union law (which prohibits discrimination on a number of grounds). These protections are implemented through the UK Equality Act 2010.
In the United States, a similar "topdown" approach arises as a result of the country's federal model, where federal laws provide minimum protections for all citizens. State congresses also are able to legislate on employment in their states to go beyond the federal minimum.
Protection from Dismissal
One of the major differences relates to protection from dismissal. Whilst protection from mistreatment is firmly entrenched in the U.S. employment law psyche, it is a cultural norm for employees to serve at the will of the employer, who, in most states, can dismiss them at any time, without notice or with very short notice, for any reason other than one that is discriminatory or detrimental on a protected ground.
This is in contrast to the UK position, where, after two years, an employee is able to bring a claim for "unfair dismissal" resulting in compensation for loss of earnings in the event that the individual is dismissed for any reason except for a "potentially fair" reason, such as misconduct or poor performance, and where a consultative process has not been carried out with the employee in relation to that dismissal.
UK law goes even further in relation to large numbers of redundancies, in which collective consultation rules apply, requiring employers to consult with representatives of employees before any dismissals can be made. Where a business is being sold, similar rules provide for the employer to consult with representatives of the employees of that business in order to transfer their employment to the buyer.
Benefits and Retirement
The provision of employment benefits is another area in which the countries differ greatly. In the UK, with state healthcare and pension provided for all, the area of benefits has been much slower to develop, and historically has been a predominantly private-sector matter, although this has changed over recent years with increased regulation of pension schemes, culminating in the introduction of auto-enrolment.
In the United States, in contrast, due to the lack of state healthcare or retirement benefits, employers have become the key providers of both of these benefits. Successive governments have legislated to regulate the way in which employers provide these benefits to employees (usually by making compliance financially beneficial for employers) and to provide employees with some limited protections, which are alien to their UK counterparts.
Worlds Apart
Many of the differences between the U.S. and UK positions result from cultural change in the 20th century. In the UK, the "from the cradle to the grave" philosophy of the post-war consensus resulted in successive governments (regardless of political party) instituting evergreater protection for employees, on grounds of either social inclusion or paternalism, under the notion of a "job for life."
In the United States, a much more individualistic philosophy prevails, historically preventing governments from imposing on businesses any more than the minimum acceptable protections for employees.
What's Next?
Whilst employment protections in both countries have remained relatively static (partly due to the desire to avoid increased costs to businesses during the global recession), recent years have seen something of a shift in terms of provision of benefits in both countries.
In the UK, cash-strapped governments have become increasingly keen to shift the burden of retirement benefits onto employers. The auto-enrolment provisions of the Pensions Act 2008 require employers automatically to enroll all employees into a qualifying pension scheme and to make mandatory contributions into the scheme, a major shift in retirement benefit provision.
In the United States, the focus on employer-sponsored benefits has continued. The employer mandate provisions of the Patient Protection and Affordable Care Act of 2010 (ACA or "Obamacare"), although now delayed until 2015, seek to extend coverage of healthcare benefits by requiring employers with more than 50 full-time employees to provide healthcare benefits to staff.
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