Skip to main content

Employment Law for BJJ Gym Owners UK: What You Must Know

UK employment law creates extensive obligations for gym owners who employ instructors and staff. From right-to-work checks and DBS requirements to minimum wage compliance, holiday pay, pensions, and dismissal procedures, getting it wrong leads to tribunal claims, HMRC penalties, and potentially criminal prosecution. This comprehensive guide covers every legal requirement you must meet when hiring employees in 2026, helping you stay compliant from day one.

Key Takeaways

  • Right to work checks are mandatory before employment starts, with penalties up to £20,000 per illegal worker
  • National Living Wage increases to £12.71/hour for 21+ from April 2026, with strict enforcement
  • Statutory Sick Pay reforms from April 2026 mean payment from day one at £123.25/week or 80% of earnings
  • Employment status (employee vs contractor) determines obligations, but actual relationship matters more than contracts
By GrappleMaps Editorial Team · Updated 4 February 2026

In This Guide

Why Employment Law Matters for Gym Owners

Many gym owners approach employment law reactively – only learning requirements after making mistakes or receiving complaints. This is expensive. Employment tribunal claims average £10,000-£30,000 in legal costs even when successfully defended, HMRC penalties for minimum wage underpayment reach 200% of arrears owed, and failing to conduct right to work checks costs up to £20,000 per illegal worker plus criminal prosecution risk.

Employment law serves two purposes: it protects workers from exploitation and unfair treatment, and it provides employers with clear frameworks for managing staff relationships. When you understand and follow these rules from the start, you create a fair, professional gym environment whilst protecting yourself from legal and financial risk.

UK employment law is complex and changes frequently. The Employment Rights Act 2024 introduced significant reforms taking effect in April 2026, including sick pay from day one and removal of the lower earnings limit. Staying current is an ongoing responsibility. This guide covers the key areas you must understand when hiring instructors and staff.

Employee vs Worker vs Contractor: The Critical Distinction

Your first and most consequential decision is determining employment status. This affects tax, National Insurance, employment rights, and your legal obligations. Getting it wrong creates significant liability.

Employee Status: Full Rights and Protections

Employees have the most extensive rights under UK law. They're entitled to protection from unfair dismissal after 2 years' continuous service (immediately for certain automatically unfair reasons like pregnancy or whistleblowing), statutory sick pay (£123.25/week or 80% of earnings from day one from April 2026), statutory maternity pay (90% of wages for 6 weeks, then £194.32/week for 33 weeks), statutory paternity pay (£194.32/week for 2 weeks), minimum notice periods (1 week after 1 month service, increasing with tenure), pension auto-enrolment if earning £10,000+ annually, redundancy pay after 2 years' service, and the right to request flexible working from day one.

For you as employer, this means operating PAYE tax deduction, paying employer's National Insurance at 15% on earnings above £5,000 annually, providing written statement of terms within 2 months (best practice: before start), maintaining Employer's Liability Insurance (minimum £5 million cover), following statutory disciplinary and dismissal procedures, and allowing 5.6 weeks paid holiday annually (28 days for full-time workers).

Worker Status: Limited Rights

Workers occupy middle ground – more rights than contractors but fewer than employees. They're entitled to National Living Wage (£12.71/hour for 21+ from April 2026), holiday pay (5.6 weeks annually), rest breaks, protection from discrimination, and protection from unlawful deduction of wages. However, they don't have unfair dismissal rights, redundancy pay, minimum notice periods, or statutory sick/maternity pay.

Worker status is relatively uncommon in gym contexts. It typically applies to casual or irregular work where there's no obligation to offer or accept work, but when work is undertaken, employment protections apply. Zero-hours contracts often create worker (not employee) status.

Self-Employed Contractor Status: Minimal Rights

Genuinely self-employed contractors have minimal employment rights. They're not entitled to minimum wage, holiday pay, sick pay, or employment protections. They're responsible for their own tax and National Insurance through Self Assessment, can work for multiple clients, and typically have greater autonomy over how they deliver services.

For gym owners, contractors mean no employer NI liability, no PAYE administration, no holiday pay, and no employment tribunal risk. However, IR35 rules create significant risk if the working relationship actually constitutes employment despite contractor paperwork. See our dedicated contractor vs employee guide for comprehensive IR35 compliance.

HMRC Employment Status Tests

HMRC determines status based on the actual working relationship using these tests:

  • Control: Who controls what work is done, when, where, and how? Employee relationships involve significant employer control.
  • Substitution: Can the worker send someone else? Employees must provide personal service.
  • Mutuality of Obligation: Must the employer offer work and must the worker accept? Yes for employees, no for contractors.
  • Integration: Is the worker part of the organisation or in business for themselves?
  • Financial Risk: Does the worker risk their own money? Employees receive fixed pay regardless.
  • Equipment: Who provides tools and equipment? Employers typically provide for employees.

Use the free HMRC Check Employment Status for Tax (CEST) tool at gov.uk/guidance/check-employment-status-for-tax to assess status. HMRC will stand by the result if your information is accurate.

IR35 and Off-Payroll Rules for Gyms

IR35 (off-payroll working rules) prevents 'disguised employment' where individuals work through limited companies whilst performing duties equivalent to employees. From April 2026, the small company threshold increases to £15 million turnover, £7.5 million balance sheet, or 50 employees. Most BJJ gyms qualify as small companies, meaning contractors working with you remain responsible for their own IR35 determination.

However, if HMRC later determines the relationship was actually employment, you could still owe employer's National Insurance contributions backdated up to 6 years, plus interest and penalties. The contractor's status doesn't protect you if the working relationship indicates employment. Always assess the real relationship using HMRC tests, not just what's written in contracts.

Right to Work Checks: Mandatory Before Employment Starts

Conducting right to work checks is a legal requirement before anyone starts working for you. Failure carries severe penalties including civil penalties up to £20,000 per illegal worker and potential criminal prosecution for knowing employment of illegal workers.

Before First Day of Work

You must check and copy acceptable right to work documents before the employee's first day. Acceptable List A documents (unlimited right to work) include British or Irish passport, passport with indefinite leave to remain in the UK, or settled status under EU Settlement Scheme. List B documents (time-limited right to work) include visa with permission to work, biometric residence card, or pre-settled status.

Critically, Biometric Residence Permits (BRPs) expired on 31 December 2024 and can no longer be used as standalone proof. Individuals previously holding BRPs must now use eVisas and share codes for verification.

Check original documents in the presence of the holder, take and keep clear copies, record the date of check, and store copies securely (data protection applies). For EU, EEA, and Swiss citizens with settled or pre-settled status, you must use the Home Office online checking service via share code – physical documents are not acceptable.

Penalties for Non-Compliance

Civil penalty of up to £20,000 per illegal worker employed (£15,000 for first breach, £20,000 for subsequent), potential criminal prosecution if HMRC believes you knew or had reasonable cause to believe the person had no right to work (unlimited fine and/or imprisonment), public naming in the illegal working enforcement list, and potential licence revocation if you hold premises licences for alcohol or late-night refreshment.

EU/EEA Citizens Post-Brexit

EU, EEA, and Swiss citizens are no longer automatically eligible to work in the UK. Those who arrived before 31 December 2020 should hold settled or pre-settled status under the EU Settlement Scheme. Those arriving on or after 1 January 2021 require a visa under the points-based immigration system (typically Skilled Worker visa).

To verify settled/pre-settled status, the individual generates a share code on the Home Office portal at gov.uk/prove-right-to-work. You then use this code to check their status online at gov.uk/view-right-to-work. Save the online verification result.

Important: Pre-settled status is time-limited (usually 5 years). However, from recent reforms, you're no longer required to conduct follow-up checks on employees with pre-settled status – a compliant initial check is sufficient.

Visa Holders and Sponsorship

If hiring someone requiring a work visa (Skilled Worker visa), they must already hold the visa or you must become a licensed sponsor. Obtaining a sponsor licence is complex and expensive: initial application fee £536-£1,476 depending on organisation size, annual Immigration Skills Charge £364-£1,000 per sponsored worker per year, Home Office compliance requirements and record-keeping, and skilled occupation codes must match job roles (most BJJ instructor roles don't qualify).

Most small BJJ gyms won't sponsor visas due to cost and complexity. It's usually only viable when hiring highly specialised instructors for senior roles.

DBS Checks for Instructors Teaching Children

Enhanced Disclosure and Barring Service (DBS) checks are required for anyone teaching or supervising children under 18 in a regular capacity. This is non-negotiable – teaching children without a valid DBS check creates safeguarding risk and potential criminal liability.

When DBS Checks Are Required

Anyone teaching, training, instructing, or supervising children under 18 regularly (once a week or more, or 4+ times in 30 days) requires an Enhanced DBS check. This applies to employees, volunteers, and contractors. Even if they only occasionally teach kids' classes, if it's regular or frequent, a DBS check is required.

Enhanced DBS with barred list check is the appropriate level, which checks criminal record, police information, and whether the individual is barred from working with children. Standard DBS is insufficient for working with children.

Application Process and Costs

DBS checks must be applied through a registered body or umbrella organisation. You cannot apply directly unless you're a registered body yourself. Many martial arts governing bodies (UKBJJA, BJJA) offer DBS checking services for members, or you can use commercial umbrella bodies.

The government fee for Enhanced DBS checks is £49.50 (2026). Umbrella bodies typically add an administration fee (£10-£20), bringing total cost to £60-£70 per check. Processing time is typically 2-8 weeks, with 56% of Enhanced checks returned within 24 hours, average 5-6 days, but some taking 8+ weeks if police forces need to be involved.

The DBS Update Service (£16/year subscription) allows portability of DBS checks between employers, potentially saving you the cost of new checks if an instructor already has a current Enhanced DBS with Update Service subscription.

What Enhanced DBS Checks Cover

Enhanced DBS checks include spent and unspent convictions, cautions, reprimands, and warnings held on the Police National Computer, information held by local police forces that's reasonably considered relevant, and whether the individual is on the Children's Barred List (barred from working with children) or Adults' Barred List if applicable.

A criminal record doesn't automatically disqualify someone. You must assess the relevance of offences to the role. However, anyone on the Children's Barred List legally cannot work with children.

Ongoing DBS Obligations

DBS certificates don't expire, but they're a point-in-time check. Best practice is re-checking every 3 years for anyone working with children. Between checks, instructors have a legal duty to disclose any new convictions, cautions, or police investigations. Include this requirement in employment contracts.

If an instructor's DBS reveals concerning information or they're later convicted of an offence, you must assess whether they can continue teaching, particularly in children's classes. Take safeguarding seriously – err on the side of caution and seek advice from your governing body or legal adviser.

Employment Contracts: Essential Terms and Requirements

Providing written terms of employment is a legal requirement. Failure to provide proper contracts creates legal risk and makes disputes more difficult to resolve.

Terms You Must Include

Every employment contract or written statement must include:

  • Employer's name and employee's name
  • Job title or description of work
  • Start date and whether previous employment counts towards continuous service
  • Place of work or confirmation that the employee will work at various locations
  • Salary or wage rate and payment frequency (weekly, monthly)
  • Hours of work including any compulsory overtime
  • Holiday entitlement (minimum 5.6 weeks including bank holidays) and how it's calculated
  • Sick pay entitlement and notification procedures
  • Notice period required from both employer and employee
  • Pension arrangements and auto-enrolment information
  • Details of any probation period
  • Details of any collective agreements affecting terms

From April 2020 reforms, you must also include details of other paid leave (maternity, paternity), training entitlement provided by employer, and any other benefits not covered above.

National Minimum Wage and Living Wage Compliance

Paying below the legal minimum wage is a serious offence with significant penalties. HMRC actively enforces minimum wage law and has increased scrutiny of the fitness and leisure sector.

National Minimum Wage Rates 2026

From 1 April 2026, the rates are:

  • National Living Wage (aged 21 and over): £12.71 per hour (increase from £12.21)
  • National Minimum Wage (aged 18-20): £10.85 per hour (increase from £10.00)
  • National Minimum Wage (aged 16-17 and apprentices): £8.00 per hour (increase from £7.55)

The National Living Wage is the legal minimum for workers aged 21+. Calling it 'living wage' doesn't make it optional – it's legally required. Note that the Living Wage Foundation's 'Real Living Wage' (£13.85 in London, £12.60 elsewhere) is a voluntary higher rate, not a legal requirement.

What Counts as Working Time

Minimum wage applies to all working time, not just class teaching. This includes class teaching time, preparation time if you require it (setting up mats, preparing lesson plans), administrative duties (attendance records, member communications), mandatory training sessions and staff meetings, and travelling between different gym locations if you operate multiple sites (but not commuting to and from home).

A common mistake is paying a flat rate per class without considering total working time. If an instructor is paid £40 for a 1-hour class but must arrive 30 minutes early to set up and stay 30 minutes after for admin, they're working 2 hours. £40 ÷ 2 hours = £20/hour, which complies. But if they're working 2.5 hours total, that's £16/hour – below the National Living Wage of £12.71 for 21+.

Common Minimum Wage Mistakes

These mistakes lead to HMRC enforcement:

  • Flat rate per class without calculating hourly rate: Ensure total payment ÷ total hours (including prep and admin) meets minimum wage
  • Not paying for mandatory training: If you require instructors to attend training, meetings, or CPD sessions, you must pay at least minimum wage for that time
  • Salary sacrifice schemes reducing pay below minimum wage: Deductions for uniforms, DBS checks, or training courses cannot reduce pay below minimum wage
  • Not counting travel time between sites: If an instructor teaches at two of your locations in one day, travel time between them is working time
  • Unpaid trial periods or 'volunteer' arrangements: If someone is working in a role you'd normally pay for, they're a worker entitled to minimum wage even if called a 'trial' or 'volunteer'

Minimum Wage Penalties and Enforcement

HMRC can investigate employers suspected of underpaying minimum wage. Penalties include arrears owed to workers (backdated potentially 6 years), financial penalty up to 200% of the arrears owed (capped at £20,000 per worker), public naming and shaming in HMRC's list of minimum wage offenders (published annually), and criminal prosecution for refusal or persistent failure to pay (unlimited fine).

HMRC has specifically increased scrutiny of the sports and fitness sector. Don't assume you won't be investigated because you're a small gym. Complaints from employees or former employees trigger investigations.

Holiday Pay Entitlement and Calculation

All employees and workers are entitled to paid holiday. Failure to provide holiday pay is a common cause of employment tribunal claims.

Statutory Minimum Holiday Entitlement

The statutory minimum is 5.6 weeks per year. For someone working 5 days per week, this equals 28 days. Bank holidays can be included within the 28 days – there's no separate entitlement to bank holidays unless you provide them in addition to the 5.6 weeks.

Part-time workers receive the same 5.6 weeks, pro-rated to their working pattern. For example, someone working 3 days per week is entitled to 16.8 days (3 days × 5.6 weeks). For irregular hours or part-year workers, holiday accrues as 12.07% of hours worked (equivalent to 5.6 weeks ÷ 46.4 weeks).

Calculating Holiday for Irregular Hours Workers

For instructors with variable hours (common in gyms), use the accrual method: holiday entitlement = 12.07% of hours worked. For example, if an instructor works 10 hours one week, they accrue 1.207 hours of holiday that week. Track this monthly and allow them to take accrued holiday.

From April 2024 reforms, part-year workers (those who only work certain weeks of the year) are entitled to the full 5.6 weeks' holiday, not a reduced amount. This addresses the previous unfairness where, for example, term-time only workers received less holiday entitlement.

Calculating Holiday Pay Rate

Holiday pay must be based on average pay over the previous 52 weeks worked (or the number of complete weeks worked if employed for less than 52 weeks). Include regular overtime, commission, and bonuses in the calculation. Don't just use basic salary if the employee regularly earns more.

For example, if an instructor's basic pay is £15/hour but they regularly work overtime or receive bonuses, averaging £18/hour over the last 52 weeks, holiday pay must be calculated at £18/hour, not £15/hour.

Rules for Taking Holiday

Employers can dictate when holiday is taken (e.g., gym closure periods) provided you give notice at least twice the length of the holiday (e.g., 2 weeks' notice to require 1 week holiday). Employees must be allowed to take their holiday entitlement – you cannot require them to forfeit it or pay in lieu except on termination of employment.

Untaken holiday can be carried over to the next year only if your contract allows it or in specific circumstances (e.g., sick leave, maternity leave). Otherwise, the 'use it or lose it' principle applies, though you must have given the employee reasonable opportunity to take it.

Common Holiday Pay Mistakes

These mistakes lead to tribunal claims:

  • Not providing holiday pay to workers classified as 'contractors': If they're actually workers under employment law (even if self-employed for tax), they're entitled to holiday pay
  • Incorrect calculation of holiday pay: Using basic pay instead of average including regular overtime and bonuses
  • Not allowing holiday to be taken: You cannot pay extra instead of allowing holiday (except on termination)
  • Treating bank holidays as additional to 28 days: Unless your contract specifically provides bank holidays in addition, they're included within the 28 days
  • Pro-rating incorrectly for part-time workers: Use 5.6 weeks × days worked per week, not a daily percentage of 28 days

Pensions Auto-Enrolment Requirements

Workplace pension auto-enrolment is a legal requirement for eligible employees. Non-compliance results in escalating penalties from The Pensions Regulator.

When Auto-Enrolment Applies

You must auto-enrol employees who meet all of these criteria: aged 22 to State Pension age (currently 66), earning £10,000 or more per year (earnings trigger for 2026-27), and usually working in the UK. Earnings are calculated over a pay reference period (weekly, monthly, or annually depending on how you pay them).

For part-time instructors, calculate annualised earnings. Someone earning £250/week works 40 weeks per year = £10,000 annually, meeting the threshold. Don't assess each week in isolation – look at annual earnings.

Employer Pension Obligations

Your obligations include automatically enrolling eligible employees into a qualifying pension scheme, contributing a minimum of 3% of qualifying earnings (employees contribute 5%, total 8%), using a qualifying pension scheme (workplace personal pension, master trust, or occupational scheme), re-enrolling eligible employees every 3 years if they've opted out, and maintaining records and submitting information to The Pensions Regulator.

Employer Pension Contribution Costs

The employer's minimum contribution is 3% of qualifying earnings. Qualifying earnings are earnings between £6,240 and £50,270 per year (2026-27 thresholds). You only pay 3% on earnings within this band, not total earnings.

Example: Instructor earning £25,000 annually. Qualifying earnings = £25,000 - £6,240 = £18,760. Employer contribution = 3% × £18,760 = £562.80 per year (£46.90/month). Example: Instructor earning £15,000 annually. Qualifying earnings = £15,000 - £6,240 = £8,760. Employer contribution = 3% × £8,760 = £262.80 per year (£21.90/month).

For someone earning exactly £10,000 (the threshold), qualifying earnings would be £10,000 - £6,240 = £3,760, so employer contribution would be £112.80/year. This is why the cost is often modest for part-time instructors.

Penalties for Non-Compliance

The Pensions Regulator enforces auto-enrolment with escalating penalties: fixed penalty notice of £400 for initial non-compliance, escalating penalties of £50-£10,000 per day depending on number of employees if non-compliance continues, and potential criminal prosecution for serious breaches. Don't ignore duties to declare compliance or re-enrolment requirements.

Pension Providers for Small Gyms

Recommended low-cost pension schemes for small employers:

  • NEST (National Employment Savings Trust): Government-backed, low fees (0.3% annual charge, 1.8% on contributions), simple online administration, designed for small employers
  • The People's Pension: 0.5% annual charge, no set-up fees, good online portal
  • NOW: Pensions: 0.3% annual charge, straightforward administration

All three are master trusts – you don't need to set up a bespoke pension scheme. Compare fees based on your total payroll, as some charge per member and some charge percentage of contributions.

Statutory Sick Pay and Family Leave Payments

Employees are entitled to various statutory payments during sickness and family leave. Understand your obligations and potential costs.

Statutory Sick Pay (SSP) 2026

From 6 April 2026, significant SSP reforms take effect. SSP is now payable from day one of sickness (previously day 4), at the rate of £123.25 per week or 80% of the employee's average weekly earnings, whichever is lower. The lower earnings limit (previously £123/week) has been removed, widening eligibility significantly.

Employees are entitled to SSP if they're sick for 4 or more consecutive days (including non-working days), earn above the lower earnings limit (removed from April 2026, so now all employees qualify), and have provided notification according to your sickness absence policy. SSP is paid for up to 28 weeks in any period of sickness incapacity.

Small employers (paying under £45,000 Class 1 NI annually) can reclaim SSP paid in excess of employee NICs through the Percentage Threshold Scheme. For most small gyms, SSP costs are modest unless employees have long-term sickness.

Statutory Maternity and Paternity Pay

Eligible employees are entitled to:

  • Statutory Maternity Pay (SMP): 90% of average weekly earnings for first 6 weeks, then £194.32/week for 33 weeks (39 weeks total). Employee must have 26 weeks' continuous service and earn at least £129/week average.
  • Statutory Paternity Pay (SPP): £194.32/week or 90% of average weekly earnings (whichever is lower) for 2 weeks. Employee must have 26 weeks' continuous service.
  • Statutory Adoption Pay: Same as SMP (90% for 6 weeks, then £194.32/week for 33 weeks).

You can reclaim 92% of SMP, SPP, and SAP paid if your total Class 1 NI liability is £45,000 or less in the previous tax year (103% if under £45,000, effectively recovering costs plus 3% compensation for your NI burden). Most small gyms qualify for recovery, so maternity/paternity costs are largely covered.

Company Sick Pay (Optional)

Beyond SSP, some employers offer enhanced company sick pay (e.g., full pay for first 2 weeks, then SSP). This is optional and at your discretion. Many small gyms offer SSP only, which is legally acceptable. Consider the balance between supporting employees and managing costs. If you do offer company sick pay, specify terms clearly in employment contracts to avoid disputes.

Working Time Regulations and Rest Breaks

The Working Time Regulations 1998 set maximum working hours, minimum rest periods, and rest break entitlements.

Maximum working hours: 48 hours per week averaged over 17 weeks (reference period). Workers can opt out by signing an agreement, but you cannot force them to opt out. For most part-time BJJ instructors, this isn't an issue, but full-time staff must be monitored.

Rest breaks: Workers are entitled to 20-minute uninterrupted rest break if working more than 6 hours, 11 consecutive hours rest between working days, and at least 24 hours uninterrupted rest in each 7-day period (or 48 hours in 14 days).

Night work limits: Night workers (those working at least 3 hours during night time on most days) must not work more than an average of 8 hours in each 24 hours over 17 weeks. This rarely applies to gym settings unless you run 24-hour facilities.

For small gyms with part-time instructors, Working Time Regulations usually aren't problematic. They become relevant if employing full-time staff or requiring instructors to work across multiple locations with long hours.

Disciplinary and Grievance Procedures

Following fair procedures for disciplinary action and grievances is essential to avoid unfair dismissal claims.

ACAS Code of Practice

The ACAS Code of Practice on Disciplinary and Grievance Procedures sets out the minimum standards. Employment tribunals consider whether you followed the Code. If you didn't, and the employee wins an unfair dismissal claim, compensation can be increased by up to 25%.

Download the current Code free from acas.org.uk and follow it.

Disciplinary Process for Employees

For poor performance or misconduct, follow these steps:

  1. Informal conversation first: Many issues can be resolved informally. Discuss concerns before formal action.
  2. Investigation: If formal action needed, investigate the facts. Gather evidence, interview witnesses, give employee opportunity to respond.
  3. Invite to disciplinary meeting: Provide written notice, explain allegations, allow employee to bring companion (colleague or union rep), give reasonable time to prepare.
  4. Hold meeting: Present evidence, allow employee to respond, consider their explanation fully.
  5. Decide outcome: No action, verbal warning, written warning, final written warning, or dismissal. Decision must be reasonable.
  6. Confirm in writing: Explain decision, reason, and right of appeal.
  7. Allow appeal: Employee has right to appeal. Hold appeal meeting, reconsider decision.

For gross misconduct (theft, violence, serious safeguarding breach), you can dismiss without notice (summary dismissal), but you must still follow investigation and meeting procedures.

Grievance Process

Employees can raise formal grievances about working conditions, treatment, or concerns. Process:

  1. Receive grievance in writing: Employee should set out complaint clearly.
  2. Investigate: Establish facts, interview relevant parties.
  3. Invite to grievance meeting: Allow employee to bring companion, provide reasonable notice.
  4. Hold meeting: Listen to grievance, ask questions, consider fully.
  5. Decide outcome: Uphold grievance (take action to resolve), partially uphold, or reject.
  6. Confirm decision in writing: Explain outcome and right of appeal.
  7. Allow appeal: If employee appeals, reconsider at appeal meeting.

Common Disciplinary Issues in Gyms

Typical issues requiring disciplinary action include poor performance (ineffective teaching, low member satisfaction), misconduct (lateness, unauthorised absence, inappropriate behaviour), safeguarding breaches (inappropriate contact with students, failing to follow child protection procedures), conflict with other staff or members, and breach of contract (working for competitor in breach of non-compete, disclosing confidential information).

For detailed guidance on handling difficult instructors, see our managing difficult instructors guide.

Termination and Dismissal: Notice Periods and Fair Procedures

Ending employment relationships correctly prevents unfair dismissal claims and legal complications.

Statutory Notice Periods

Statutory minimum notice periods are: less than 1 month service – no notice required (but check contract), 1 month to 2 years service – 1 week notice, and 2 years+ service – 1 week per complete year of service (maximum 12 weeks). For example, someone with 5 years' service is entitled to 5 weeks' notice.

Employment contracts can specify longer notice (e.g., 1 month, 3 months), but not less than statutory minimum. Notice must be the same both ways or longer for employee. For example, you can require 1 month notice from employee whilst providing 3 months to them, but not the reverse.

During notice, the employee remains employed with all rights and must be paid. You can put them on garden leave (paid but not required to work) if contract allows.

Fair Reasons for Dismissal

To fairly dismiss an employee with 2+ years' service, you need a fair reason and must follow fair procedure. Fair reasons include capability (inability to do the job competently), conduct (misconduct or gross misconduct), redundancy (genuine redundancy situation), statutory restriction (e.g., losing right to work in UK), and some other substantial reason (e.g., irreconcilable breakdown in working relationship).

Automatically unfair reasons (dismissal is unfair regardless of service length) include pregnancy or maternity, whistleblowing, trade union membership or activities, asserting statutory rights (e.g., requesting minimum wage), and discrimination (protected characteristics).

Fair Dismissal Procedure

Even with a fair reason, you must follow fair procedure:

  1. Investigation: Establish facts thoroughly.
  2. Disciplinary meeting: Follow ACAS Code (written notice, allow companion, hear employee's case).
  3. Consider alternatives: Could training, redeployment, or warnings resolve issue?
  4. Make decision: Dismissal must be reasonable response in circumstances.
  5. Confirm in writing: Explain reason for dismissal, notice period, final pay date, right of appeal.
  6. Allow appeal: Hold appeal meeting if employee appeals.

For employees with less than 2 years' service, you can dismiss without needing a fair reason (except automatically unfair reasons), but you still must give statutory notice and pay notice period.

Redundancy Process and Pay

Redundancy occurs when the role is no longer needed (e.g., reducing number of instructors due to falling membership). Requirements include genuine redundancy situation (not just performance-based dismissal labelled 'redundancy'), fair selection criteria if choosing between multiple employees, consultation with affected employees (minimum 30 days for 20+ redundancies), consideration of alternative employment within your organisation, and statutory redundancy pay for employees with 2+ years' service.

Statutory redundancy pay: 0.5 week's pay per year for service under age 22, 1 week's pay per year for service age 22-40, and 1.5 weeks' pay per year for service age 41+. Maximum 20 years' service, weekly pay capped at £700 (2026). For example, someone aged 35 with 5 years' service earning £500/week: 5 years × 1 week × £500 = £2,500 statutory redundancy pay.

Unfair Dismissal Claims and Costs

Employees with 2+ years' continuous service can claim unfair dismissal at employment tribunal (1 day service for automatically unfair reasons like pregnancy). If tribunal finds dismissal was unfair, compensation includes basic award (same calculation as statutory redundancy pay, minimum £300) and compensatory award (financial loss suffered, typically 6-12 months' lost wages, capped at £115,115 or 52 weeks' pay, whichever is lower in 2026).

Average unfair dismissal award is £15,000-£20,000, but can exceed £100,000 in serious cases. Legal costs for defending a tribunal claim run £10,000-£30,000 even if you win. Take dismissal seriously and get advice before dismissing anyone with 2+ years' service.

Employer's Liability Insurance: Legal Requirement

If you employ anyone (even part-time, even one person), Employer's Liability Insurance is compulsory by law.

Legal requirement: Minimum £5 million coverage (£10 million+ recommended). You must display the certificate at your workplace where employees can see it. Compulsory for all employers except very limited exceptions (family businesses employing only close family).

What it covers: Compensation for employees injured at work, illnesses caused by work (e.g., repetitive strain), legal costs for defending claims, and associated legal expenses.

Cost: For small gyms with 1-5 employees, typically £150-£400 per year. Costs vary based on number of employees, nature of work (BJJ instruction is moderate risk), and claims history. Some insurers offer combined public liability and Employer's Liability packages.

Penalties for non-compliance: £2,500 per day fine for not having valid insurance, and £1,000 fine for not displaying certificate at workplace. You also face unlimited personal liability for employee injury claims if uninsured.

For comprehensive gym insurance guidance including public liability, professional indemnity, and Employer's Liability, see our gym insurance requirements guide.

Data Protection and GDPR for Employee Information

Processing employee personal data must comply with UK GDPR and Data Protection Act 2018.

Employee personal data includes: Names, addresses, contact details, National Insurance numbers, tax codes, bank details, DBS check results (particularly sensitive), health information (sick notes), and performance and disciplinary records.

Your obligations: Process data lawfully (employment contract provides lawful basis for most employee data), keep data secure (encrypted storage, access controls, secure disposal), only retain data as long as necessary (HMRC requires 6 years for payroll records, DBS information must be destroyed after decision unless Update Service used), and respect employee rights (access, correction, deletion in some circumstances).

Employee privacy notice: Provide a privacy notice explaining what data you collect, why, how it's used, who it's shared with (HMRC, pension provider, insurers), how long it's kept, and their rights. Template privacy notices available from ICO.

DBS information: Criminal record data is particularly sensitive. Store DBS certificates securely, limit access to need-to-know basis only, and destroy certificates once recruitment decision made (unless employee subscribes to Update Service and consents to you checking it).

For comprehensive data protection guidance, see ICO resources at ico.org.uk/for-organisations/.

Common Employment Law Mistakes and How to Avoid Them

Learn from others' costly errors. These are the most common employment law mistakes gym owners make:

  1. Treating employees as contractors (IR35 risk): If you control when, where, and how they work, they're likely employees regardless of paperwork. Consequence: Back-tax, NI, penalties. Prevention: Use HMRC CEST tool, assess actual relationship. See our contractor vs employee guide.
  2. No written contracts or incomplete contracts: Legal requirement to provide written terms. Consequence: Disputes, tribunal claims, penalties. Prevention: Use comprehensive template, get legal review.
  3. Not doing right to work checks: Must check before first day. Consequence: £20,000 fine per illegal worker, criminal prosecution. Prevention: Check List A or List B documents, use online checking for settled status, keep copies.
  4. Not providing holiday pay: All employees and workers entitled to 5.6 weeks. Consequence: Tribunal claims, arrears payment. Prevention: Track holiday accrual (12.07% for irregular hours), ensure workers take holiday.
  5. Not auto-enrolling into pension: Required for employees earning £10k+ aged 22+. Consequence: Fixed £400 penalty, then £50-£10k/day escalating. Prevention: Set up workplace pension, auto-enrol eligible employees.
  6. Unfair dismissal (no procedure followed): Must follow ACAS Code. Consequence: Tribunal compensation £15k-£20k average, legal costs £10k-£30k. Prevention: Investigate, hold meetings, allow appeals, get advice for complex cases.
  7. Minimum wage underpayment: All working time must be paid at minimum wage. Consequence: Arrears, 200% penalty, naming and shaming. Prevention: Calculate hourly rate including prep/admin time, ensure it exceeds £12.71/hour for 21+.
  8. No Employer's Liability Insurance: Compulsory if you have employees. Consequence: £2,500/day fine, unlimited personal liability. Prevention: Buy insurance (£150-£400/year), display certificate.
  9. Not keeping employment records: HMRC requires payroll records for 6 years. Consequence: Inability to defend claims, HMRC penalties. Prevention: Keep contracts, payslips, holiday records, sickness records, disciplinary records.
  10. Making deductions from pay without consent: Cannot deduct for uniforms, training, or DBS if it reduces pay below minimum wage. Consequence: Unlawful deduction claims. Prevention: Get written consent, ensure deductions don't breach minimum wage.

Related Guides

Frequently Asked Questions

Do I need a written contract for BJJ instructors in the UK?

Yes. You must provide written terms of employment on or before an employee's first day of work. This can be a comprehensive employment contract (recommended) or a written statement covering all statutory terms. The contract must include job title, salary, hours, holiday, sick pay, notice period, pension, and other key terms. Failure to provide written terms can result in tribunal compensation and makes disputes harder to resolve.

What's the difference between employee and contractor for tax purposes?

Employees have tax deducted via PAYE, you pay 15% employer's National Insurance on their earnings above £5,000 annually, and they have employment rights. Contractors are responsible for their own tax via Self Assessment, you don't pay employer's NI, and they have minimal employment rights. However, IR35 rules mean the actual working relationship determines status, not what you call it. Use the HMRC CEST tool to assess status correctly.

What are the penalties for not doing right to work checks?

Civil penalty up to £20,000 per illegal worker (£15,000 first breach, £20,000 subsequent), potential criminal prosecution if HMRC believes you knew the person had no right to work (unlimited fine and/or imprisonment), and public naming in HMRC's illegal working enforcement list. You must check and copy acceptable documents before the first day of work. For EU/EEA citizens with settled status, use the online share code checking service.

Do part-time gym instructors get holiday pay?

Yes. All employees and workers are entitled to 5.6 weeks' paid holiday annually, pro-rated for part-time hours. For irregular hours, holiday accrues at 12.07% of hours worked. For example, an instructor working 15 hours per week is entitled to 84 hours holiday per year (15 hours × 5.6 weeks). You must allow them to take holiday and pay them for it – you cannot pay extra instead except on termination.

When do I need to auto-enrol instructors into a pension?

You must auto-enrol employees who are aged 22 to State Pension age, earning £10,000 or more annually, and usually working in the UK. Calculate earnings on an annualised basis for part-time workers. For example, someone earning £250/week for 40 weeks = £10,000 annually, meeting the threshold. You contribute a minimum 3% of qualifying earnings (£6,240-£50,270 band), they contribute 5%, total 8%.

Can I dismiss an instructor without warning in the UK?

Only for gross misconduct (serious offences like theft, violence, or severe safeguarding breach), and even then you must follow fair procedure – investigate, hold disciplinary meeting, allow right to respond and appeal. For employees with 2+ years' service, you need a fair reason and fair procedure to avoid unfair dismissal claims (compensation averages £15k-£20k). For performance or minor misconduct, use warnings first. Get legal advice before dismissing anyone with 2+ years' service.

What's the minimum wage for gym instructors in the UK?

From 1 April 2026, the National Living Wage for workers aged 21+ is £12.71 per hour. For 18-20 year olds, it's £10.85/hour. For 16-17 year olds and apprentices, it's £8.00/hour. This applies to all working time including class teaching, preparation, admin, and mandatory training. Calculate total hours worked and ensure payment ÷ hours meets minimum wage. Penalties for underpayment include arrears, 200% fine, and public naming.

Do I need Employer's Liability Insurance for one instructor?

Yes. Employer's Liability Insurance is compulsory by law if you employ anyone, even one part-time instructor. Minimum coverage £5 million (£10m+ recommended). Cost typically £150-£400/year for small gyms. You must display the certificate where employees can see it. Penalties for non-compliance: £2,500 per day fine for no insurance, £1,000 fine for not displaying certificate, plus unlimited personal liability for employee injury claims.

How do I know if IR35 applies to my gym instructors?

IR35 applies if an instructor works through a limited company but the relationship would be employment if hired directly. Most small gyms (under £15m turnover) are exempt from off-payroll rules, meaning contractors are responsible for their own IR35 determination. However, you could still owe employer's NI if HMRC later deems the relationship employment. Use the HMRC CEST tool to assess. Key factors: do you control when, where, how they work? Can they send substitutes? Do they work only for you? See our contractor vs employee guide for full IR35 compliance.

What are my obligations if an instructor takes sick leave?

From April 2026, you must pay Statutory Sick Pay from day one of sickness (not day 4) at £123.25/week or 80% of average weekly earnings, whichever is lower. The lower earnings limit has been removed, so all employees qualify. SSP is paid for up to 28 weeks. Employees must notify you according to your sickness policy. Small employers can reclaim SSP costs through the Percentage Threshold Scheme if total Class 1 NI is under £45,000 annually.

Ensure you're compliant from day one

Review our hiring guide for the complete recruitment process, or explore compensation models that meet minimum wage requirements and attract quality instructors.

Hire Compliantly

Last updated: 4 February 2026

employment law uk legal requirements contractors vs employees minimum wage holiday pay pensions dismissal IR35 right to work DBS checks