Whilst COVID-19 will continue to dominate the headlines for the time being, we hope that the national vaccination programme will help us all to return to some form of normality in 2021.
In the meantime, we are taking the opportunity in this blog to look at what to expect in the year ahead.
Employment law in 2021
A new norm?
Amidst the disruption of 2020, many organisations were forced to embrace large-scale agile working in a way that they had never done previously. Having adapted successfully to agile working, some employers have already announced that they will not be returning to a conventional office-based model of working. It remains to be seen how many employers will follow suit and whether we will ever witness a full return to the traditional office ‘9 to 5’.
Brexit
The UK’s new relationship with the EU began on 1st January 2021.
Broadly speaking, all pre-Brexit case law of the European Court of Justice (ECJ) made before 1st January 2021 continues to be binding on Courts and Tribunals (although certain Courts, such as the Supreme Court, can depart from it). As from 1st January 2021, however, the UK’s Courts and Tribunals are not required to follow new decisions of the ECJ, but may have regard to them.
As from 1st January 2021, the new points-based immigration system applies to EU nationals. Employers will need to understand how the new system will affect recruitment and whether they need to apply for a sponsor licence. Employers should also remind European Economic Area employees to apply for settled or pre-settled status, if they have not already done so.
Coronavirus Job Retention Scheme (CJRS)
The CJRS is due to close on 30th April 2021. We do not yet know whether the Government’s Job Support Scheme and/or Job Retention Bonus Scheme will be introduced (and, if so, in what form), having been postponed when the CJRS was extended in November 2020.
Changes to statutory rates and limits
Annual changes to certain statutory rates and limits will apply from the beginning of April 2021.
Under current plans, the age at which employees are entitled to the National Living Wage (NLW) will drop from 25 to 23 years. The NLW and National Minimum Wage (NMW) rates are expected to be as follows:
- NLW will increase from £8.72 per hour to £8.91 per hour (for those aged 23 and over);
- NMW 21 to 22 year old rate will increase from £8.20 per hour to £8.36 per hour;
- NMW 18 to 20 year old rate will increase from £6.45 per hour to £6.56 per hour;
- NMW 16 to 17 year old rate will increase from £4.55 per hour to £4.62 per hour; and
- NMW apprentice rate (for those aged under 19 or in their first year of an apprenticeship) will increase from £4.15 per hour to £4.30 per hour.
It is also expected that:
- The weekly rate of statutory sick pay (SSP) will increase from £95.85 to £96.35;
- The weekly rate of statutory maternity pay (SMP) and maternity allowance will increase from £151.20 to £151.97;
- The weekly rate of statutory paternity pay (SPP) will increase from £151.20 to £151.97;
- The weekly rate of statutory shared parental pay (SHPP) will increase from £151.20 to £151.97; and
- The weekly rate of statutory adoption pay (SAP) will increase from £151.20 to £151.97.
April 2021 will also see changes to Employment Tribunal awards limits (e.g. the limit on ‘a week’s pay’ for certain purposes, statutory redundancy payments and unfair dismissal compensation), as well as the annual review of the Vento bands (relating to injury to feelings awards).
Changes to IR35 in the private sector, postponed by 12 months due to COVID-19, will come into force on 6th April 2021. These rule changes will shift responsibility for determining the status of a contractor, and liability for deducting income tax and National Insurance contributions (if IR35 applies), to the hiring organisation.
Certain technical changes to the calculation of Post-Employment Notice Pay will also take effect on 6th April 2021.
Gender and ethnicity pay gap reporting
2021 should witness the return of gender pay reporting, although calculations may be complicated by the CJRS (with the ‘snapshot’ date for reporting falling approximately two weeks after lockdown began). Therefore, it may not be until 2022 that we get an accurate picture of the state of the gender pay gap.
Whilst consultation on the issue closed two years ago in January 2019, the introduction of ethnicity pay gap reporting remains a possibility. An online petition reached the necessary 100,000 signatures for it to be considered for debate by Parliament in spring 2020, and the Black Lives Matter movement continues to highlight issues of equality and diversity.
Government consultation on post-termination non-compete clauses in employment contracts
The Government has launched a consultation on measures to reform post-termination non-compete clauses in employment contracts. The consultation seeks views on proposals to require employers to continue paying compensation to employees for the duration of a post-termination non-compete clause, requiring employers to confirm in writing to employees the exact terms of a non-compete clause before their employment commences, introducing a statutory limit on the length of non-compete clauses, or banning the use of post-termination non-compete clauses altogether.
The consultation closes on 26th February 2021.
The Taylor Review and Good Work Plan
Many significant issues arising from the Taylor Review and the Good Work Plan remain outstanding. These include the Government’s plan to legislate to increase the period required to break continuity of employment from one week to four weeks and address the perennial issue of employment status.
We await the Government’s full response to the consultation that took place in 2018.
The Employment Bill introduced in the Queen’s Speech in December 2019 signalled an intention to address a number of other issues arising from the Good Work Plan, including:
- The creation of a single labour market enforcement agency;
- A requirement for employers to ensure all tips and service charges are passed to workers;
- The introduction of the right to request a more predictable contract;
- The extension of redundancy protection rights for pregnant employees and new parents; and
- Making flexible working the default position unless employers have a good reason not to (subject to consultation).
Broadly speaking, however, the timescales for the necessary consultations and implementation remains unknown.
How Nelsons can help
Peter Nicholson is a Senior Associate in our specialist Employment Law team.
For further information in relation to the subjects discussed in this article, please contact Peter or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online enquiry form.