In this article we preview the changes to employment law forthcoming in 2021 and look at the most important cases to look out for during the year
- IR35: This is the big one for 2021. After a year’s delay owing to coronavirus, off-payroll working rules are finally coming to the private sector on 6 April 2021. By now, most companies have completed their internal review of how IR35 will affect them, if you have not, you have just over three months to prepare.
- Covid-19: the Coronavirus Job Retention Scheme (furlough scheme) is currently due to end on 30 April 2021. We should find out during the Budget on 3 March 2021 if this is to be extended.
- Post-employment notice pay: for those who have had the unbridled joy of calculating post-employment notice pay, usually provided for in settlement agreements, you will be pleased to hear that further changes are afoot. The changes relate to situations where an employee's pay period is defined in months, but the contractual notice period is expressed in weeks. This often provides an incorrect calculation which can be detrimental to employees. Additional changes are to be made in relation to non UK residents.
- Employment Bill: Whilst we are still awaiting a date for the implementation of this Bill, we expect it to be pushed through in 2021. The Bill includes a number of changes to UK employment law including the right for individuals on zero hour contracts to receive “stable” contract after 26 weeks' service, an extension of six months redundancy protection for women following return from maternity leave and a new right to “neonatal leave and pay”, to support parents of premature or sick babies.
- National Minimum Wage: As per the normal annual process, the Living Wage and National Minimum Wage are due to increase on 6 April 2021.
Royal Mencap Society v Tomlinson-Blake
We have been awaiting the judgment on this matter for nearly a year now and the first quarter of 2021 should finally provide us with answers. The case relates to workers on sleep-in shifts, and whether they are only entitled to the National Minimum Wage for hours in which they were required to be awake for the purposes of working, not for the whole shift (some of which may be spent asleep). This case will have huge ramifications for the care industry and we will be keeping a close eye on the outcome.
Should employees in supermarkets be entitled to equal pay to individuals based in distribution depots? This equal pay claim, heard on 13 and 14 July 2020, is about to give us the answer.
Holiday pay has not gone away. This original decision, arising from the Northern Ireland Court of Appeal (NICA) will be heard by the Supreme Court on 23 and 24 June 2021. The case relates to the significance of a break in a "series of deductions" where a period of more than three months has elapsed between the deductions. The UK currently states that a break of three months or more is fatal to historic holiday pay claims. Northern Ireland’s position is that is not. Judgment is likely to be received in the second half of 2021. Any judgment is likely to be short lived, however, as it is rumoured that holiday pay regulations are one of the areas that the Government is looking to change now that Brexit has been finalised.
Are Uber drivers workers or self employed? In a case that could decide the future of Uber in the UK, we are currently awaiting the judgment from the Supreme Court hearing heard on 21 and 22 July 2020. We expect a judgment in the next 4-5 months.
On the horizon
Whilst the above statutory changes are already written into law, a number of amendments to UK employment law are still being considered and under review. Below we have cherry picked the most interesting changes. Note that some of these changes may never become law, however they are being seriously considered by the Government.
- Post-termination non-compete clauses: Consultations are ongoing (closing 26 February 2021), on proposals to require employers to pay compensation to employees for the duration of a post-termination non-compete clause. In addition, views are being sought as to the introduction of a statutory limit on the length of non-compete clauses and/or banning the use of post-termination non-compete clauses altogether.
- Extending ban on exclusivity clauses: Exclusivity clauses are already banned in zero hour contracts, however this consultation seeks to extend that ban to those earning under the Lower Earnings Limit, currently £120 a week. This would prevent employers from contractually restricting low earning employees from working for other employers.
- Extension of limitation periods: Currently most employment tribunal claims must be filed within three months of an event occurring. Discussions are taking place to extend that period in cases of sex discrimination/harassment and maternity/pregnancy cases to six months.
- Making flexible working the default: This will be music to the ears of those who have become used to working from home over the past year. The Conservative party's election manifesto included a promise to consult on making flexible working the default position unless an employer has a good reason. Whether the contents of a manifesto makes it into law may be a completely different question.
These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.