Employment Law – What to expect in 2021 and beyond

Employment law presents challenges every year.  In 2020 we all had to get to grips with the new concept of furlough, and deal with the other HR challenges posed by the outbreak of COVID-19.  The impact of the pandemic has meant that many key employment changes that were expected to take place last year, have been delayed.  This includes the Employment Bill, which was announced in the Queen’s Speech in December 2019.   There are no current indications as to when the Bill may be expected.  However, the measures expected under the Bill are wide-ranging and include, amongst other things:

• the right to request a more predictable contract after 26 weeks’ service, for those that do not have a fixed working pattern, for example zero-hours workers;
• payment of all tips and service charges to go to workers;
• to extend redundancy protection for pregnant employees (see below);
• a new right to neonatal leave and pay (see below); and
• a week’s leave for unpaid carers (see below).

As well as the understandable distractions of managing the pandemic, Brexit may be playing a part in the delay with the Employment Bill as ministers have been considering whether further, more wide-reaching changes, should be made to employment rights. For more on the potential changes that Brexit could bring about please see our article here.

LEGISLATION

Neonatal leave and pay

On 16 March 2020, the Government published its response to a consultation on neonatal leave.

It proposed the introduction of statutory neonatal leave for parents of babies in neonatal care.  This right will apply from day one of employment.  It is anticipated that the leave will be taken in blocks of one or more weeks, with the right to leave for every week the parents’ baby is in neonatal care, subject to a cap of 12 weeks.  Statutory neonatal pay will be available to those employees who have 26 weeks’ continuous service and who earn above the minimum earnings threshold.

The proposal is for neonatal leave to be taken after maternity and paternity leave.

It is possible that this will not now be implemented until 2023.

Leave for unpaid carers

Also, on 16 March 2020, consultation was opened seeking views on the Government’s proposals to give employees who are unpaid carers the right to one week’s unpaid leave per annum.

The consultation sought views on whether there should be a qualifying period of service for eligibility, the purpose of the leave and evidential and notification requirements.

Consultation closed on 3 August.  A response is still awaited.

Off-payroll working rules – IR35

We reported in May 2019 that changes to the off-payroll working rules (otherwise known as IR35) would be extended to medium and large businesses in the private sector, following their introduction in the Public Sector.  See our article here for more information.  The changes were due to come into force on 6 April 2020, however due to the COVID-19 pandemic implementation was postponed and  these will now be effective from 6 April 2021.  Although we are still in the throes of the pandemic there are no indications that implementation will be delayed further.

For those medium and large businesses which engage individuals via a personal service company, it is essential that an assessment is carried out to determine whether the new rules apply, and the if service provider is a “deemed employee” and if so for appropriate tax and NI to be deducted at source.     

Post termination restrictive covenants

On 4 December, a consultation paper was issued on measures to reform post termination restrictions (e.g. non-compete and non-solicitation of clients).

The Government is considering altering the law so that post-termination restrictions will only be enforceable if the employer continues to pay remuneration during the period of the restriction and perhaps introducing a statutory limit on the length of the restrictive covenant in conjunction with this, or even banning them completely.  Given that employers can have a legitimate interest to protect, we consider it is extremely unlikely that organisations would opt for a complete ban.

The consultation closes on 29 February 2021.  Responses can be submitted online here.

Post termination payments

On 6 April 2021, a revision to the formula for calculating post-employment notice pay (PENP) will come into effect.  An employer is required to carry out a PENP calculation when an employee is receiving a relevant post termination award and is being paid in lieu of all or part of their notice.

The new formula will be for use where an employee is paid monthly, but their contractual notice period or post-employment notice period is not a whole number of months. Instead of using the number of days in the pay period, it provides that 30.42 (being the mean average number of days per month) can be used as ‘P’ in the PENP calculation.

The aim is to avoid unintended unfair outcomes.

POTENTIAL DEVELOPMENTS TO LOOK OUT FOR

Redundancy protection for women and new parents

The Government has expressed an intention to expand redundancy protection for pregnant women (from the date they notify their employer of their pregnancy), and new parents, in its Employment Bill, although this has not yet been brought forward, as mentioned above.

However, on 8 July 2020, a Private Member’ Bill was reintroduced into Parliament.  If passed, it will prohibit redundancy during pregnancy and six months after pregnancy or maternity leave, except in specified circumstances.

The date for the second reading of the Bill has yet to be announced.

Sexual Harassment

On 9 July 2020, the Government launched a consultation on measures to protect employees from sexual harassment in the workplace.  The proposals included introducing a mandatory duty on employers to prevent harassment and extending the time limit for lodging a discrimination claim from three months to six.  Consultation closed on 2 October 2020. 

Ethnicity pay reporting

In 2018 the Government launched consultation on the introduction of ethnicity pay reporting, akin to the gender pay gap reporting.  A response is still awaited,  although, the BBC reported on 19 December 2020 that they had obtained a document indicating that 73% of respondents were in favour of compulsory ethnicity pay gap reporting.

Case Law

A few key cases to look at for are:

Working Time

We are awaiting the Supreme Court judgment in Royal Mencap Society v Tomlinson-Blake, which heard the appeal on the Court of Appeal’s decision that workers on sleep-in shifts, were only entitled to the National Minimum Wage for hours that they were awake and carrying out their duties.

Holiday Pay

On 22 June 2021 the Supreme Court will hear the appeal in Flowers and others v East of England Ambulance Trust, on the Court of Appeal’s decision that regular voluntary overtime should be included when calculating holiday pay.  This is awaited with interest as it could be an opportunity for the Supreme Court to depart from EU law.

On a different issue, on 23 and 24 June 2021, the Supreme Court will hear the appeal in Chief Constable of the Police Service of Northern Ireland and another v Agnew and others.  This is on the decision of the Northern Ireland Court of Appeal (NICA) which diverged from the position in Great Britain on the approach of historical holiday pay claims.  Currently where a period of three months or more has elapsed, this will break the chain of deductions for the purposes of holiday pay claims.  However, the NICA ruled that a series of unlawful deductions would not be interrupted by gaps of more than three months.  A Supreme Court ruling would be binding throughout the UK.

Lastly, on 9 November 2021, the Supreme Court is to hear the appeal in Harpur Trust v Brazel on the appropriate calculation of annual leave for part-year workers.

RATES AND LIMITS

The increases in the statutory rates and limits are below.  The amount of a ‘week’s pay’ which is used to calculate, amongst other things, statutory redundancy payments has yet to be announced. The adult rate for NMW will only apply to 21 and 22 year olds from April and the NLW will apply from aged 23 upwards.

National Minimum Wage

Other Statutory Payments

We will report on further developments as the year progresses.