Employment Horizon Scanning

Coronavirus Job Retention Scheme (Furlough)

The Chancellor in his Spring Budget has extended furlough until the end of September 2021. Employees will continue to receive 80% of their current salary for hours not worked. There will be no employer contributions beyond National Insurance contributions (NICs) and pensions required in April, May and June. From July, the government will introduce an employer contribution towards the cost of unworked hours of 10% in July, 20% in August and 20% in September, as the economy reopens. HMRC has published updates to multiple guidance documents contained within its Coronavirus Job Retention Scheme collection and the Treasury has issued a new (seventh) direction in respect of the period 1 May to 30 September 2021. The Times reported in June 2021 that despite calls from business leaders to further extend furlough these have been rejected.

Gender pay gap reporting and furlough

The EHRC has confirmed that enforcement action against employers failing to report their gender pay gap will not start until 5 October 2021. However, the EHRC encouraged employers to report their gender pay gap data for 2020/21 on time if they can. Government Equalities Office information on the Gender Pay Gap confirms how periods of furlough will be addressed. See the section on when to exclude full-pay relevant employees in the note on data which must be gathered.

Right to work checks during the COVID-19 pandemic

The adjusted right to work checks introduced by the Home Office during the COVID-19 pandemic were due to come to an end on 20 June 2021 but this deadline has now been extended. The temporary COVID-19 adjusted right to work checks will now end on 31 August 2021, and from 1 September 2021 employers will revert to face to face and physical document checks as set out in legislation and guidance. Home Office guidance has been updated.

Brexit – UK/EU Trade and Cooperation Agreement

This agreement governs the UK-EU trading relationship from 1 January 2021 and provides that employment rights are not to be reduced from current levels in a way that impacts on trade. This means that the UK will need to maintain the standards in its legislation as they stood in December 2020, when harmonised to a large extent with EU law. Future departures from these standards will result in the re-balancing mechanisms being applied. This makes it highly unlikely that we will see the 'bonfire of employment rights' which some had predicted, including sweeping changes to TUPE or removal of working time protection as these areas could well be seen to affect trade or investment.  Although it had been widely reported that BEIS was reviewing EU worker protections, BEIS has now confirmed that this will not go ahead. In June 2021 BEIS confirmed that it was “absolutely” the intention not to degrade workers’ rights in the post-Brexit economy.

Commitments in the Northern Ireland protocol to equality protection may lead to continued interpretation of CJEU decisions being applied there, although not across GB.

More information is available in Pinsent Masons' resources hub on Brexit

Immigration in 2021

More information coming soon about how immigration law in the UK will change in 2021.

National living wage increases

The following increases were effective from 1 April 2021:

• national living wage will apply to individuals aged 23 and over and will rise from £8.72 to £8.91;

• national minimum wage changes include: age 21 to 22 rate increases from £8.20 to £8.36/ age 18 to 20 rate increases from £6.45 to £6.56/ age 16 to 17 rate increases from £4.55 to £4.62/ apprentice rate increases from £4.15 to £4.30.

ET compensation limit increases

The following annual increases were effective from 6 April 2021:

• a week's pay - £544 (currently £538)

• unfair dismissal compensatory award - £89,493 (currently £88,519)

The Vento bands for injury to feelings awards are now:

• £900 to £9,100 for the lower band

• £9,100 to £27,400 for the middle band

• £27,400 to £45,600 for the upper band

• £45,600 and above for the most exceptional cases

Off-payroll working in the private sector

Where an individual contracts through a personal service company, the liability for making the employment status assessment and applying PAYE no longer rests with the PSC (effective 6 April 2021) but shifts up the chain to the end user or the agency or other intermediary, if there is one.

Statutory payment annual increases

From 12 April 2021 the following increases applied:

• statutory sick pay - £96.35 (currently £95.85)

• statutory maternity pay - £151.97 (currently £151.20)

• statutory paternity pay - £151.97 (currently £151.20)

• statutory shared parental pay - £151.97 (currently £151.20)

• statutory adoption pay - £151.97 (currently £151.20)

Workers to get H&S detriment protections

Workers will have the right not to be subjected to any detriment by their employer for leaving, or refusing to return to, their workplace or for taking steps to protect themselves both in circumstances of danger which the worker reasonably believes to be serious and imminent.

Trade union regulator to be modernised

BEIS announced plans to implement the remaining parts of the Trade Union Act 2016 which give the Certification Officer additional powers. Included in the plans are powers for the Certification Officer to:

• respond to third party concerns that a TU may have breached its statutory duties. This means that employers (not just TU members) could ‘report’ a TU to the regulator, in certain specific circumstances
• initiate their own investigation if a breach is suspected
• apply financial penalties to TUs of up to £20,000 where the most serious breaches occur

The Certification Officer will also be funded by a levy on the organisations it oversees (capped at 2.5% of a TU’s annual income although smaller organisations will be exempt).

New single enforcement body for employment rights

BEIS confirmed that it will go ahead with its proposal for a new single enforcement body with a remit to tackle modern slavery, enforce the minimum wage and protect agency workers. The new body will be a “one stop shop” that will replace the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate and HMRC’s National Minimum Wage Enforcement. The new body will also have a new ability to ensure vulnerable workers get their holiday pay and statutory sick pay without having to go through an employment tribunal process. The creation of this new body will most likely need to await the Employment Bill (see below). Read more: UK creates workers’ watchdog to protect and enforce rights

Scottish disclosure – regime overhaul

Changes to disclosure legislation include replacing the four existing levels of disclosure and the 10 different associated products with two main 'levels'. Criminal offences are also created for individuals who carry out or attempt to carry out a “regulated role” without being a PVG Scheme member. A parallel offence is in place for any organisation that offers a 'regulated role' to an individual without first establishing that they are a PVG Scheme member by carrying out a Level 2 search. The regulated role is a new concept which replaces 'regulated work'.

Enterprise Act 2016 - changes to shop workers' rights

Schedule 5 of the Enterprise Act 2016 will amend the Employment Rights Act 1996 (ERA), and will strengthen shop workers rights in relation to Sunday working.

Low Pay Commission consultation 2021

The Low Pay Commission is seeking evidence on the effects of the National Living Wage and National Minimum Wage to inform its 2022 rate recommendations. The LPC is seeking evidence on the effects on employers and workers of recent increases, including views on the economic outlook in light of the pandemic. In particular, they are looking for views on:

• the current central projection for a proposed April 2022 NLW rate increase to £9.42 (with a likely range of 7 pence above or below); and

• the current central projection for a proposed April 2024 NLW rate increase to £10.33 (with a likely range of 23 pence above or below). The NLW age threshold is also due to be reduced to 21 by 2024.

Equality and diversity

In December 2020, Liz Truss, Minister for Women & Equalities set out a new equality strategy with a move towards a focus on social mobility. The impact of this initial strategy statement will become clearer as the government further develops its position and businesses and interest groups consider and make public their response.

Employment Bill

In the Queen's speech in December 2019 the government announced its intention to bring forward an Employment Bill containing the following provisions:

• creating a new single enforcement body for employment rights (see above);

• offering greater protections for workers (following the 2019 Good Work Plan consultation on a single enforcement body which encompasses tribunal/ court practice and procedure; NMW, sick pay; health & safety, although the government is yet to formally respond);

• ensuring that tips left for workers go to them in full;

• introducing a new right for all workers to request a more predictable contract. This follows the 2019 Good Work Plan consultation on one-sided flexibility in the gig economy which encompassed reasonable notice of work schedules and compensation for cancelled shifts, although the government is yet to formally respond;

• extending redundancy protections to prevent pregnancy and maternity discrimination so that women have a preferential right to any suitable available vacancy while pregnant or on maternity leave and for six months on their return. There will be new adoption leave and shared parental leave redundancy protections too. This follows the government's response to the 2019 Good Work Plan consultation on pregnancy and maternity discrimination; 

• allowing parents 12 weeks neonatal pay and leave. This follows the government's partial response to the 2019 Good Work Plan consultation on proposals to support families; 

• introducing an entitlement to one weeks leave for unpaid carers;

• subject to consultation expected this year, the Bill will make flexible working the default unless employers have good reason not to.

• protecting and enhancing workers’ rights as the UK leaves the EU; and

• building on existing employment law with measures that protect those in low-paid work and the gig economy.

It was reported in February 2021 that the Bill would be delayed until at least the end of 2021. There was only a vague reference in the May 2021 Queen’s Speech to proposals that “will be brought forward to create and support jobs and improve regulation” but no specific mention of the Employment Bill. In May 2021 BEIS wrote to Parliamentary Committees that the Employment Bill “will be introduced when the time is right, not while the pandemic is ongoing and continuing to affect the economy and the labour market in sometimes unpredictable ways”

Flexible working

As employers work through proposals for hybrid working arrangements, both employers and employees are seeking to build in flexibility to new arrangements. There are proposals in the Employment Bill to make flexible working the default unless employers have a good reason for this not to apply, but we don’t know what that will look like yet. The government restarted the Flexible Working Taskforce in February 2021. The Taskforce brings together business, organisations such as the CIPD and government to consider the issues and make proposals. Consultation is expected this year.

Carers’ Leave

The government consulted on its proposal for a new right which would allow qualifying employees to take a week of unpaid leave each year to provide care. The response is awaited

Good Work Plan: protecting continuous service

The government agreed in the 2018 Good Work Plan to legislate to increase the break in employment needed to break continuity of employment from one week to four weeks, allowing more employees to gain access to employment rights. In June 2021 BEIS restated this commitment. It is likely to appear in the Employment Bill.

Good Work Plan: proposals to support families

The government has partially responded to 2019 three chapter consultation on:

• reforming parental leave to achieve greater balance (no formal response),

• entitlements for parents of babies requiring neo-natal care (response given), and

• transparency relating to flexible working hours and family-related pay & leave (no formal response).

Aspects of these will be introduced in the Employment Bill (see above).

'Health is everyone’s business'

A 2019 government consultation aimed at making it easier for disabled people to stay in work and find work; and consulted on proposals to reduce ill health-related job loss. New statutory guidance is likely, and SSP may change to make phased returns easier. The government has said that it will respond shortly.

References

Non-compete clause consultation

Exclusivity clauses in contracts of employment consultation

Human rights reviews

Disability employment gap

Ethnicity pay gap reporting

Sexual harassment in the workplace

The government's 2019 consultation asked:

• whether there should be a specific duty for employers to prevent harassment, and what more could be done to ensure that employers do take all reasonable steps to prevent harassment, including consideration of whether transparency on figures is desirable;

• whether the current regime provides protection from harassment by third parties; and whether more is required in terms of protecting interns and volunteers.

• whether the three-month time limit for bringing harassment claims before an ET should be extended.

Consultation on confidentiality clauses (NDAs)

The government's 2019 consultation asked a range of questions in relation to the use of employee confidentiality clauses. The consultation sought responses on any NDA clause in an employment context, regardless of whether it is in a settlement agreement, contract of employment or elsewhere. It covered a variety of matters including:

• whether disclosures to the police and other, as yet unspecified, organisations should always be permitted;

• how to ensure clarity for workers as to the limits of confidentiality clauses;

• appropriate enforcement of any limits set.

Domestic abuse and workplace support

Good Work Plan

The government committed to take "forward virtually all the recommendations" in the 2017 Taylor Review on modern employment practices in its 2018 Good Work Plan. Many of the proposals have been implemented or have been signaled for inclusion in the Employment Bill (see above). Outstanding proposals include:

• extending the time required to break a period of continuous service - from one week to four weeks; and

• aligning the employment status frameworks for the purposes of employment rights and tax.

EU Pay Transparency Directive

In March 2021 the EU proposed a Directive aimed at ensuring that the right to equal pay is upheld across the EU. It would establish pay transparency standards to make it easier for workers to claim their right to equal pay. If adopted Member States would have two years to implement it in national law.

Disclosure changes in England and Wales

Overhaul of whistleblowing legislation

EU Whistleblowing Directive

Dismissal and re-employment

This private member's bill seeks to prohibit employers from dismissing and re-engaging employees "for the purpose of diminishing the terms and conditions of employment". Although it is scheduled for a second reading (date to be announced), private member's bills often do not make it through Parliament. However, BEIS engaged ACAS to investigate how fire and rehire has been used and ACAS reported to the government during February 2021. The report was published in June 2021. ACAS also plans to “produce further guidance that encourages good workplace practices when negotiating changes to staff contracts”. In June 2021 BEIS confirmed that it does not believe “heavy-handed legislation” will be needed.

Whether making offers directly to union members is an unlawful inducement Dunkley v Kostal

Voluntary overtime and holiday pay calculations Flowers and others v East of England Ambulance Trust

Backdated holiday pay claims Chief Constable of the Police Service of Northern Ireland v Agnew

Holiday entitlement for term-time/ part-year workers Brazel v The Harpur Trust