Every January I feel duty bound to write about what to expect in employment law during the coming year.
This year the blog looks shorter than normal because of all the other preoccupations, but it at least gives me an opportunity to avoid writing about the effects of covid, furlough, etc.
I’m going to cover Brexit related developments, possible content of a forthcoming Employment Bill, what is definitely happening from April, some of the judgements we might expect from the Courts, and finally, issues in the consultation pipeline.
Since I’ve had a few questions about this recently, I’ll start with the employment law implications of Brexit, and also as I am writing this (26th January 2021) there is an Opposition Day debate in the Commons where the Labour Party intends to express its concerns.
Immediately, there are no implications, but attention to this topic has been triggered by a recent Financial Times article predicting the ripping up of worker’s rights, and within days Boris Johnson is reported in The Times to be consulting about the establishment of a ‘Singaporean’ like off shore environment.
Kwasi Kwarteng, Secretary of State for BEIS, was quick to tweet that ‘We want to protect and enhance workers’ rights going forward, not row back on them’. Interestingly, again within days, he says, and reported in The Guardian, that his department is examining EU employment protections, although he blames his predecessor for starting it.
What might we expect?
Probably not very much, but a forthcoming Employment Bill (promised in the Conservative Party Manifesto) is likely to include annual leave for carers and enhanced redundancy protection for new parents.
These improvements to workers’ rights could be used as cover for other reductions whilst still allowing the Government to claim that overall rights are being enhanced.
Given that our ‘level playing field’ commitments in the EU Trade Agreement (I shall be interested to see whether any readers click on that!) prevent us from making changes that have a tangible effect on trade and investment, we are unlikely to see the wholesale scrapping of any EU derived protections.
Predictions in the press coverage above, focus on changes to the Working Time Regulations such as:-
- The 48 hour limit
- Abolishing record keeping requirements – not that many people observe them anyway!
- Adjustments to rest breaks
- Scrapping the requirement that holiday pay calculations should include normal overtime and commission.
Frankly, I don’t think those changes are going to make any noticeable difference. We already have the third least regulated labour market in the OECD – so perhaps not as much scope as we think if we are looking to position ourselves as having a more business-friendly employment environment.
For those of you holding out for the scrapping of TUPE (the regulations that protect workers when a contract or part of a business changes hands), don’t hold your breath. It is very unlikely, although we may see some further flexibility regarding post TUPE harmonisation of contractual rights.
We may see some watering down of the Agency Workers– you’ll know what they are if they affect you – and Collective Redundancy (that apply when you are making 20 or more redundant) Regulations.
Returning to the expected Employment Bill (as yet not scheduled!), the main provisions are likely to be (as they were when it was scheduled for last year):-
- A single labour market enforcement body to better ensure the rights of vulnerable workers – a response to the gig economy issues.
- All tips to go to workers.
- The right for ‘zero hours’ workers to request a more predictable contract after 26 weeks.
- Extending redundancy protection in relation to pregnancy and maternity. This is a major enhancement of rights which already exist in some other countries. Currently, a parent on maternity leave has the first choice of any suitable vacancy if they are affected by redundancy.
This right is likely to be extended from the point where an employee informs their employer that they are pregnant until six months after their maternity leave.
- A week’s unpaid leave for carers.
What is going to happen from April 6th (the normal date for employment law changes)?
- The delayed ‘off payroll’ (IR35) changes come into force in medium and large organisations in the private sector. They won’t affect most SMEs, although it does depend on turnover or balance sheet status – see details, or watch this great 10 minute video from #Daniel Barnett if you are an individual affected by these changes.
- New ‘Post Employment Notice Pay’ (PENP) formulae introduced to iron out unfairness that occurs because of differing numbers of days in each month. A bit obscure this, so speak to your accountants or payroll bureau – it’s a tax issue!
- We see the usual annual uplifts to statutory payments such as SSP, unfair dismissal limits, maternity pay etc. One of the most significant changes this year (and it has largely gone under the radar) is that not only does the National Living Wage (NLW – that paid to the 25s and over) go up from £8.72 to £8.91 (that’s 2.2%), but potentially much more significantly, the rate will apply to everyone 23 or over.
If you have a young workforce paid at or about the NLW, that could make a significant impact on your payroll costs from 6th For, say a 24 year old, it would mean an increase from £8.36 to £8.91 (a 6.6% increase).
What will the Courts have to say during the year?
In our legal system we rely on the interpretation of our statutes by the higher Courts to establish precedents which are binding until they are overturned by a superior court (ultimately the Supreme Court although previously the European Courts).
During 2021 some of the main judgements we are expecting include:-
- Of interest to those with recognised trade unions, a case referred to as ‘Kostal’ will be heard by the Supreme Court which has to decide whether a one-off direct pay offer to employees bypassing stalled collective bargaining was lawful.
- On holiday pay, we’re expecting a decision on whether voluntary overtime has to be included in overtime calculations (at the moment the Court of Appeal has said it does), and clarification of the rule that says that if someone is making a retrospective holiday pay claim (usually ‘I was not paid the right amount’) they can only claim back up to two years or to a later point if there has been a three-month break.
You might be beginning to understand why I think this will be one of the pieces of European led regulation that gets scrapped!
- We may hear judgement on a very important case for the social care industry (Mencap) regarding the rights of sleep-in workers to the National Minimum Wage.
- Of huge significance to large retailers will be the ASDA case regarding equal pay for store workers (predominantly female) and those in distribution depots (predominantly male).
If this case goes the wrong way for ASDA, it has been estimated that it could cost them £8 billion!
- We are still waiting on the outcome of the long running saga of whether Uber drivers are workers (and thus entitled to certain rights) or are they self-employed. At the moment, pending the outcome, they are workers.
Finally, what are the Government consulting about?
These are things that we definitely will not see regulatory changes about this year, and there are almost too many to mention.
Potentially one of the most significant, for businesses of all sizes, is the review of post termination restrictive covenants. Closing on 26th February, the Government is seeking views about proposals to require continuing payment during restricted periods, pre-employment written confirmation of these types of terms (at the moment it is possible for an employee to find out that they have restrictive covenants after they have started their new employment), introducing a statutory limit on the length of such terms, and, even banning them altogether!
Other issues at various stages of consultation include sexual harassment in the workplace, ethnicity pay reporting, various modern slavery provisions, banning exclusivity clauses (provisions that prevent employees undertaking other work) for the low paid, making flexible working the default requiring employers to justify why they can’t accommodate it, a whole bunch of things arising from the ‘Taylor’ report on the gig economy, and neonatal leave and pay.
So, there you have it. My annual discharging of a perceived responsibility to forewarn readers about what is ahead.
Looking back on last years’ review, and for obvious reasons, most things did not happen.
Here’s to a better year.
Written by Ken Allison | 26th January 2021 | Paradigm Partners | www.paradigmpartners.co.uk
Ken Allison is an engaging trainer and speaker who manages to make his topics, highly interactive, challenging, entertaining, and above all, relevant to the 21st Century executive. Ken uses his understanding of managing businesses to show managers what they ‘can do’ rather than what they ‘cannot do’.
Ken specialises in taking the strain out of employment law related people issues through training workshops for managers, and his firm’s ‘ExecutiveHR’ service, providing telephone based support services to businesses throughout the UK.
Ken Allison is an expert in HR Employment Law. He combines this with a hands on understanding of managing businesses, to provide clear, no nonsense guidance to people managers as to what they ‘can do’ rather than what they ‘cannot do’. His unique proposition is that he combines a background in line management, corporate HR and personnel, and seven years as Head of HR Consulting for a major law firm, to deliver practical solutions that improve performance.
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