This blog sets out the key legislative changes and case law decisions expected in 2021 and beyond and will be regularly updated. 

EARLY 2021

As of 1 January our new relationship with the EU began.  In terms of employment law, all pre-Brexit case law of the European Court of Justice handed down prior to 1 January continues to be binding on courts and tribunals. There are, as always, some limited exceptions to this as the Supreme Court (along with the High Court of Justiciary in Scotland and specified appellate courts throughout the UK) can depart from retained Court of Justice case law.  Post-Brexit, the courts are not bound by any new decisions of the Court of Justice, but may have regard to it. 

The new points-based immigration system is in place and applies to EU nationals from 1 January.

Employers will need to understand how the new system will impact recruitment and whether they need to apply for a sponsor licence. Employers should also remind EEA employees to apply for settled or pre-settled status if they have not already done so.

Solo-regulated firms must start to undertake assessments of the fitness and propriety of their certified persons under the Senior Managers and Certification Scheme by 31 March 2021, delayed from December 2020 in response to coronavirus.  Firms must also submit their directory persons data to the FCA by the same date. 

FROM APRIL 2021

Coronavirus Job Retention Scheme

Originally due to close in April 2021, the CJRS has been extended again until the end of September 2021.  The UK Government will continue to contribute 80% of wages for unworked hours, with employers paying NICs and employer pension contributions, until 30 June 2021.  In July employers will be required to contribute 10% to wages for unworked hours, rising to 20% in August and September.  

Gender Pay Gap Reporting

Enforcement of the gender pay gap regulations is to be suspended by six months for the 20/21 reporting year.  While employers are still encouraged to meet the reporting deadline of 4 April the Equalities and Human Rights Commission have confirmed to enforcement action will be taken before 5 October 2021 - effectively giving employers until this date to publish their reports.   

IR35

Changes to IR35 in the private sector - also delayed by 12 months as a consequence of Covid-19 - will come into force on 6 April 2021.  The rules shift responsibility for determining the status of a contractor, and liability for deducting tax and NIC, if IR35 applies, to the hiring organisation. 

Post-Employment Notice Pay

Changes to the calculation of Post-Employment Notice Pay will also take effect from 6 April 2021.  The existing formula had the unintended consequence of having more or less favourable outcomes depending on when in the year employment terminated.  The change will result in a consistent calculation.  A further change will mean the tax treatment of PENP for employees who are not resident in the UK will be aligned with the treatment of all UK residents.  However, this applies only to employees who physically perform their duties in the UK.

Other changes from April 2021 include:

National Living Wage/National Minimum Wage

In addition to the annual increases to NLW and NMW rates, the age at which workers become entited to the National Living Wage will drop from from 25 to 23 years with affect from 1 April.  The period for which employers must keep records sufficient to establish that it is paying a worker at a rate at least equivalent to the applicable rate is also extended from three to six years.

As of 1 April, the new rates will be:-

  • 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
  • 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

Statutory Benefits

Statutory sick pay will increase from £95.85 to £96.35 per week with statutory maternity, paternity, shared parental and adoption pay increasing from £151.20 to £151.97 per week. The increase usually occurs on the first Sunday of April.

Tribunal Compensation

The annual Employment Tribunal award limit changes will take effect on 6 April 2021.  For cases involving dismissals, the figures apply where the effective date of termination falls on or after 6 April 2021.  The limit on compensatory award for unfair dismissal will rise from £88,519 to £89,493.

The cap on the compensatory award is the lower of the maximum or 52 weeks' pay (based on the Claimant's gross salary prior to dismissal including employer pension contribution but excluding benefits in kind and discretionary bonus).  As always there are a limited number of exceptions where the cap does not apply. These are dismissals for whistleblowing or for raising certain health and safety issues. In addition, there is no limit to the award that can be made where a dismissal is related to unlawful discrimination.

The limit on a week's pay (used for calculating statutory redundancy payments and the basic award for unfair dismissal) will increase from £538 to £544 meaning the maximum basic award increases to £16,320.

Guidelines for Injury to Feelings Awards

An award for injury to feelings is made to compensate for injury to feelings caused by discrimination. The award is separate from an award to compensate for financial loss and can be made even where no financial loss has been suffered.  To assist Employment Tribunals, the Court of Appeal previously set out guidance for quantifying awards for injury to feelings, known as the Vento bands.  The new Vento bands are as follows for any cases presented on or after 6 April 2021:- 

Lower band (less serious)                      £900 - £9,100

Middle band                                             £9,100 - £27,400 

Upper band (more serious cases)         £27,400 - £45,600 

Awards over £45,600 will be made only in exceptional cases.

LATER IN 2021 AND BEYOND

Immigration

Employees who have been living or working in the UK on or before 31 December 2020 have until 30 June 2021 to obtain (or apply for) settled or pre-settled status if they want to continue to work here from 1 July 2021 onwards.  If that deadline is missed from 1 July they will become illegal workers.

Employment Bill

The Employment Bill was mentioned in the Queen's Speech in December 2019 and is to be introduced during this Parliamentary session.  They key features of the Bill are:-

  • creating a new single labour market enforcement body
  • ensuring tips and service charges go to workers in full
  • introducing the right to request more predictable contracts
  • extending redundancy protections to prevent pregnancy and maternity discrimination
  • introducing extended leave for neonatal care
  • introducing an entitlement to one week's leave for unpaid carers
  • making flexible working the default position unless employers have a good reason not to (subject to consultation)

The draft bill is yet to be published so there is currently no detail on the provisions. However, a number of consultations have taken place and the UK Government's response is still awaited.   A response has been provided on the right to leave for neonatal care.  It is intended to introduce leave and pay of up to 12 weeks for the parents of babies in neonatal care.  It is anticipated that this will be implemented in 2023.  It has also been confirmed that a new single labour market enforcement body will be created when parliamentary time allows.

The Queen's December 2019 speech also indicated that legislation is to be introduced to reduce disruption caused by rail strikes. The UK Government's intention is to require a minimum level of service during strike action to ensure that the public are not disproportionately affected by rail strikes. Any strike which does not meet the minimum service requirement will be unlawful. Injunctions/interdicts or damages will be able to be sought against unions.

Ethnicity pay gap reporting

The possibility of ethnicity pay gap reporting remains very much alive, despite the consultation on the issue closing in January 2019.  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 has helped to keep equality and diversity highlighted as an issue on which considerable work still requires to be done.

Taylor Review/Good Work Plan

A number of high profile issues arising from the Taylor Review and the Good Work Plan remain outstanding. These include the UK Government's intention to legislate to increase the gap in employment required to break continuity from 1 week to 4 weeks and the issue of employment status.  This seems to have lost momentum and a full response from the UK Government to the consultation that took place in 2018 is still awaited.

Gender Equality

Significant progress is still to be made on the Gender equality at every stage: a roadmap for change.  When it was published on 3 July 2019 aims included consulting on strengthening measures to tackle sexual harassment, developing new EHRC guidance on sexual harassment, publishing a new Gender Equality Monitor, reviewing the enforcement of equal pay legislation, and assessing the effectiveness of gender pay gap reporting and consulting on any changes by 2021. 

We are also still awaiting the Government Equalities Office response to the proposed extension of the three month time limit for bringing pregnancy and maternity discrimination claims.

Modern Slavery

A UK Government response to the consultation on Transparency in supply chains which proposed changes to the Modern Slavery Act was published in September 2020.  Amongst a number of other proposals, the Government response includes legislating on the content of statements, introducing a single reporting deadline (30 September each year) and requiring organisations to publish their statements on a UK Government website.

Confidentiality clauses in contracts of employment and settlement agreements

Prior to the 2019 general election, the UK Government committed to introducing new legislation restricting the use of confidentiality clauses (or NDAs) in contracts and settlement agreements "when Parliamentary time allows". The UK Government response to a consultation identified a number of measures it intends to take to tackle misuse of NDAs including:-

•           Legislating to ensure a confidentiality clause cannot prevent an individual disclosing to the police, regulated health and care professionals or legal professionals;

•           Legislating to ensure the limitations of a confidentiality clause are clear to those signing them;

•           Legislating to improve the independent legal advice available to an individual when signing a settlement agreement;

•           Production of guidance on drafting requirements for confidentiality clauses; and

•           Introduction of new enforcement measures for confidentiality clauses that do not comply with legal requirements in written statements of employment particulars and settlement agreements.

It is not clear when the legislation will be brought forward. 

Possible ban on exclusivity clauses in contracts of employment

The UK Government has indicated it is reconsidering the introduction of a ban on exclusivity clauses in employment contracts for low paid workers.  A consultation on this issue is due to close on 26 February. If taken forward, this would prevent employers from restricting low-paid employees (under £120 per week) from working elsewhere. Currently the ban only applies to zero hours contracts.

Consultations

There are a number of consultations on employment related issues which took place in 2019 which may result in new legislations but have not yet been responded to by the UK Government. These include consultations on:-

  • measures to address one sided flexibility
  • employment status
  • Proposals to support families, including
    • reform on parental leave and pay
    • transparency of flexible working and family related leave and pay
    • Health is everyone's business: proposals for reducing ill health related job loss

WHATEVER HAPPENED TO…..?

Tribunal Fees

There were ripples in 2019 suggesting that tribunal fees may be re-introduced at some point in the future however they appeared to fade to nothing.  That was until June 2020 when a report appeared in the Times newspaper suggesting ministers intend to re-instate fees after the paper had sight of correspondence between Whitehall officials and the head of the English Law Commission that asked the think tank to “provide recommendations for creating a coherent system for charging and updating fees in the future". Whether this comes to anything remains to be seen.

Shared (Grand) Parental Leave

The Government announced plans to extend Shared Parental Leave (SPL) to include grandparents in late 2015. The Government’s original stated aim was to introduce this during 2018, although the consultation planned for early 2016 was delayed until after the Brexit referendum and, to date, has not taken place.

Ban on Corporate Directors

The ban on corporate directors expected to take effect in October 2016 was also delayed.  No new implementation date has been announced however BEIS has repeated its intention to implement this ban.

KEY CASES FOR 2021

Where we have covered these cases in the past, more details on the facts and the judgments that have been appealed can be obtained by clicking on the case names below.

In 2021 we will see a number of interesting judgements from cases heard in 2020 including:-

Royal Mencap Society v Tomlinson-Blake - concerns the correct approach to determining whether employees who "sleep-in" in order to carry out duties (if required) engage in time work for the full duration of their night shift.  The case was heard by the Supreme Court on 12 and 13 February 2020.

UPDATE:- the Supreme Court upheld the judgment of the Court of Appeal, finding that workers who "sleep-in" were not entitled to NMW/NLW for the hours spent asleep during a shift.

Uber BV and others v Aslam and others - employment status will once again be the focus of attention when this judgment is handed down.  The case was heard by the Supreme Court on 22 and 23 July 2020.  The appeal is against the decision of the Court of Appeal that Uber drivers are workers for the purposes of the Employment Rights Act 1998, the Working Time Regulations 1998 and the National Minimum Wage Act 1998.

UPDATE:- the judgment was handed down on 19 February with the Supreme Court upholding the decision of the employment tribunal that Uber drivers are workers.

The judgment is also awaited in Asda v Brierley which concerns comparators for equal pay claims.

UPDATE:- The Supreme Court judgment was issued on 26 March, upholding the decision of the employment tribunal that supermarket employees can compare themselves with distribution depot employees for the purposes of equal pay claims.  This was just a preliminary point in these procedings, with arguments on whether the work done by the store employees is of equal value to that done by distribution depot employees still to be heard along with the supermarkets "material factor" defence.

There are also a number of high profile cases due to be heard in 2021 (although the hearing dates may be impacted by the pandemic), most notably:-

Lee v Ashers Baking Co Ltd and others is still awaiting a date for a hearing before the European Court of Human Rights ("ECHR"), the Supreme Court having held that refusing to provide a cake supporting gay marriage is not discrimination.  This is a case which deals with discrimination in terms of access to goods and services rather than employment law but it establishes precedents which may be relevant to future cases concerning discrimination in the employment field.  Before the ECHR the case is brought against the UK rather than Ashers Baking Co Ltd, with Mr Lee claiming that in reaching its decision the Supreme Court failed to give appropriate weight to his rights under the European Convention of Human Rights.

Kostal UK Ltd v Dunkley & Others is due to be heard on 18 May 2021. This addresses the tricky issue of when employers can approach staff directly to agree temporary changes to contracts following the breakdown of negotiations with unions under collective bargaining arrangements.

A hearing is fixed for Flowers and others v East of England Ambulance Trust on 22 June 2021 which will consider whether holiday pay must include regular voluntary overtime.

UPDATE:- the case was removed from the Supreme Courts hearing list shortly before the hearing date.  It is thought the case may have been settled following an agreement affecting the NHS in England that regularly worked overtime and additional standard hours should be included in the calculation of holiday pay.

On 23 and 24 June 2021, the Supreme Court is due to hear Chief Constable of the Police Service of Northern Ireland and another v Agnew and others which concerns whether a "series" of unlawful deductions from holiday pay is interrupted by gaps of more than three months.

The EAT is to hear Mackereth v The Department for Work and Pensions and another on 18 and 19 October.  The appeal is against the finding of the employment tribunal that a doctor who refused to address transgender patients by their chosen pronoun was not discriminated against on the grounds of religion or belief when his contract was terminated.

Towards the end of the year - 9 November 2021 - the long running case of Harpur v Brazel will be heard by the Supreme Court. This looks at whether workers who only work part of the year should have their annual leave capped at 12.07% of annualised hours.