The employment law update highlights some of the changes in the rights of employees and workers employers will have to get to grips with.
Coming up in 2021…
In 2021 we are likely to see a focus on the future of work and the workplace. How will the workplace change and adapt following the impact of COVID-19? We will see the continuation of the Coronavirus Job Retention Scheme as well as changes to the National Minimum Wage and statutory sick pay.
We have summarised the key changes likely to impact private companies.
We look at:
- The new regime for employers who are wishing/required to sponsor the visas of non-UK hires and EU Nationals arriving in the UK to work
- Tax changes and contractors
- Dealing with freelancers and workers
- National Living Wage & Sick Pay
- Gender pay-gap reporting
- Coronavirus Job retention Scheme
- Returning to the office
Non-UK hires and EU Nationals arriving in the UK to work
As of 1 January 2021 Freedom of movement between the UK and EU has ended and the UK has introduced an immigration system that treats all applicants equally, regardless of where they come from.
Employers wishing to sponsor the visas of non-UK new hires will have to use the new points-based immigration regime. The new regime also covers EU nationals arriving in the UK from 1 January 2021 who will need work visas.
You can apply for the Intra-Company Transfer Route if you wish to transfer a worker from an overseas part of your business to work for you in the UK. Permission for workers transferred via this route is temporary – they cannot stay in the UK for more than five years in any six-year period, however workers can be assigned to the UK multiple times.
If you are not already a sponsor you will need to apply for a sponsor licence so you can sponsor foreign workers or students to come and work or study in the UK.
Tax Changes and Contractors – IR35
As of 6 April 2021 the Government has extended its rules on taxing contractors which currently apply in the public sector, to the private sector.
End-user clients will, from April 6 2021, be responsible for determining employment status and deducting tax where appropriate. End-user clients must ask themselves whether, without the personal services company, the individual would be regarded as an employee of the client for tax purposes. End user clients will need to:
- Take “reasonable care” to assess whether a contractor is employed or self-employed for tax purposes.
- Confirm their decision in a status determination statement (SDS)
- Provide the SDS to the individual contractor and PSC before making the first payment to the contractor
A contractor is entitled to make representations to the end-user if they disagree with the SDS determination. The end-user then has up to 45 day period to either maintain that the SDS determination was correct or issue a new one. Ultimately, the end-user has control in the decision making process.
Freelancers and workers
A major development for operators within the gig economy is the ruling in the Uber case that freelances are workers entitled to at least the national minimum wage, holiday pay, pensions and other employment law rights. Employers and businesses that engage temporary staff staff will need to re-think their business models.
National Minimum Wage and Sick Pay
1 April will also see a drop in the age at which employees are entitled to the National Living Wage from 25 to 23 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
It is expected that Sick pay will increase from £98.35 to £96.85 per week with statutory maternity, paternity, shared parental and adoption pay increasing from £151.20 to £151.97.
Gender Pay-Gap reporting
From 4 April 2021 Employers with 250 or more employees will be required to publish their gender pay-gap report for the period 5 April 2019 to 4 April 2020.
Coronavirus Job Retention Scheme (Furlough)
The Coronavirus Job Retention Scheme has been extended until 30 April 2021. If you cannot maintain your workforce because your business has been affected by COVID-19, you can furlough employees and claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month.
Employers can furlough employees for any amount of time and any work pattern. You must have created and started a PAYE scheme on or before 30 October 2020, enrolled for PAYE online and have a UK, Isle of Man or Channel Island bank account.
Returning to the office
With the new road map announced in February 2021, employers are keen encourage employees back into the workplace, where it is safe to do so. Some employees have now become accustomed to working from home for almost a year now, which means employers could face considerable resistance from anxious employees who are reluctant to return back to the work place. This will be particularly relevant for employees who are deemed clinically extremely vulnerable.
Whilst employers will need to bring employees back into work, employers will need to consider their not only their existing statutory obligations to ensure the health and safety of employees in the workplace, they must also consider the new Corona Virus overlaying guidelines.
The Starting Point
Employees have the right not be subject to detriment or dismissal if they leave work or refuse to return to work if they believe they are in serious or imminent danger.
Dealing with the impact of a global pandemic means we are in unchartered territory as to what is serious and imminent danger in terms of a COVID-secure workplace. The test is subjective and based on what the reasonable belief of the individual employee is rather than what the employer thinks. If an employee is deemed critically extremely vulnerable, they will likely be considered disabled for the purpose of the Equality Act, and therefore employee must make reasonable adjustments in order to facilitate a safe return to work. In the new world decisions require attention to the medical position.
Taking public transport for the commute to work is common. The employer is not responsible for the employees commute. However, there is an argument that the employers common law duty of care towards the employees extend to the commute, particularly when an employee is critically extremely vulnerable.
The main objective is to encourage the employees to return to work. So employers will have to be flexible.
It will also be important to consider employees individual circumstances. Employees who are critically extremely vulnerable might be considered disabled under the Equality Act. Therefore, the employers will have to make reasonable adjustments to cater for the return to work. This might mean providing the employee with the ability to continue working from home for prolonged periods of time or permanently.
Home working provisions
Some employers have adjusted to the new ‘normal’ of working from home and in some cases, it will have benefitted employers. It might be relevant to review the employment contracts and employee handbook to update home working provisions and allow for that working flexibility. We can help.
The last resort
If, after taking all reasonable steps to encourage employees back to work, it might be the case that some employees simply refuse to return to the workplace. If, after taking all reasonable steps to ensure the employees safety and considering their individual circumstances, refusal on the part of the employee to be reasonable is a disciplinary action.
I am an associate solicitor working across several teams including corporate transactions, employment and dispute resolution.