Employment Law Updates
Nuala Kelly, MD of Sagegreen HR talks to us about:
- New requirements for employment contracts and the cost of getting it wrong.
- Annual Leave changes and the impact of coronavirus.
- Statutory rate and other Employment Law changes.
David Buxton, Managing Partner of Buxton accounting shares his thoughts on:
- HMRC enquiries when the pandemic ends – the time for reckoning
- Bounce Back Loans – the fine print.
This webinar was recorded on 6th May 2020
Do you need HR advice?
The top 5 employment changes to be aware of from April 2020 including ‘Ones to Watch’
- Parental bereavement leave and pay
- Increase in holiday reference period and calculating holiday pay for workers with irregular hours
- Extension of written statement to all workers
- National Minimum Wage & other statutory rate increases
- Ones to Watch
The last 2 years have been quiet in relation to statutory changes in employment but busy in terms of case law, particularly in the area of disability discrimination and managing ill health towards dismissal.
However, 2020 is definitely a year of change and there will be plenty to look out for, not least in relation to the impact of Brexit.
We have selected a few of the known areas of change to create an insight into what will be required of employers in the first half of this year and some ‘ones to watch’ for which we will be providing further guidance as the year unfolds.
1. Parental bereavement leave and pay
“Parental bereavement leave” is a new entitlement for bereaved parents of a child to be absent from work with pay for up to two weeks.
Employees will be entitled to parental bereavement leave from day one of employment but, there will be a qualifying period of 26 weeks for entitlement to Statutory Parental Bereavement Pay.
This will be available to the birth parents or those with parental responsibility for the child (the final version of the Parental Bereavement (Leave and Pay) Act 2018 specifically covers parents who suffer a stillbirth 24 weeks or more into pregnancy.)
It can be taken within 56 weeks of the child’s death in a block of two weeks or two blocks of one week.
The Government has not yet published the regulations that will finalise the details for leave and pay but, it is anticipated that this change will take effect in April 2020.
2. Increase in holiday reference period (when calculating holiday pay for workers with irregular hours)
This change applies to calculating a week’s pay when calculating holiday pay for workers with irregular hours.
The current reference period for doing so is 12 weeks which increases to 52 weeks from 6 April 2020.
This is designed to ensure holiday pay reflects average hours/earnings for the entire year and to allow greater flexibility for workers choosing when to take holidays (particularly for seasonal or atypical roles).
3. Extension of written statement to all workers
This change extends the right to a written statement of employment particulars to all workers (including employees).
The legislation provides that access to a written statement will be a day one right for all workers.
This expands the information that employers are currently required to provide as mandatory content in a written statement from eight weeks to day one (including any additional information provided e.g. through staff handbooks on sick leave and pay or other types of paid leave).
This is a change that was proposed in The Good Work Plan, set out by Matthew Taylor in which, the Government set out a number of proposed changes to the provisions on written statements of employment particulars. It has introduced legislation to implement this change from 6 April 2020.
4. National Minimum Wage & other statutory rate increases
1 April – National Living Wage – for those aged 25 and over
– Increases from £8.21 to £8.72 per hour
1 April – Other National Minimum Wage rates
– From £7.70 to £8.20 for 21-24 year olds
– From £6.15 to £6.45 for 18-20 year olds
– From £4.35 to £4.55 for 16-17 year olds
For apprentices – £4.15
The National Living Wage is not related to the living wage rate but is used by the Living Wage Foundation, which campaigns for minimum pay levels to reflect the basic cost of living.
The Government has pledged that the national living wage rate will reach two-thirds of median earnings within five years.
Following a report from the Low Pay Commission, the Government has also pledged to reduce the age threshold for the national living wage rate so that it applies to workers aged 23 and over from 2021, and to workers aged 21 and over within five years.
On current projections, this would be around £10.50 in 2024.
From the start of April low-paid workers will benefit from a rise in the minimum wage that is four times the rate of inflation, in what the Prime Minister has called the “the biggest ever cash boost” to the legal pay floor. (6%)
6 April – Week’s pay – the maximum amount of a week’s pay for the purposes of calculating statutory redundancy pay is predicted to increase from £525.00 to £538.00
The general election meant a delay to the announcement of the other statutory rates for 2020/21, such as Maternity, Adoption, Paternity, and sick pay.
The increase normally takes effect on the first Sunday in April, which in 2020 is the 5th April the following are the expected increases.
5 April – Statutory Maternity, Paternity, Adoption and Shared Parental Pay increases from £148.68 to £151.20 per week (or 90% of the employee’s average weekly earnings if this figure is less than the statutory rate).
6 April – Statutory Sick Pay rises from £94.25 to £95.85 per week
Lower Earnings Limit – Currently set at £118, new rates not yet published
5. Ones to Watch
In the Queen’s speech on 19 December 2019, the government announced that there will be an Employment Bill, the key elements of which would be:
- Extending redundancy protections to prevent pregnancy and maternity discrimination;
Currently women in the UK are protected against discrimination when they become pregnant until the end of their maternity leave.
If the new legislation comes into force, women will get this protection from the point that they inform their employers that they are pregnant until six months after returning from maternity leave. This may also extend to parents returning from adoption leave or shared parental leave.
- Introducing a new right for all workers to request a more predictable contract;
This new right was introduced via the Government’s Good work plan in December 2018. Under the legislation all workers will have the right to request a more predictable and stable contractual working pattern after 26 weeks’ continuous service.
It is intended to benefit workers who have irregular hours, for example under a zero hours contract, but who would like more certainty on the number of hours they work and/or the days on which they work.
- Allowing parents to take extended leave for neonatal care and introducing an entitlement to one week’s leave for unpaid carers;
These changes would be after a premature birth or where the baby is born with a congenital condition, there are complications at birth, or the baby is “experiencing serious health conditions shortly after birth”.
The provisions would apply to parents with at least 26 weeks’ continuous employment with their employer at the 15th week before the expected week of childbirth; and
Whose normal weekly earnings over a “prescribed reference period” (to be confirmed) are not less than the lower earnings limit for national insurance contribution purposes.
Statutory neonatal pay would be set at the same flat rate as other family-friendly statutory payments (£148.68 for 2019/20), or 90% of their average weekly earnings if this figure is less than the flat rate.
Currently, there is no detail around the entitlement for carers, when more information becomes available, we will share this.
- Ethical Veganism – A protected belief
At a preliminary hearing at the Norwich Employment Tribunal, a judge ruled that veganism fits the description of a protected belief, such as religion.
The judge added that the belief was not just about diet and what a person wears but that “every aspect of their life seems to be governed by ethical veganism even down to hobbies and who the claimant chooses to live with and that it is quite clear that veganism has a major effect on the claimant’s daily life”.
Therefore, he is of the view that ethical veganism does constitute a philosophical belief and a protected characteristic.
This may lead to employees asserting that their own beliefs should be protected. This can be difficult for employers to assess and if you have a similar situation in your own business, such claims must meet standards such as:
- Being serious
- Worthy of respect
- Compatible with human dignity
- Not conflicting with others rights
- Reforms to IR35 in the private sector
The rules, originally set to be implemented on 6 April, but now postponed until April 2021, will shift the responsibility for determining the tax status of a contractor from the worker to the organisation using their services and this is a significant change for any employers who engage contractors or consultants through an intermediary for example, a personal services company.
This does not refer to the engagement of agency staff who are employed and supplied by the agency, but, medium and large organisations outside of the public sector will need to decide whether the rules apply to an engagement with individuals who work through their own company.
Where the rules do apply, the organisation, agency, or other third party paying the worker’s company will need to deduct income tax and employee NICs and pay employer NICs.
There is a small company exemption for clients/employers, this is expected to cover companies with:
- a turnover of less than £10.2m,
- a balance sheet of less than £5.1m or,
- 50 employees or less.
In those circumstances, the existing IR35 legislation is expected to continue to apply.