Employment law – changes and trends for the start of 2021

20 / 01 / 2021

Despite the COVID-19 crisis significantly impacting the ability of many businesses to plan with certainty, there remain a number of key employment changes and challenges which need to be addressed at the start of 2021. 

1. Furlough and financial support

The Coronavirus Job Retention Scheme (‘CJRS’), is currently scheduled to run until 30 April 2021. Under the CJRS, employers can claim up to 80% of wages for hours not worked by any individual on furlough up to a maximum cap of £2,500 (gross) per month. Employers can continue, without obligation, to ‘top up’ any furlough wages. The Budget in early March 2021 is likely to indicate ‘next steps’ in terms of financial support and we suspect this will include a further extension of the CJRS.

In the interest of transparency and to deter any fraudulent claims, names of employers who have made furlough claims from 1 December 2020 are due to be published later this month (subject to limited exceptions). Employers should also remember that it is now no longer possible to claim under the CJRS for periods when individuals are working out their notice periods.

2. Homeworking and redefining the workplace

Many workers are unlikely to have stepped foot in their office for nearly 10 months. With this period likely to be further extended, it is imperative that employers continue to take steps to protect mental and physical health. We are likely to see an upward trend in stress and personal injury claims in respect of those workers who have been neglected, dangerously overworked and/or provided with insufficient equipment to perform their tasks. Conversely, many workers have embraced homeworking and are unlikely to wish to return to the office full-time which will lead to rethinking the use of office space, resourcing levels and remuneration structures.  

3. Diversity and Inclusion

Addressing inequality is high on many corporate agendas. The issue of increased diversity in the workforce has really come to the fore and you may find our webinar on this topic helpful. Attention also needs to turn back to gender pay gap reporting. In 2020, employers were given special dispensation not to make a report due to the pandemic, however no such dispensation is planned for 2021.

4. Business Protection

2020 saw a significant downturn in recruitment due to a shrinking job market and uncertainty caused by the pandemic. 2021 is likely to see increased market activity and a flurry of moves. To protect business interests, employers need to ensure that covenants are up to date, contracts are signed, notice periods are sufficiently long and proper thought has been given to retaining key workers and teams against threats of poaching. 

Separately, two consultations have recently been set up – (i) dealing with possible reform concerning the enforceability of post-termination restrictions (most notably non-compete clauses) and (ii) concerning whether exclusivity clauses should be unlawful in employment contracts for lower paid employees. These consultations are due to close at the end of February 2021.

5. Off payroll workers / IR35

The delayed implementation of IR35 is now scheduled to come into force in April 2021. The new rules require medium and large sized businesses in the private sector to assess the employment status of any contractors who provide their labour through their own intermediary (for example through their own company or an agency company) and, if appropriate, those businesses may be required to operate PAYE and NICs in respect of those individuals.

HMRC’s Check Employment Status for Tax (also known as ‘CEST’) tool is a useful starting point for any IR35 compliance concerns and we would urge businesses to review existing arrangements now.

6. and finally … Brexit

The most immediate impact for UK employers will be immigration. New rules mean that some EU, EEA and / or Swiss citizens living and working in the UK need to acquire permission to remain (via settled or pre-settled status) under the EU Settlement Scheme and / or EU nationals wishing to move to the UK may have new visa obligations. If you intend to recruit from outside the UK going forwards, we can assist you with obtaining a sponsor licence. 

If you have questions as to any of the above topics, please do not hesitate to contact a member of our Wedlake Bell Employment team.