Employment Legislation


The Good Work Plan

The Government has dubbed the Good Work Plan “the biggest overhaul in employment law in 20 years”, although it may not feel like that at the moment. However, don’t let these new changes catch you out…

  1. Workers get the right to a written statement

Up to now, only employees have had the right to a written statement of employment. But from 6 th April 2020, you’ll need to give all employees and workers a written statement on or before their first day of employment. Workers don’t always have a written contract with their employer, and as they don’t have to accept the work their employer offers, they have fewer rights than employees.

Employees on the other hand always have a written contract of employment and have to accept the work their employer gives them. As an employee, they get flexible working rights, protection from dismissal, and the right to raise grievances.

    2. Right to request stable contracts

After 26 weeks of employment, workers and employees can request a clearer, more certain contract. For example, they can ask you for a guaranteed number of working hours or fixed working days. You’ll have to approve or reject their request within three months. If you reject it, you’ll need to have a genuine business reason to back up your decision.

    3. Break-in continuous service will increase

Up to now, a gap of just one week could break a worker’s continuity of service. And if they stopped working for a week, they would not get maternity pay, flexible working requests nor redundancy pay. But that’s all set to change: The continuous service gap will increase to four weeks from 6th April 2020, making it easier for staff to qualify for more employment rights.

    4. Agency workers to get Key Facts Page

You’ll need to give existing agency workers a ‘Key Facts Page’ by 30th April 2020 and provide one to any new agency staff to tell them more about a job before they accept it. The Key Facts Page can’t be longer than two A4 pages and must explain:

  • The type of contract.
  • The minimum rate of pay.
  • The person who pays the wage.
  • That workers get the same pay as permanent staff after 12 weeks’ service.


More protection for agency workers

The Agency Workers Regulations have been amended so that from April 2020, you’ll have to pay agency workers with 12 weeks’ continuous service the same amount as permanent staff. It had been the case that agency workers could opt out of getting the same pay as permanent staff in exchange for guaranteed pay between their temporary jobs. But nowadays, agency workers don’t usually have lots of gaps between jobs and so they could be short-changed, and the law has been updated accordingly.



Holiday Pay for those with irregular hours

The Working Time Regulations 1998 have also been amended to increase the reference period for determining an average week’s pay (to calculate holiday pay). Where a worker has been employed by their employer for at least 52 complete weeks, the reference period is increased from 12 weeks to 52 weeks. Where a worker has been employed by their employer for less than 52 weeks, the reference period is the number of weeks for which the worker has been employed.

This development will make it fairer and much easier to calculate holiday pay and will protect workers who work irregular hours.



Increase to statutory rates

The 1 April 2021 will see a drop in the age at which employees become entitled to the National Living Wage from 25 to 23 years as well as the usual increase in rates.  In addition,  the period that an employer must retain records sufficient to prove it is paying a worker the correct rate will extend from three to six years effective from 01 April 2021.

The new rates are:

  • NLW will increase from £8.72 to £8.91 per hour (for those aged 23 and over)
  • NMW 21 to 22-year-old rate will increase from £8.20 to £8.36 per hour
  • NMW 18 to 20-year-old rate will increase from £6.45 to £6.56 per hour
  • NMW 16 to 17-year-old rate will increase from £4.55 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 to £4.30 per hour.

Statutory Benefits – from Sunday 4 April 2021

  • Statutory Sick Pay (SSP) increases from £95.85 to £96.35 per week.
  • Statutory maternity, paternity, shared parental and adoption pay increases from £151.20 to £151.97 per week.

Tribunal Compensation

The annual Employment Tribunal aware limit changes effective from 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 the compensatory award for unfair dismissal will rise from £88,519 to £89,493.

The cap on the compensatory award is the lower of the compensatory award limit (£89,493 from 6 April) 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).  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 and maximum statutory redundancy payment 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.

Gender Pay Gap Reporting

Gender pay gap reporting was suspended in 2020 and it has recently been announced that enforcement of the reporting requirement will be suspended again this year for a period of 6 months.

Employers are still encouraged to meet the 30 March (public sector) and 4 April (larger private and voluntary organisations) deadlines if possible. However, the Equality and Human Rights Commission has confirmed no enforcement action will be taken until 5 October 2021. As such, affected employers have until that date to comply.

IR35

Changes to IR35 in the private sector – also delayed by 12 months as a consequence of Covid-19 – come into force on 6 April 2021.  The rules shift responsibility for determining the status of a contractor for tax purposes onto the client.

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 more 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.



Parental bereavement leave

A new statutory entitlement and payment will be introduced from 5th April 2020 aimed at supporting parents who lose a child under the age of 18 years. This new entitlement was introduced in the Parental Bereavement (Leave and Pay) Act 2018 providing parental bereavement leave (PBL) and statutory parental bereavement pay (SPBP) to any parents who qualify whose child dies under the age of 18 or who suffers a stillbirth from week 24 of pregnancy.

Information that we have is as follows:

  • The new right to pay and leave will be available to parents of children whose date of death is on or after 6th April 2020.
  • In the case of stillbirth, the date of death will be the date of birth of the stillborn child.
  • Where more than one death occurs, whether at the same time or some time apart, there will be an entitlement to SPBP for each child.
  • Primary carers or parents will be entitled to up to two weeks’ leave.
  • Leave can be taken in one block or two separate blocks of one week and must be taken within 56 weeks from the date of death. (so it can be added to the end of maternity leave.)
  • Employers will be entitled to recover SPBP from the Government at either 92% or 103% if their NI Bill for the last complete tax year prior to the child’s death was less than £45,000.
  • The rates of pay have yet to be confirmed but will mirror the payments made for Statutory Maternity, Paternity and Adoption Pay (currently £148.68 per week or 90% of the employee’s average weekly earnings if lower than this sum).


New immigration system

The government has published its plans for the new points-based immigration system which will apply from 1st January 2021 to both EU and non-EU migrant workers.

Under the new system, all would-be Tier Two (General) migrants must speak English and will need an offer from an approved sponsor, for a role at the required skill level (i.e. a role requiring qualifications equivalent to A levels) and at the required salary. The minimum salary threshold will be set at £25,600 (with no regional variation across the UK). However, in certain circumstances, the minimum salary threshold will be reduced to £20,480. There will be no need to advertise a role and there will be no cap on Tier Two work visas.



Confidentiality and NDAs

Acas has published new guidance on non-disclosure agreements (NDAs). These commonly form part of settlement agreements with departing employees. This is the latest in a series of developments and, although the guidance does not have the same force as a statutory code of practice, it may be used as evidence in legal proceedings.

The Acas guidance discourages the routine use of NDAs. It also states that a worker should be given a reasonable time to carefully consider the agreement and makes it clear that NDAs should not be used to stop someone from:

  • Reporting discrimination or sexual harassment at work or to the police.
  • Disclosing a future act of discrimination or harassment.
  • Whistleblowing

Details of the government’s proposed legislation on confidentiality clauses are awaited.