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What’s new in employment law and HR- January/February 2021

Keep up to date with the ever changing world of employment law and HR

Here is a round-up of some interesting news and developments in the world of employment law and HR.

Annual increases to National Minimum Wage and Statutory Payments for 21/22

From April 2021, the National Minimum Wage and the National Living Wage will be increasing but also, importantly, the age threshold for eligibility to the National Living Wage will be lowered from 25 to 23.  In addition to this, the rates of statutory payments will also be increased.

The increases are:

  • National Living Wage (age 23 plus) to increase from £8.72 to £8.91
  • National Minimum Wage (ages 21 to 22) to increase from £8.20 to £8.36
  • National Minimum Wage (ages 18 to 20) to increase from £6.45 to £6.56
  • National Minimum Wage (under 18) to increase from £4.55 to £4.62
  • Apprenticeship Wage to increase from £4.15 to £4.30
  • Statutory Maternity Pay and Statutory Adoption Pay will increase from £151.20 to £151.97 per week
  • Statutory Paternity Pay, Shared Parental Pay and Parental Bereavement Pay will also increase from £151.20 to £151.96 per week
  • Statutory Sick Pay will increase from £95.85 to £96.35 per week.

The lower earnings limit for calculation of Statutory Sick Pay and statutory leave payments remains at £120 per week. 

IR35 Off-Payroll Working Rules to change

From 6 April 2021, the current 1R35 rules are going to change significantly.    

Briefly, the IR35 rules relate to contractors who provide their services to a client through an intermediary (like a personal service company).  The rules provide that if the contractor would have been an employee, if they were providing their services directly to the client, the contractor must pay the same tax and NI contributions as employees. 

As the law currently stands, if the contractor is providing their services to a client in the public sector, it is the client’s responsibility to decide the contractor’s employment status.  On the other hand, if the contractor is supplying their services to a client in the private sector, it is the responsibility of the intermediary (commonly the contractor’s personal service company) to assess whether the contractor could be classed as an employee for IR35 purposes.  

From 6 April 2021, the rules will change so that all medium or large sized clients in the private sectors will become responsible for assessing the employment status of any contractors who provide their services to them via an intermediary.

A medium or large sized business is one that meets two or more of the following criteria:

  • Turnover of more than 10.2 million
  • Balance sheet total of more than 5.1 million
  • More than 50 employees

For any contractors engaged by “small” businesses (i.e. those that do not meet two or more of the above criteria) the situation will remain unchanged and they will continue to be responsible for assessing their own employment status. 

This has been a well-publicised change – assisted by the fact that the new rules were meant to come into effect last April but were postponed. As a result, most affected businesses will already have taken measures to make sure they are ready. 

However, if you have not yet and you think the new rules may apply to you/your client, now is the time to get specialist advice from an accountant or tax specialist.

Brexit employment law changes – not as far off as we thought?

With the ink barely dry on the UK’s trade agreement with the EU, Business Secretary Kwasi Kwarteng confirmed that the government is looking at reforming some EU employment laws.  He was, however, quick to add that the government are not going to lower the standards of workers’ rights.  To be fair, Mr Kwarteng was responding to an article in the Financial Times that said his department was planning to dilute workers’ rights including the 48-hour limit on the working week. 

And there was us thinking the government had enough on its plate at the moment………………..

Change in law to allow the Government’s Chief Law Officer to take maternity leave  

Suella Braverman is the current Attorney General – only the second woman ever to hold this position – and is expecting the birth of her second child.  Under current laws which apply to senior government ministers, she is not entitled to maternity leave and would have to resign if she wanted to take time off after the birth.  

This is because she serves by appointment of the Prime Minister and is not an employee.   However, the government has decided that this is – well, a little archaic – and has announced the introduction of a new law which will allow ministers to receive up to 6 months’ leave on full pay.   The legislation has the backing of the opposition party and will be passed very soon and in time for Suella Braverman to be the first cabinet minister ever to take maternity leave.  

Labour have now said that the government needs to go further and make provision for paternity, adoption and shared parental leave and other parental rights.

Obviously, this news has minimal practical significance to our readers – and it has not been met with universal approval as clearly 6 months’ full pay is a lot more generous than statutory maternity pay! However, it is remarkable that this law existed for such a long time and ironic that it is getting rushed through by the government before their chief legal officer gives birth…. 

Refuse collector sacked after kung-fu kicking head off snowman

Refuse collector, Callum Woodhouse, from Herefordshire was recently dismissed from his job for kicking the head off a snowman on his collection route.    The snowman was 6ft and had obviously taken its 3 year old creator quite a bit of time – and help no doubt – to build before it was decapitated with a kung-fu kick by agency worker, Mr Woodhouse.  

The incident was captured on CCTV and soon went viral.  The agency worker was told by Herefordshire Council afterwards that he was not required back at work.  The Council said it was disappointed that anyone representing the Council would behave in this manner.

Explaining his actions, Mr Woodhouse said the snowman was obstructing his pathway to work and that his role as a bin man was an important one that the community relied on.   He also said that the snowman would have melted anyway…

Unfortunately for Mr Woodhouse, he was working for the Council via an agency and had no direct contractual relationship with the Council – which is why they were able to dispense of his services so quickly.  If he had been an employee of the Council, with no previous warning and (crucially) more than 2 years’ service, it is likely that he would have been able to bring a claim for unfair dismissal against the Council. 

Since Mr Woodhouse’s job ended, 1000’s of people have signed a petition demanding that he be given his job back.  Needless to say, not everyone thinks the same – the 3 year old’s parents for starters and perhaps anyone else who has ever had to help their child make a snowman and nearly suffered frostbite in the process.

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The information contained in this blog post is provided for guidance and is a snapshot of the law at the time it is written. It is provided for your information only and should not be used as a substitute for obtaining legal advice that it specific to your particular circumstances.

The guidance should not be relied upon in any decision making process. It is strongly recommended that you seek advice before taking action.

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