Employment law: what to look out for in 2020


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2020 promises to be a year of significant change, and employment law is no exception!  This April sees the introduction of a raft of new legislation, while the Queen's Speech heralded a couple of new bills on employment and immigration, and the advent of a national disability strategy.  

Meanwhile there is finally certainty on the Brexit front, with the UK scheduled to leave the EU on 31 January.  The European Union (Withdrawal Agreement Bill) has been reintroduced to Parliament and passed its second reading on 20 December.  The previous version of the Bill contained provisions to safeguard existing EU-derived workers' rights.  These provisions have been removed from the new version of the Bill, and the government has said that it intends to legislate separately to protect and enhance workers' rights.

April 2020

Written statement of terms for workers

The government is introducing the Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 on 6 April 2020.  These provide that a written statement of terms must be given to workers as well as employees, on or before the first day of employment.  It will apply to all new joiners on or after 6 April 2020.

Changes to reference period for calculating holiday pay

The Working Time Regulations 1998 will be changed to make the reference period for determining an average week's pay (for the purposes of calculating holiday pay) from 12 weeks to 52 weeks, or, if the worker has been employed for less than 52 weeks, the number of complete weeks for which the worker has been employed.

The changes to the holiday pay reference period will apply to periods of holiday from 6 April onwards.

Taxation of severance payments

From 6 April 2020 employer NICs will be payable on termination payments above £30,000.  This was initially scheduled to take place in 2019 but was pushed back to 2020.

Extension of IR35 to the private sector

IR35 currently applies to off-payroll working in the public sector.  Where IR35 applies, and a public authority contracts with an intermediary, the public authority is liable to operate PAYE and NICs.  From 6 April 2020 this extends to all but small companies in the private sector that contract with personal service companies for the provision of workers' services.

Before the General Election, Sajid Javid, the Chancellor of the Exchequer, said that the Conservative Party would review the IR35 rules ahead of their introduction to the private sector.  There is some suggestion that the extension of IR35 might be delayed until 2021 but, as nothing has been said since the beginning of December, employers should continue to plan for a 6 April implementation date.

Agency workers

The Agency Workers (Amendment) Regulations 2019 come into force on 6 April 2020.  They will remove the "Swedish Derogation" from the Agency Workers Regulations 2010 (this currently allows employment businesses to avoid pay parity between agency workers and direct employees if certain conditions are met).

From 6 April 2020, the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2019 will require temporary work agencies to provide agency work seekers with a Key Information Document, including information on the type of contract, the minimum expected rate of pay, how they will be paid and by whom.


The Queen's Speech

The Queen's Speech, which was delivered at the opening of Parliament on 19 December 2019, set out details of the legislation that the government intends to carry over into, or introduce in, the new Parliamentary session.

Employment Bill

The government proposes to introduce a new Employment Bill which will comprise the following measures:

  • A single enforcement body

This comes out of the Good Work Plan in which the government announced proposals for a single labour market enforcement agency to ensure that vulnerable workers are aware of and can exercise their rights.  It has already been the subject of a government consultation.

  • Tips to go to workers in full
  • The right to request a more predictable contract

The Bill will introduce a right for all workers to request a more predictable and stable contract after 26 weeks' service as part of the Good Work Plan. This is focused on gig and zero hours workers.

  • Extending redundancy protection to prevent pregnancy and maternity discrimination

Currently employees made redundant on maternity leave have the right to alternative employment over competing colleagues. The government will extend the period of redundancy protection from the point an employee notifies their employer of their pregnancy until six months after the end of their maternity leave.

  • A new right to neonatal leave and pay

The government has already carried out a consultation (which closed on 11 October 2019) on a new right to neonatal leave and pay to support parents of premature or sick babies.

  • Flexible working

The government intends, subject to consultation, to make flexible working the default position unless an employer has a good reason not to grant such an arrangement.

  • A week's leave for unpaid carers 

Immigration Bill

After Brexit, free movement will end, which allows the government to align the treatment of EU citizens arriving from 1 January 2021 with non-EU citizens.
This Bill will lay the foundations for a new points-based immigration system from 1 January 2021 which will be based on people's skills and contributions to the UK.  It will also protect the immigration status of Irish citizens and provide that EU citizens resident in the UK will have the right to remain under the EU Settlement Scheme.

The government also plans to increase the immigration health surcharge (IHS), which migrants must pay upfront for the duration of their visa if they plan to stay in the UK for more than six months.  The IHS is intended to fund the migrant's estimated use of the NHS and is currently £400 per migrant per year.  It is expected to increase to £625 per migrant per year.

Introduction of a national disability strategy

The government plans to introduce a different approach to disability following the consultation, 'Health is everyone's business: proposals to reduce ill health-related job loss'. Which closed on 7 October 2019.

The government aims to reduce the disabled employment gap and to reach the existing goal of an increase of one million disabled people on work between 2017 and 2027.

Good Work Plan

There have been consultations over the last 12 months looking at how to structure the workforce of the future, and it is likely that some of these will make their way into law in 2020.

 

Manifesto promises

It's worth taking a quick look at what the Conservative Party promised in their manifesto (some of the pledged reforms have already been dealt with above).

The Conservatives stated in their manifesto that that they would tackle prejudice, racism and discrimination and address the complex reasons why some groups do less well at school, earn less at work, or are more likely to be victims of crime.  They also committed to reducing the disability employment gap, via a National Strategy for Disabled People which would look at ways of improving the benefits system and employment and housing opportunities for disabled people.

The Conservatives promised to set up a new £3 billion National Skills Fund to provide funding for high-quality education and training and to help people to get on the work ladder, retrain, gain qualifications and switch careers.  They also promised to provide help for employers to invest in skills and consider how the working of the Apprenticeship Levy can be improved.  The Conservatives also pledged to create two million new high-quality jobs and reduce National Insurance contributions for employers if they employ ex-service personnel, as well as a guaranteed job interview for veterans for any public sector role they apply for.

The Conservatives promised to improve incentives to attack the problem of excessive executive pay and rewards for failure, and to ensure redundancy payments can be clawed back when high-paid public servants move between jobs.

The Conservatives also said they planned to launch a review to explore how the self-employed can be better supported.  This will include improving their access to finance and credit, making the tax system easier to navigate, and examining how broadband can boost home-working.


Interesting case law

As always there will be new case law decisions to keep us on our toes!  We'll keep you posted but to whet your appetite, here are a few cases we're looking forward to.  The Supreme Court is due to hear Royal Mencap Society v Tomlinson-Blake on 12 and 13 February.  Currently, following the Court of Appeal's decision in this case, employees undergoing sleep-in shifts are only entitled to the National Minimum Wage (NMW) when they are awake and carrying out duties.  However, if the Supreme Court disagrees, sleep-ins may be found to attract the NMW for the duration of the shift which will have serious ramifications for those operating in the care industry.

Meanwhile the Uber litigation continues to rumble on, with the Supreme Court due to hear the appeal in Uber BV and others v Aslam and others in July.  It will be looking at the issue of whether Uber drivers are self-employed contractors or workers.   The Court of Appeal, the Employment Appeal Tribunal and the tribunal have all agreed that as long as the drivers have turned on the app, are ready and willing to accept fares and are in the territory in which they are authorised to drive they will be considered to be workers.  The Court's decision will be eagerly awaited following the growing number of gig economy cases where Tribunals have concluded that individuals are workers and not independent contractors.

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