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    7 July 2021

    Six Employment Law updates your business needs to know about in 2021

    Employment law is a vital part of business, Robert Hickford Employment Solicitor and Partner reviews six changes of Employment Law in 2021 that may affect you and your business. 

    1. Equal pay claims:

    In March 2021, the UK Supreme Court ruled female shop-floor workers could bring an equal pay claim against a major supermarket by comparing their pay to male depot staff. And in June 2021, the European Courts of Justice found that EU law requires equal pay for “work of equal value” and that workers in different establishments can compare their pay if it is set by a “single source”. The rulings may add to a number of similar claims.

    Pay disparities and equal pay claims risk must be considered when undertaking due diligence, particularly for retail deals, but these rulings reaffirm that this applies also for any business where certain roles are typically performed by different sexes, and who are paid differently.

    1. Flexible working:

    With furlough coming to an end, COVID-19 vaccines being rolled out to the nation and covid-related deaths on the decline, workers are steadily heading back to the office. Yet for many staff, the imposed working from home rules have created a ‘new normal’ which has offered them a better work-life balance – not to mention a vastly reduced commute too. The lockdown forced many businesses to adapt to a remote working environment or close completely, meaning they are now able to offer staff the option of working from home, even if they would rather have them back in the office.

    Businesses can expect to see an increase in flexible working requests from staff who have become used to home working and have the facilities to accommodate it. Flexible working policies should therefore be reviewed and updated where necessary to ensure they are still suitable.

    1. Worker classification:

    In February 2021, Uber drivers won their case in the UK Supreme Court entitling them to receive worker rights rather than more limited rights as a contractor. The court also reaffirmed that worker status is a matter of statutory interpretation rather than contractual interpretation, following a number of similar judicial rulings on this topic; an area that will continue to have consequences for any businesses using contractors in the UK.

    If self-employed contractors or found by a tribunal to be employees or workers, businesses may be faced with backdated claims for sick pay, pension contributions and holiday pay. This could significantly impact a company’s cash flow and so should not be ignored.

    The Uber decision highlights the importance of assessing how the working relationship functions in practice regardless of the contractual wording. With this in mind,  it is recommended that businesses undertake a realistic evaluation of the relationships they have with contractors and assess whether they could in fact be classed as a worker under UK employment law.

    1. EU workers:

    EU nationals living in the UK had until 30 June 2021 to apply to stay in the UK.

    They should have applied for either settled status or pre-settled status depending on the following:

    • Settled status – available to anyone who can prove that they had been in the UK continuously for five years or more before 31 December 2020.
    • Pre-settled status – available to anyone who had been in the UK for less than five years by the end of 2020.

    As of 31 May 2021, 2.75 million people have been granted settled status and 2.28 million granted pre-settled status. However, it is predicted that there could still be tens of thousands of people who may not yet have applied in time. As a result, the UK government has stated that it will take a “compassionate and flexible” approach, giving people who have ‘reasonable grounds’ for missing the deadline, 28 days to apply and no action will be taken against them once an application has been submitted.

    Employers should be carrying out all the necessary enquiries to ensure their staff have the right to work in the UK, which now includes EU staff having either settled or pre-settled status.

    1. IR35:

    On 6 April 2021, the new changes to off-payroll working rules take effect. As a result, all medium and large organisations must now determine the status of anyone who provides them with a service through an intermediary. If the individual is considered an employee under UK case law, the organisation will automatically have the responsibility of paying the employer’s national insurance contributions and operate PAYE withholding.

    It is important to note that these extra accounting rules will not apply where the client is a start-up, a small company or where the organisation is not based in the UK as defined under the new law. However, if applicable, this will require some considerable thought to ensure your business is compliant. We recommend that proper processes should be put in place so that status determinations can be made whenever intermediaries are used, and PAYE withholding is operated where necessary. This will create additional costs as well as a compliance burden for all affected organisations. We, therefore, advise businesses to draft their contracts with intermediaries carefully to reduce the risk of IR35 applying. However, the contractual arrangements must always reflect the actual working relationship between the worker and client.

    1. End of furlough:

    From 1 July 2021, the furlough scheme will begin to be phased out with employers being required to make a 10% contribution to furlough pay, increasing to 20% for August and September 2021. The Employers’ CJRS guidance and the Employees’ CJRS guidance have been updated to confirm that, from 1 July 2021:

    The government will pay 70% of wages up to a maximum of £2,187.50 for the hours that the employee is on furlough. Employers will be required to top up the wages of employees on furlough to ensure they receive 80% of wages (up to a maximum of £2,500) in total for the hours the employee is on furlough. The caps are proportional to the hours not worked.

    With this signalling what is considered the closing moments of the furlough scheme, employers should now begin considering when to recall staff or whether they need to prepare for redundancies.

    If you would like to discuss the employment law updates or would like us to review and amend your existing contracts of employment then please do not hesitate to contact a member of the Employment Law Team at Steeles Law on 01603 59800o or email employment@steeleslaw.co.uk.

    *The information provided in this article is designed to provide useful information on the subject, not to provide specific legal advice.

     

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