What's new for employment law in 2021?
From Brexit and wages, to redundancy and IR35, Loch Associates rounds up of some of the key employment law changes taking place in 2021 and how they affect your business.
Redundancy consultations
The EU Court of Justice has issued a decision on collective redundancy consultations. A redundancy consultation is where all employees are invited to a meeting in writing, informing them of the potential redundancy situation and the reasons for this. Collective consultation rules must be followed if an employer is proposing to make 20 or more redundancies at the same workplace within 90 days. The Court has held this is based on 90 rolling days. For employers, this means looking both forward and backward over 90 days to determine if 20 or more redundancies have been proposed over that period. If it does apply then it will trigger the collective consultation obligations, which impacts on the process that needs to be followed and when notice can be served.
An example where this would apply is where an employer initially proposes 15 redundancies and then later, if business has not improved, a further six redundancies within the same 90-day period. This would result in over 20 redundancies within a 90-day period so the obligation to consult collectively has been triggered.
Employers should carefully consider past and anticipated reductions in staff when considering redundancies to ensure they comply with the obligations and avoid successful claims from employees for a failure to do so. It’s also important to remember that the definition for redundancies is wider and can apply to situations where an employer is contemplating contractual changes that could result in employees resigning and claiming constructive unfair dismissal too.
Minimum wage
Not only are the National Minimum Wage rates increasing from 1 April 2021, but the age that workers become entitled to the National Living Wage is also changing. This means that individuals aged 23 and over (as opposed to 25 and over, as it is currently) are entitled to £8.91 per hour and if they work a 40-hour working week, this means a salary of £18,532.80.
Brexit changes
From 30 June 2021, EU job applicants will need to provide proof of a visa or residential status under the EU Settlement Scheme. If you have not done this already, you should review your workforce and prepare to change right to work checks.
IR35
You may recall that the government delayed the extension of off-payroll working rules (known as IR35) from April 2020 to April 2021 due to COVID-19. It looks like this change will go ahead in April 2021. This legislation impacts medium and large businesses with a turnover of more than £10m and more than 50 employees, who engage self-employed contractors. If this applies, then the business will be responsible for determining employment status and deducting tax and NI if appropriate. Regardless of whether or not it applies it is worth reviewing the status of any self-employed staff you have to ensure they will not be assessed as employees or workers later.
Roisin Kavanagh is an employment solicitor with Loch Associates.
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