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Employment Law in 2021 : what to expect next?

Covid-19 dominated employment law developments in 2020: putting (optimistically) that to one side, what can employers and employees expect in 2021?

Andrew Collier
Andrew Collier HR Adviser
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Aside from any further changes to employment law brought about by ongoing measures introduced by the Government to combat Covid-19 or the impact it has had on both businesses and their employees, what other hot topics should we be looking out for in 2021?

Employment Bill 2019-20. In the Queen's Speech on 19 December 2019, the government announced that it would introduce a new Employment Bill. The Bill will cover topics ranging from the establishment of a single enforcement body for the labour market to a requirement for employers to pass on all tips and service charges to workers. However, the progress of these developments has been delayed due to the COVID-19 pandemic, and the Employment Bill has not yet been progressed.  We might finally see this come in to law later in 2021.

Neonatal leave and pay. On 16 March 2020, the government responded to a consultation on neonatal care leave, proposing the introduction of statutory neonatal leave and pay for up to 12 weeks for parents of babies requiring neonatal care.  The legislation required here has also been delayed but expect it to make its way through in 2021.   

Leave for unpaid carers. Around about the time that Covid-19 led to the first national lockdown, BEIS had just opened a consultation seeking views on its proposal to give employees who are unpaid carers one week's unpaid leave per year for the purposes of caring, with the aim of supporting those who struggle to manage providing long-term care to others with their own employment. The consultation closed on 3 August 2020 and we await to see what the government's response is, and whether this will make it through to becoming law this year.  

Off-payroll working (IR35) rules. To address suspected non-compliance in the private sector, the government confirmed as long ago as 2018 that the off-payroll working rules would be extended to the private sector from 6 April 2020. In response to the  pandemic, implementation of this measure was postponed to 6 April 2021 but we now have every reason to believe it will become law this time around. 
This means that payments to workers supplied to large and medium-sized companies by personal service companies will be treated as payments of employment income and so subject to income tax and NICs. Responsibility for tax compliance therefore shifts from the personal service company to the client or intermediary.

Human Rights Act 1998. In December 2020, the government announced the launch of an independent review of the Human Rights Act 1998 and whether it requires reform, not least following the UK's departure from the EU.  The review, which will be undertaken by a panel headed by Sir Peter Gross. is expected to report its findings in summer 2021 - might this lead to a new UK version of the Human Rights Act later in 2021?

Post-termination non-compete clauses. On 4 December 2020, BEIS opened a consultation on measures to reform post-termination non-compete clauses (often referred to as 'restrictive covenants') in employment contracts. The consultation, which closes on 26 February 2021, seeks views on proposals to require employers to continue paying compensation to employees for the duration of a post-termination non-compete clause, requiring employers to confirm in writing to employees the exact terms of a non-compete clause before their employment commences, introducing a statutory limit on the length of non-compete clauses, or banning the use of post-termination non-compete clauses altogether.  It is quite possible that we will therefore see new law in this area during 2021, not least as the government would seem to believe that restricting the use of such non-compete clauses will encourage entrepreneurs and start-ups to assist the nation's economic recovery post-pandemic.  

Extending ban on exclusivity clauses. On 4 December 2020, BEIS opened another consultation on measures to extend the ban on exclusivity clauses in employment contracts to cover those earning under the Lower Earnings Limit, currently £120 a week. This would prevent employers from contractually restricting low earning employees from working for other employers. This consultation, which was opened in response to the impact of the pandemic on low earners, also closes on 26 February 2021.  It is highly likely that this will make law shortly thereafter.  

Points-based immigration system.  The new UK immigration system now applies to all newly arriving non-British and Irish citizens from 1 January 2021 and from 1 July 2021, it will no longer be possible for existing non-British and Irish citizens to apply for settled status under the EU Settlement Scheme.  Employers wishing to employ from beyond Britain and Ireland will now need to grapple with the complexities of the new immigration system but can we expect - given that the system was largely designed around a pre-pandemic economy - changes to be made throughout 2021?  It might be optimistic conclude that version 1 of the new system will remain the final version..
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