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13 January 2021
Although the COVID-19 pandemic still dominates the agenda, the employment law landscape continues to evolve. This article reviews the significant developments in 2020 (eg, the establishment of the furlough scheme and various other emergency measures) and looks ahead to what is on the horizon for employment law in 2021 (eg, the IR35 reform, the possible introduction of the new Employment Bill and the impact of the Brexit trade deal).
Many of the employment law changes seen in 2020 were introduced in response to the COVID-19 pandemic. The most significant was the establishment of the furlough scheme. There have also been various other emergency measures – ranging from the changes to sick pay entitlement to the new right to carry forward holiday that could not be taken due to the pandemic.(1)
The pandemic understandably delayed the progress of most other non-COVID-19 legislative developments. Nonetheless, several changes to employment law took place during early 2020 because the legislation to bring those changes into effect was already in place before the pandemic took hold. For example:
The Equality and Human Rights Commission (EHRC) also issued significant new guidance on harassment (for further details please see "Significant new guidance on harassment from EHRC").
The courts were also affected by COVID-19, but nonetheless managed to publish some important decisions – most notably, the welcome decision in Morrisons (in which the Supreme Court concluded that an employer was not vicariously liable for misuse of personal data by a rogue employee) (for further details please see "Employer not liable for misuse of personal data by rogue employee").
The UK employment tribunals have rapidly implemented new technology for hearings in order to deal with the growing backlog of claims, alongside new rules of procedure designed to make hearings more efficient and flexible (for further details please see "Employment tribunals – will Winter 2020 see a flurry of claims?").
Finally, at the end of 2020, the government finally struck a trade deal with the European Union – just before the Brexit transition period ended – with some interesting potential immediate and longer-term implications for UK employment law (for further details please see "What does the Brexit trade deal mean for employment law?").
COVID-19 will continue to dominate government and parliamentary time in the weeks and months ahead, so there may be little room for new legislation or policymaking.
However, the government recently launched two consultations:
The legislative change with the biggest impact on the immediate horizon is undoubtedly the IR35 reform. At present, the changes are set to take place in April 2021. The new rules require medium and large-sized businesses in the private sector to assess the employment status of contractors who provide their labour through their own intermediary and, if appropriate, operate pay-as-you-earn and national insurance contributions (employers should not leave planning to the last minute). These changes were originally intended to take effect in April 2020 but were delayed due to the pandemic. There will be calls for further delay but, at the time of writing, the changes are still expected to take effect in April 2021.
Tthe new Employment Bill, which was originally promised in the Queen's speech in December 2019 but was also delayed due to COVID-19, may be published in 2021. The bill is likely to introduce or pave the way for various new employment laws, including laws which:
The government committed some time ago to legislating on non-disclosure agreements to make them void unless they meet certain requirements and employees have received specific legal advice thereon. Legislation on this may emerge during 2021, either in the Employment Bill or separately. The EHRC may start consulting on a new Code of Practice on Harassment, building on the major guidance that it published in 2020 (for further details please see "Significant new guidance on harassment from EHRC"). There may also be some progress on ethnicity pay reporting.
More immediately, two significant Supreme Court decisions are expected – in the case concerning whether Uber drivers have worker status and the Royal Mencap Society case (about whether sleep-in workers are entitled to national minimum wage only when they are awake and working).
Elsewhere in the courts, decisions about COVID-19-related issues (eg, disputes about health and safety at work or furlough) are likely.
Perhaps the most interesting issue to watch is whether the UK government seeks to change any aspect of EU-derived employment law. Changes to employment rights that affect trade or investment would breach the government's non-regression promise in the Brexit trade deal, but more minor changes are allowed, and it remains to be seen whether the government will act early to exercise its new freedoms or whether it is unwilling to rock the boat with the European Union (for further details please see "What does the Brexit trade deal mean for employment law?"). Meanwhile, the Supreme Court will consider three cases on holiday pay in 2021, which could potentially provide some indication of its approach to settled European Court of Justice case law in the new post-Brexit world.
For further information on this topic please contact Richard Moore or Gemma Taylor at Lewis Silkin by telephone (+44 20 7074 8000) or email (firstname.lastname@example.org or email@example.com). The Lewis Silkin website can be accessed at www.lewissilkin.com.
(1) Further information on COVID-19 and employment law is available here.
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