Employment law in 2020 – what can we expect?
With the new year upon us, a newly formed Government in place and details of the Queen’s Speech set out just before Christmas, below is a summary of the key employment law changes you can expect to see in 2020.
In another update for the new year, employmentlaw@work is changing its name! From the next edition it will be called “Employment Law Now” – you’ll still be receiving the same great content, news and everything you need to know in the world of employment law, but under the new title. We hope you continue to enjoy it. Also, look out for your invitation to our next update seminar, also called Employment Law Now – it will be with you soon, and we hope to see you there.
The new European Union (Withdrawal Agreement) Bill (“WAB”), which would implement the Withdrawal Agreement (“WA”) reached with the EU in October 2019, passed its second reading on 20 December 2019 and will be debated further this month. Assuming the WAB passes into UK law, the UK and the EU will need to ratify the WA before it can come into force. If this happens, the UK will leave the EU on 31 January 2020. There will then be a transition period until 31 December 2020 during which time the UK will still follow the EU’s rules and free movement will continue.
Provisions safeguarding existing EU-derived workers’ rights, which were contained in the previous version of the WAB, have been removed from the new version. The Government has said that it intends to legislate separately by introducing a new Employment Bill to protect and enhance workers’ rights.
National living wage (“NLW”) and national minimum wage (“NMW”)
The following new rates will take effect from April 2020:
– NLW for workers aged 25 and over will increase from £8.21 to £8.72 per hour.
– NMW will increase as follows:
– for 21 to 24 year-olds – from £7.70 to £8.20 per hour;
– for 18 to 20 year-olds – from £6.15 to £6.45 per hour; and
– for 16 to 17 year-olds – from £4.35 to £4.55 per hour.
– Apprentice rate will increase from £3.90 to £4.15 per hour.
From 6 April 2020, a written statement of terms must be given to all workers (not just employees) on or before the first day of employment (rather than within two months of employment starting). In addition, certain new information must be included in the statement. For further details, see our earlier update here. Employers should review their standard employment contracts in good time.
Holiday pay reference period
From 6 April 2020, the Working Time Regulations 1998 will be amended to increase the reference period for determining an average week’s pay (for holiday pay purposes) 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). This will affect employers who engage workers on variable pay.
Agency workers (Swedish derogation)
From 6 April 2020, the “Swedish derogation” in the Agency Workers Regulations 2010, which currently allows employment businesses to avoid pay parity between agency workers and direct employees if certain conditions are met, will be removed. Employers who regularly use agency workers should be live to the issue of increased costs.
Employer NICs on termination payments over £30,000
From 6 April 2020, all termination payments above £30,000 will be subject to employer’s NICs (but will remain free of employee’s NICs). Employers will want to bear this in mind for large settlement sums being negotiated between now and April 2020.
Off-payroll working rules
Changes to the off-payroll working rules (known as “IR35”) are expected to come into effect on 6 April 2020. The changes will have significant implications for businesses engaging contractors. For further details of the proposed changes, see our earlier updates here and here. However, the government announced yesterday that it is now reviewing the planned changes. The review will run until mid-February 2020 and will consider whether any further steps are needed to ensure that the changes are implemented smoothly. Employers should continue to plan ahead for the changes as there is no mention that they will be abandoned.
Parental bereavement leave and pay
We await draft regulations during 2020 to implement a new right for employed parents who have lost a child to two weeks’ paid bereavement leave.
New Employment Bill
The Queen’s Speech in December 2019 set out the Government’s proposals for a new Employment Bill which would cover the following key issues:
- The right to request a more predictable contract (this was previously mentioned as part of the Government’s Good Work Plan – see our earlier update here for further details);
- Extension of 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 to support parents of premature or sick babies; and
- Following consultation, making flexible working an employer’s default position (unless the employer has a good reason to do otherwise).
Shared parental pay and discrimination
We expect the Supreme Court to make a final decision this year (in the case of Ali v Capita and Hextall v Chief Constable of Leicestershire Police) on the question of whether it is discriminatory to pay male employees on shared parental leave less than female employees on maternity leave.
In July 2020, the Supreme Court will hear Uber’s appeal against the Court of Appeal’s decision that its drivers are workers for the purposes of the Employment Rights Act 1996, the National Minimum Wage Act 1998 and the Working Time Regulations 1998. This is a significant case for employment status issues.