Key employment law updates | September 2021

Consultation on potential right to request flexible working from day 1

The Department for Business, Energy, and Industrial Strategy (BEIS) have launched a consultation to reform the Flexible Working Regulations. Consultation document, 'Making flexible working the default', was published on 23 September 2021. The government is keen to encourage genuine two-sided flexibility and reflect the changes to working which have been brought about by the pandemic.  

The consultation sets out five proposals for reshaping the existing framework:

  • Making the right to request flexible working a "day one" right.
  • Making changes, if necessary, to the eight business reasons for refusing a request to work flexibly.
  • Requiring the employer to suggest alternative to the arrangement suggested by the employee.
  • Changing the administrative process underpinning the right to request flexible working.
  • Raising awareness of the existing right of employees to request a temporary flexible working arrangement.

The consultation also covers measures to promote greater transparency about flexible working and the proposal to require employers to say whether jobs may be open to flexible working in the advert.

Even if implemented in full, the proposals do not make flexible working the default position, it will remain open to employers to reject any flexible working request. It does contain proposals to broaden the scope of the current right which has given employees with 26 weeks' continuous service the right to request flexible working since 2014.

The consultation closes on 1 December 2021 and seeks the views of both indivudals and businesses, including employers and employees, business representative groups and unions. Responses can be submitted online or by email to  [email protected].

National Insurance increase from April 2022 and subsequent introduction of health and social care levy

The government announced a temporary increase of 1.25% in rates of National Insurance contributions on 7 September 2021. The National Insurance Contributions (NIC) will return to current levels in April 2023 upon the introduction of a new health and social care levy.

The increase will apply to classes 1 (employee and employer) and 4 (self-employed), both main and higher rates. The flat rates for classes 2 (self-employed) and 4 (voluntary contributions) will not be increased. The rates will be legislated for in the Finance Bill 2022.

Current National Insurance Contributions (2021-22)

Employee main/higher rate – 12%/2%

Employer – 13.8%

2022-23 National Insurance Contributions

Employee main/higher rate – 13.25%/3.25%

Employer – 15.05%

Charged on all earnings/profits above: 2021–22 thresholds

Employee main/higher rate – £9,568

Employer – £8,840

The rates are to be increased to help pay for the impact of the coronavirus pandemic on the NHS and to address the funding gap for health and social care. From April 2023 the increase will be legislated as a “health and social care levy” once the HMRC’s systems are updated. The existing reliefs for employers will continue to apply once the increase is separated into the levy. The revenues generated will be ringfenced for health and social care. The government will also increase the rates of dividend tax by 1.25% from April 2022.

HMRC will be responsible for administering the new levy, and it will be collected through Pay As You Earn and Income Tax Self-Assessment.  Details of the plans are set out in the policy paper "Build Back Better: Our Plan for Health and Social Care".

State pension triple lock temporarily scrapped for 2022-23

The triple lock formula is used to guarantee pensioner’s incomes rise by either September’s rates of inflation, earnings growth or a guaranteed minimum of 2.5%, whichever is greater.

Due to the pandemic, concerns were raised that there was an artificial boost in wages which would have prompted an 8% rise in the state pension next year.  However, the government have announced that legislation is to be introduced to ensure that for 2022-23, the basic and new State Pension increase will be the greater of 2.5% or in line with inflation. Thereby creating a ‘double lock’ with the average annual salary increasing being disregarded.

These measures are temporary, for one year only.

Pledge for businesses to support employees affected by miscarriage

The Pregnancy Loss Pledge created by the Miscarriage Association aims to set out standards to ensure employees experiencing miscarriage including their partners, are supported and receive time off work.

Employers who sign up agree to:

  • Put in place a pregnancy loss policy or guidance.
  • Ensure miscarriage is referred to in workplace policies relating to sickness and bereavement.
  • Implement pregnancy-related leave and ensure staff feel able to take the time off if they need.
  • Create a supportive environment where pregnancy and loss can be discussed without fear of discrimination.
  • Show empathy and understanding towards staff during such circumstances.
  • Encourage line managers to access guidance on supporting someone going through pregnancy.
  • Be responsive and show flexibility when supporting people back to work.

A survey conducted by the Miscarriage Association showed that half of the respondents felt they returned to work before they were ready, with many not being told about their right to pregnancy-related leave. There is currently no statutory entitlement to paid leave for those who lose a baby before the 24th week of pregnancy. Beyond the 24th week mark, mothers are entitled to full maternity leave and both parents are entitled to two weeks of paid Parental Bereavement Leave.

UK job vacancies surge to above 1 million for first time ever

The Office for National Statistics ('ONS') has reported that the number of vacancies between June to August rose above one million for the first time since records began in 2001. The figures also show that:

  • Employee numbers were back to pre-Covid-19 levels.
  • August payrolls showing a monthly increase of 241,000 to 29.1 million.
  • Decrease in unemployment by 0.3% since the previous quarter.
  • Fewer potential redundancies notified in August than at any point since the start of last year.

The surge in job opportunities, especially in transport and logistics, computing and telecoms, education, customer service and social care, appear to reflect changes in the labour market as the UK returns to normality post-pandemic however, the ONS also noted that the recovery has not been even, with areas such London and sectors such as hospitality still down with young generations facing biggest job losses. There are fears that these employee shortages will dampen growth linked to a rise in temporary vacancies suggesting employers need to provide employees with permanent contracts to provide security.

Promoting apprenticeship opportunities with new online service

The Department for Education and HM Treasury have launched an online service intended to help businesses create apprenticeship opportunities so more people can get the jobs they want.

The aim is to make it easier for large employers that pay the Apprenticeship Levy to spend their levy funds. Levy paying employers could already transfer up to 25% of their annual levy to support other employers to take on apprenticeships, but now they can also advertise funding pledges which will enable more businesses to apply for funds, and so create increased apprenticeship opportunities. Employers will be able to specify the type of apprenticeships they wish to fund through filters such as location and sector enabling a much wider range of businesses to browse and apply for available funds. The employer can then create their transfer pledge through their apprenticeship service account which will be advertised via the online service.

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