2020 is likely to be a busy year not only for employment law developments but also the UK's immigration system, as with Brexit and a majority Conservative government there are going to be a number of changes ahead that will impact on businesses' people strategy. Alice Foster, Trainee Solicitor, summarises the key developments to look out for over the next year.
The Queen's Speech
The Queen's Speech was delivered on 19 December 2019, and this outlined legislation that the Government proposed to either carry over, or introduce, into the forthcoming parliamentary session.
The legislative programme includes some notable proposals from an employment perspective, as summarised below. In addition to this, the Queen's Speech also identified the main immigration legislation that will be introduced to help deliver the UK's exit from the EU. For more details on the 2020 immigration bills, along with the latest developments on the UK's future immigration system post January 2021, please read Gemma Robinson's article here.
The Government has proposed a new Employment Bill which would encompass the following:
- A single labour market enforcement agency. This body would be designed to protect the employment rights of the most vulnerable workers, ensuring that they are aware of their rights and how to exercise them. The new body will focus on the areas in which the Government has promised additional enforcement, such as holiday pay for vulnerable workers and umbrella companies. A consultation on these proposals, which arose under the Good Work Plan, closed on 6 October 2019.
- Tips and service charges. The Government is proposing legislation which would require employers to pass on all tips and service charges to workers in full. The legislation would be supported by a statutory Code of Practice which would set out principles to ensure that distribution takes place on a fair and transparent basis.
- Zero-hours contracts: right to request a more predictable and stable contract. All workers would have the right to request a more predictable and stable contract after 26 weeks' service. This proposal is designed to mitigate the issue of 'one-sided flexibility' where workers stay on atypical, insecure contracts for long periods of time. The Department for Business, Energy and Industrial Strategy (BEIS) published a consultation on 19 July 2019 that stated the government should adopt a right for workers to move onto a contract that reflects their normal working hours. For instance, after 26 weeks service, a worker on a zero-hours contract who generally works at least 30 hours per week would be able to request a contract that guarantees at least 30 hours work per week. We will wait to see whether this example is incorporated into the new Employment Bill.
- Extending redundancy protection in the context of pregnancy and maternity. This is an amendment that has previously been brought forward by the government but never received Royal Assent. By way of background, in July 2019, the Government published its support for a BEIS consultation proposal to extend protection for pregnant women and new mothers against redundancy. At present, before making a woman on maternity leave redundant, an employer must offer her a suitable alternative vacancy where one is available. However, the Queen's Speech confirmed that the government intends to introduce legislation this year to extend redundancy protection so that it applies from the point an employee notifies her employer that she is pregnant up until six months after the end of her maternity leave.
- Extended leave for neonatal care. A response to the Government consultation on a new right to neonatal leave and pay to support parents of premature or sick babies is awaited.
- A week's leave for unpaid carers. This was a proposal made in the Conservative Party's election manifesto but further details are anticipated in 2020.
- Making flexible working the default positon. In the Conservative Party's election manifesto, the Government proposed making flexible working the default position unless an employer has a good reason. It is anticipated that the government will consult on this proposal during 2020.
- Brexit. For information summarising the main Brexit-related Bills, please see Gemma Robinson's article here.
Other changes on the horizon in 2020
In addition to the Employment Bill, there are already a number of changes in the pipeline relating to employment law. In summary, the key changes are as follows:
- Reform of IR35 arrangements - With effect from April 2020, medium and large companies in the private sector that contract with personal service companies for the provision of workers' services will have to account for tax and national insurance through PAYE. For more information on this please see Nathalie Ingles' Article on the IR35.
- Termination Payments - Termination payments in excess of £30,000 will be subject to employer Class 1A NICs.
Written Particulars - Employers will be required to provide a written statement of employment particulars from day one of employment. This provision will be extended to all workers, not just employees.
Changes to minimum wage and calculating holiday pay - On 1 April 2020 the National Minimum Wage will increase. The method of calculating an employees' holiday pay will also change from 6 April 2020.
Agency workers - The Swedish Derogation will be abolished and by no later than 30 April 2020, work agencies must provide agency staff whose existing contracts contain a Swedish Derogation with a written statement confirming that, as of 6 April 2020 the provision no longer applies.
Parental Bereavement Leave – In line with two sets of Regulations laid before Parliament, from 6 April 2020 all employed parents who lose a child under the age of 18 or suffer a stillbirth from 24 weeks of pregnancy will have a statutory right to two weeks leave. The two weeks can either be taken together or in two separate blocks of one week each. Employees who have at least 26 weeks' service, and meet the minimum earnings criteria, will be entitled to statutory parental bereavement pay which will be paid at either £151.20 per week or 90% of weekly earnings if this amount is lower.
Grandparents' leave - The Government may also extend shared parental leave to Grandparents, but this has been pushed back and there is speculation the proposals have been dropped.
Confidentiality – Reform is expected in relation to confidentiality and sexual harassment in the workplace.
Pay reporting - Following the gender pay gap reporting introduced in 2017, there has been an increased focus on requiring pay reporting in relation to other groups:
- Ethnicity pay reporting reform is expected following a consultation in 2018.
- Chief executive pay reporting was introduced in relation to publically listed firms with more than 250 employees. Specifically, employers must disclose the ratio between chief executive pay and that of their average workers. Consequently executive pay ratios are expected to become a key issue in 2020. For more information on this please see Kevin Lau's article here.
There are also a number of cases to look out for as they make their way through the courts shown in the table below:
For more information, please contact Alice Foster, Trainee Solicitor on [email protected] or +44117 915 4979.