What’s on the UK Employment Law Timetable

An overview of the legal changes you can expect in 2021

Previously all changes to UK employment law were introduced in either April or October. The Coalition Government abolished this set timetable and now changes to employment law take place at different months throughout the year.

Employment law changes in 2020 were heavily based on the Coronavirus and significant pieces of planned legislation were sidelines. Therefore 2021 could see significant changes amid the ongoing uncertainty resulting from Brexit on 31 December 2020.

National Minimum Wage
April 2021 The government has announced the annual increases in national minimum wage rates to apply from 6 April 2021, taking the minimum salary of those aged 23 or over to £8.91 per hour.

From 6 April 2021, the new hourly rates recommended by the Low Pay Commission and accepted by the government will be:

  • Age 23 or over (national living wage rate): £8.91 (up 2.2% from £8.72)
  • Age 21 to 22: £8.36 (up 2% from £8.20)
  • Age 18 to 20: £6.56 (up 1.7% from £6.45)
  • Age 16 to 17: £4.62 (up 1.5% from £4.55)
  • Apprentice rate: £4.30 (up 3.6% from £4.15)

Previously, the national living wage rate has applied only to those aged 25 or over. Where an employee is given accommodation as part of their package, the offset which can be deducted from their pay will increase to £8.36 per week (up 2% from £8.20).

The reduction of the age threshold for the highest rate from 25 to 23 will mean a large number of employees will attract a higher than expected jump in their hourly rate in April 2021 which could have a significant impact on your wage bill.

Employment Tribunal Award Limits
April 2021 The government has announced new limits on certain employment tribunal awards and other amounts payable under employment legislation. The new limits are as follows:

  • A “week’s pay” for the purposes of calculating both the basic award in unfair dismissal cases and statutory redundancy payments will be capped at £544 – the current limit is £538.
  • The maximum compensatory award for unfair dismissal will now be £89,493 – the current limit is £88,519. Since July 2013, there has also been a separate cap of one year’s gross pay on “ordinary” unfair dismissal compensatory awards – the maximum award will therefore now be the lower of one year’s gross pay and £89,493. The cap on unfair dismissal compensation does not apply where the reason for dismissal was that the employee carried out health and safety activities, made a “protected disclosure” or was selected for redundancy for one of those reasons. Further compensation can also be recovered where an additional award is made because the employer has failed to comply with a reinstatement or re-engagement order.
  • The limit on the daily amount of guarantee payments will remain at £30.

These new limits will apply to dismissals that take effect on or after 6 April 2021.

Statutory Payment Rates
April 2021 The Government has published the statutory payment rates for maternity pay, paternity pay, shared parental pay, adoption pay and sick pay from April 2021.

The rate of statutory sick pay is also proposed to increase from £95.85 to £96.35 on 6 April 2021.

The increases to maternity pay, paternity pay, shared parental pay, adoption pay normally occurs on the first Sunday in April, which in 2021 is 4 April. The standard weekly rate will increase from £151.20 to £151.97

To be entitled to these statutory payments, the employee’s average earnings must be equal to or more than the lower earnings limit. This amount for April 2020 was £120 per week, the amount that will apply from April 2021 has not been announced yet.

European Nationals and Settled Status
30 June 2021 Freedom of movement rights for European Economic Area (EEA) and Swiss nationals residing in the UK ended on 31 December 2020 (the end of the Brexit transition period). Eligible employees need to apply for pre-settled or settled status under the EU settlement scheme by 30 June 2021.

Pre-settled or settled status is evidence that the individual resided in the UK prior to the end of the Brexit transition period and has a right to live in the UK. A European national with settled status may also be eligible to apply for British citizenship.

The repercussions of not applying for pre-settled or settled status are not entirely clear. However, it is anticipated that EEA and Swiss nationals living in the UK prior to 1 January 2021 will need to evidence their EU settlement scheme status to prove their right to work in the UK in the future, as well as to access public services such as the NHS and certain state benefits (if eligible), open bank accounts and enrol in educational institutions.

Return to the UK Employment Timetable Directory Read About The Plans For 2022 And Beyond
EMPLOYEE HANDBOOK REVIEW

An hour of my time can save MANY hours of your time!
I can review your Employee Handbook for compliance with employment legislation and provide a written report detailing which sections of your handbook are out of date because legislation has changed and therefore putting your business at risk. I will also include my general observations of how the user friendliness of your Employee Handbook could be improved.

You will receive your report within 5 working days of sending me your handbook.

Return to the UK Employment Timetable Directory
EMPLOYEE HANDBOOK REVIEW

An hour of my time can save MANY hours of your time!
I can review your Employee Handbook for compliance with employment legislation and provide a written report detailing which sections of your handbook are out of date because legislation has changed and therefore putting your business at risk. I will also include my general observations of how the user friendliness of your Employee Handbook could be improved.

You will receive your report within 5 working days of sending me your handbook.