12 Employment law developments of 2020

As 2020 draws to a close, we summarise a selection of key legislative changes that have taken place over the course of the year.

1. We all learnt the word furlough!

Employers have faced a myriad of workforce management challenges this year as a result of the COVID-19 pandemic, not least adapting to the government’s new furlough scheme. Allowing businesses to pay employees with the help of government support, without providing them with work, represents an unprecedented initiative that has benefited businesses of every scale.

2. Temporary changes were made to sick pay

Statutory sick pay became payable by the employer from the first day of a worker’s absence, removing the former 3 day waiting period, where they were self-isolating under advice from the official health authorities in England, Scotland or Wales. Small and medium sized employers were also allowed to claim back up to 2 weeks statutory sick pay paid to employees for sickness absence due to COVID-19.

3. Workers gained increased rights to carry over holiday

Again, legislative changes made in response to the pandemic, have enabled workers to carry over up to four weeks of their accrued statutory annual leave into the next two leave years. This applies where it is not reasonably practicable for the worker to use some or all of the time they have accrued in the current leave year as a result of the virus.  Employers will need to take care to manage annual leave requests over the next two years as a result.

4. Gender pay gap reporting was suspended

Due to the unparalleled pressures placed on UK businesses by the pandemic, the government suspended the requirement of reporting gender pay gap data for the 2019/20 period. It is still not clear whether the requirement to publish this data will be brought back or whether this year’s data will be missed entirely. Employers are however encouraged to continue this disclosure where possible to prevent the initiative from losing focus. 

5. Written statements for workers and additional information required

Employers must now provide a written statement of terms to all workers, in addition to employees. A list of additional information must now also be included to provide a greater degree of certainty regarding working arrangements. These statements must also now be provided on the first day of the workers employment at the latest. All three of these changes apply regardless of length of service and have been effective since 6 April 2020.

6. Annual increases to statutory payments and employment tribunal awards were made

Compensation limits for terminations occurring after 6 April 2020 have been raised. For redundancy payment calculations, the new maximum limit on a week’s pay is £538. For general unfair dismissal awards, the maximum basic award is now £16,140 and the maximum compensatory award is £88,519. £6,562 is now the minimum basic award for unfair dismissals specifically relating to trade union membership, health and safety duties, pension scheme trustee duties, or employee representatives. In addition, the new weekly rate of statutory sick pay is £95.85 and the new weekly rate of parental statutory entitlements (SMP etc) is £151.20.

7. The right to parental bereavement leave and pay was introduced

In a much-welcomed step, employed parents who have lost a child under the age of 18, or suffered a stillbirth from the 24th week of pregnancy, have been entitled to take statutory leave since April this year. This right allows for two weeks leave whether they are consecutive or not. Statutory pay is limited to employees with more than 26 weeks continuous service and who earn in excess of the lower earnings limit.

8. Termination payments became subject to employer NICs

Where a termination payment is made to an employee in excess of £30,000, the payment is now subject to employer national insurance contributions. Although this development was originally planned for April 2018, it was postponed and has since come into effect from April 2020.

9. NMW rules were amended

Where businesses fail to pay their workers the national minimum wage the government now has the right to name them publicly where they exceed £500 in payment arrears. Further developments include enabling employers to select the most suitable ‘calculation year’ for pay monitoring purposes, expanding how ‘salaried hours workers’ are defined and guaranteeing that those workers’ entitlement to the national minimum wage remains unaffected by any premiums paid to them (ie undertaking work on a bank holiday).

10. Workplaces had to become COVID-secure

With the lifting of lockdown, employers were required to follow industry specific guidance detailing how to best protect their workforce. The primary methods were implementing appropriate social distancing techniques and providing adequate handwashing or sanitising facilities, PPE and adhering to face covering regulations. Office layouts and working practices had to be adapted to comply with the new requirements.

11. The cap on public sector exit payments came into force

As of November 2020, the government has introduced a new cap of £95,000 to be applied to exit payments made in the public sector. The change applies where a public sector employee or office holder receives a payment in relation to their loss of employment or office position. The are some exclusions to the cap, such as payments made in respect of death in service.

12. The new immigration system went live

From 1st December, the new immigration system created as a result of the UK leaving the European Union will be piloted. The changes include the introduction of a skilled worker route, which entails an applicant having an approved sponsoring employer and an employment offer regarding one of the eligible skilled occupations. Those workers will no longer be subject to the previous maximum stay of 6 years. For further information see our article UK government announces introduction of points-based immigration system and Shoospeak HR podcast episode The new immigration rules.