Following the Chancellor of the Exchequer’s 2021 Budget to parliament on 3rd March, this bulletin includes a summary of its employment law implications and also details the further expansion of testing access to all employers. I also take a look at further employment law changes coming into effect in April and finally also mention those in the pipeline but with no implementation date yet.

Furlough extended until September 2021

The Coronavirus Job Retention Scheme (CJRS) will be extended for a further five months from May until the end of September 2021. Employees will continue to receive 80% of their current salary for hours not worked. There will be no employer contributions beyond National Insurance contributions (NICs) and pensions required in April, May, and June. From July, the government will introduce an employer contribution towards the cost of unworked hours. This will be 10% in July and 20% in August and September.

Please email me at kcoleman@excellolaw.co.uk for a detailed briefing on the furlough scheme including obtaining agreement to furlough, documentation required, implications on holiday entitlement, and pay.

Continued tax exemptions for COVID-19 tests, home office expenses, and combatting COVID-19 fraud

The Chancellor announced that the government will invest over £100 million in a Taxpayer Protection Taskforce of 1,265 HMRC staff to combat fraud within COVID-19 support packages, including the CJRS and SEISS, representing one of the largest responses to a fraud risk by HMRC. In addition, the government will raise awareness of enforcement action in order to deter fraud.

Apprenticeships
The Chancellor announced that the payments made to employers in England who hire new apprentices will be extended and increased. Employers who hire a new apprentice between 1 April 2021 and 30 September 2021 will receive £3,000 per new hire, compared with £1,500 (or £2,000 for those aged 24 and under) under the previous scheme. This is in addition to the existing £1,000 payment the government provides for all new 16 to18-year-old apprentices and those aged under 25 with an Education, Health, and Care Plan.

Portable apprenticeships
The government will introduce a £7 million fund from July 2021 to help employers in England set up and expand portable apprenticeships. This will enable people who need to work across multiple projects with different employers to benefit from the high-quality, long-term training that an apprenticeship provides. Employers will benefit from access to a diverse pool of apprenticeship talent. Employers will be invited to bring forward proposals as will the Creative Industries Council in recognition of the potential benefits of this new approach for the creative sector.

Further expansion of workplace testing

In my last bulletin, I detailed that the availability of testing kits had been extended to all employers with more than 50 employees. Last week, this was again extended, this time to all employers. For details please see:
https://www.gov.uk/government/news/free-rapid-tests-for-all-businesses-for-regular-workplace-testing

Further employment law changes effective from April 2021

In the previous bulletin, I detailed the rise to statutory pay rates applicable from April 2021 – see a link to the relevant blog on my website:
Increases to Statutory Rates from April 2021 | Coleman Employment Law (colemanhrlaw.co.uk)

Other changes are summarised below:

  1. The Order has been passed which increases compensation limits for certain tribunal awards and other statutory payments from 6 April 2021.In cases involving dismissal, the new figures will apply where the effective date of termination falls on or after 6 April 2021. The increases are based on the September 2020 retail prices index (RPI) which increased by 1.1% since the previous year.

The Order includes the following new figures:

  • The limit on a week’s pay increases from £538 to £544.
  • The maximum compensatory award for unfair dismissal increases from £88,519 to £89,493 (or if lower, 12 months salary).
  • The minimum basic award for certain unfair dismissals (including health and safety dismissals) increases from £6,562 to £6,634.
  1. Changes affecting the engagement through personal service companies of consultants, freelancers, and subcontractors.Previous bulletins have detailed that significant obligations on organisations to determine IR35 status, previously limited to the public sector, are being extended to medium and large private-sector employers.The new rules were due to come into effect on 6 April 2020 but as a result of the pandemic were delayed to 6 April 2021.

    On 3 March 2021, HMRC published changes to its off-payroll working Guidance. Most notably, the changes include:

  • Confirmation that if a worker has no interest in a company, the company will not be a relevant intermediary. It was previously unclear whether a self-employed worker operating through a corporate agency in which they had no interest would fall within the rules following the technical changes referenced in the Spring 2021 Budget and the revised guidance removes that concern and provides more detail about the technical change.
  • Confirmation that a client’s status determination statement (SDS) can be provided through an online portal and expanded guidance on when a new SDS should be provided (dealing with contract extensions and changes to terms, conditions, and working practices).
  • Guidance on the new targeted anti-avoidance rule (TAAR) announced as part of the Spring 2021 Budget.

The draft legislation to implement the technical changes and TAAR has just been published on 11 March 2021.

Expected future changes

In December 2020 the government announced an Employment Bill to introduce a number of changes detailed below. The Bill however has not yet been passed and I’ll update you further if and when any of these changes take effect in law.

  • Legislation to require employers to pass on all tips and service charges to workers and, supported by a statutory Code of Practice.
  • The right for zero-hour workers to request a more stable contract after 26 weeks’ service.
  • Extending the period of redundancy protection from the point an employee notifies their employer of their pregnancy (whether orally or in writing) until six months after the end of their maternity leave.
  • On a new right to neonatal leave and pay, to support parents of premature or sick babies.
  • A week’s leave for unpaid carers.
  • Making flexible working the default position unless an employer has a good reason.