Last reviewed 9 December 2020
As we reach the end of this difficult year, Ben McCarthy, lead researcher and employment law writer at Croner-i, takes a look back at the key developments that we should all be aware of.
2020 was already going to be a busy year for employment law, with the expected implementation of the Good Work Plan in April and the ever-present Brexit developments at the forefront of employers' minds as January dawned. But then came the coronavirus pandemic, and the entire world changed seemingly overnight. With this in mind, employers may be forgiven for not focusing on the other major changes that have taken place.
CEO pay ratio reporting
From 1 January 2020, UK listed companies who have in a year, on average, more than 250 employees were expected to compare their CEO's most recent remuneration against that of their full-time employees. The hope was that this disclosure, and the required disclosure of supporting and explanatory information, allowed interested parties inside, and outside of, the organisation to understand how remuneration policies across the organisation compared to the executive pay policy. This is now an annual requirement.
Remember that this requirement only applies to companies who are quoted on the UK Official List, New York Stock Exchange, NASDAQ and a recognised stock exchange in the European Economic Area. Companies listed on the Alternative Investment Market do not fall within this category.
The Good Work Plan
In July 2017, former Labour MP Matthew Taylor published a report on modern working practices, focusing on the reasons behind productivity issues in the workplace. Within the report, he recommended several changes to employment law in order to improve conditions within companies, which led to several consultations held by the Government. Their ultimate response was the Good Work Plan, announced in December 2018, which set out what they were going to do over the next few years and confirming key dates for the implementation of numerous new laws.
From 6 April 2020, the following came into effect.
A statement of main terms of conditions (SMTs) had to be provided from day one of employment to both employees and workers. Previously, this was only required to be provided to employees, and employers had two months in which to do so.
SMTs also needed to contain additional details for the first time:
the terms and conditions relating to work extended to cover terms relating to normal hours of work, days of the week the worker will be required to work and whether these days/hours may vary
terms relating to other forms of paid leave such as family-friendly leave
details of other employee benefits, not just those relating to pay, such as benefits in kind or financial benefits
terms relating to probationary periods including those in relation to length and conditions
details of training provision and requirements.
The holiday pay reference period, which is used to calculate the average pay of those who work irregular hours, was extended from 12 to 52 weeks. The aim of this development was to provide a fairer approach to holiday pay when workers are carrying out flexible hours.
Agency work-seekers were given right to receive a key information document to help them make informed choices about the work they accept. This document is required to clarify specific matters including the type of contract the worker is employed under and their minimum rate of pay.
Employers were also no longer able to make use of Swedish derogation contracts for agency workers as these contracts, which allowed employers to avoid providing agency workers with equal pay after 12 weeks' of an assignment, became unlawful. All agency workers will become entitled to equality of pay, when compared to comparable full-time employees, once they reach 12 weeks' service within one assignment. Employment businesses had to notify their agency workers of this change by providing them with a written statement by 30 April 2020.
Parental Bereavement Leave
From 6 April 2020, working parents were for the first time given the right to take a period of statutory leave following the loss of a child under the age of 18, or a still-birth after 24 weeks. Previously, there had been no rights afforded to employees to take any sort of bereavement leave and whether this was permitted was purely down to an employer.
From day one of their employment, employees can now take up to two weeks of leave within 56 weeks of their bereavement, which can be taken in blocks of one single week, two separate blocks of one week of leave, or two weeks together. If they have worked for a company for at least 26 weeks, they may also be entitled to statutory bereavement pay, rates for which being set at other family leave amounts.
As the pandemic raged, questions began to be asked as to whether Brexit would be delayed as a result. However, the Government remained firm that this would not be the case and confirmed in July what new immigration laws would look like following the end of the transitional period from 1 January 2021. The vast majority of individuals looking to come and work in the UK from this date are expected to take the “skilled worker route”, which involves them attaining at least 70 points through meeting certain criteria.
They need to have 50 mandatory points and 20 additional tradeable points in order to be granted entry. This includes being offered a job from a company approved to sponsor individuals from overseas. For those wishing to take on foreign workers next year, they must submit an application for a license as soon as possible.
Despite all the other issues faced this year, 2020 was likely one of the biggest years for employment law we've seen. Now, as we enter 2021, with ongoing Brexit negotiations, the end of the furlough scheme on the horizon, and more laws expected from the Good Work Plan, employers must keep up to date with information coming from the Government.
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