Employment Law Changes

As a rule of thumb: it is important to remember that every April brings new changes to employment legislation. It’s a time to update your staff handbooks and policies with the new changes.

Employment Law changes effective in April to be aware of:

  • IR35

Who the rules apply to:

Some rules already apply to all public sector clients, but from 6 April 2021 medium and large-sized private sector clients also need to apply them. The private sector includes third sector organisations, such as some charities.

The rules apply to all public sector clients and private sector companies that meet 2 or more of the following conditions:

  • you have an annual turnover of more than £10.2 million
  • you have a balance sheet total of more than £5.1 million
  • you have more than 50 employees

Balance sheet total means the total amounts shown as assets in the company’s balance sheet before deducting any liabilities.

COVID-19: The extension of the rules to the private sector was due to take effect from 6 April 2020 but was delayed due to the pandemic.

HMRC has published guidance on the new rules indicating that it would take a ‘light touch’ to compliance in the first year.

  • Unfair dismissal compensation

The maximum compensatory award for unfair dismissal increases from £88,519 to £89,493 for dismissals that take place on or after 6 April 2021 (unlimited for certain automatically unfair dismissals, for example, health and safety or whistleblowing).

  • Personal injury compensation limits

From 6 April 2021, the Vento bands for calculating injury to feelings awards in discrimination claims for England, Wales and Scotland* increase as follows:

Lower band £900-£9,100 (less serious cases)

Middle band £9,100-£27,400 (cases not meriting an upper band award)

Upper band £27,400-£45,600 (the most serious cases)

Exceptionally serious cases could exceed the £45,600 cap.

* These bands do not apply in Northern Ireland.

  • New limits on employment statutory redundancy pay come into force on 6 April 2021.

Employers that dismiss employees for redundancy must pay those with over two years’ service an amount based on the employee’s weekly pay, length of service and age. The weekly pay is subject to a maximum amount. This amount is £544 from 6 April 2021.

  • Statutory maternity, paternity, adoption, shared parental and parental bereavement pay.

The weekly rate of statutory maternity, paternity, adoption, shared parental and parental bereavement pay increases to £151.97 from 4 April 2021.

  • Statutory Sick Pay.

The weekly rate of statutory sick pay increases to £96.35 from 6 April 2021.

  • From 1 April 2021:

Workers aged 23 (note change from 25 years to 23 years) and over: £8.91 an hour (National Living Wage)

Workers aged 21-22: £8.36 an hour

Development rate for workers aged 18-20: £6.56 an hour

Young workers rate for workers aged 16-17: £4.62 an hour

Apprentice rate: £4.30 an hour

The new rates were announced on 25 November 2020 and follow the Low Pay Commission’s recommendations.

The information in this article is believed to be factually correct at the time of writing and publication, but is not intended to constitute advice.  No liability is accepted for any loss howsoever arising as a result of the contents of this article. Specific advice should be sought before entering into, or refraining from entering into any transaction.

Written by
Samantha Wood
samantha.wood@arnoldhill.co.uk