Budget: key points on employment law
The Budget, delivered by the Chancellor on 11 March 2020, contained the following key announcements of relevance to employment law:
- Legislation will be passed allowing for Statutory Sick Pay (SSP) to be paid from day 1 (rather than from day 4) for employees who are sick from COVID-19, or employees self-isolating on advice from NHS 111. SSP will also be available day 1 for carers of those ill with COVD-19 or those self-isolating on advice from 111.
- For these purposes, a fit note from a GP will not be required, 111 will be able to provide verification that the person should refrain from work.
- Small employers (fewer than 250 employees) will get an SSP rebate for up to 14 days per employee who claims SSP for coronavirus-related reasons.
- The Government has confirmed that it will introduce a new right to neonatal leave and pay (up to 12 weeks) for employees whose babies spend an extended time in neonatal care.
- The Government will be consulting shortly on the design of a new in-work entitlement for employees with caring responsibilities, to assist employees in balancing work with caring responsibilities.
- The Government will also consider how to provide "appropriate support" to self-employed parents so they can continue to run their business. It intends to consider this as part of a forthcoming review of parental leave and pay.
IR35 Government Review
On 17 March 2020 the government announced that it is delaying the implementation of IR35 for a year, in light of coronavirus. However, we have still reported below on the recent government review into the proposals on the basis that they are still relevant, albeit not imminently so.
Following its review into IR35, the government published its report and recommendations on 27 February. Key points to note are that:
- The government will legislate to make clear that where a client is wholly overseas, with no UK presence, it need not concern itself with the off-payroll rules. The rules will not apply to such clients (recipients of the services). This means that non-UK clients (with no UK presence) who use UK-based contractors will continue to deal with them as before, through their personal service companies, with tax and NICs being the contactor's problem.
- The government will legislate to place a legal obligation on clients to respond to a request for information about their size from an agency or a worker. This is so that everyone in the chain can have an awareness of whether the arrangement might be in scope of the off-payroll rules, probably a good idea before you negotiate terms and agree a fee. No indication yet about consequences or sanction if client fails to respond.
- The government will legislate "to make clearer the time limits for bringing a status determination challenge" (currently there is no time limit, only a time limit for client to respond).
- The government has made clear that it will not enforce the regime for the first year, unless there is evidence of deliberate non-compliance.
April 2020 increases in statutory pay rates and compensation limits
From 6 April 2020 the following new rates and limits will apply:
- The maximum compensatory award for unfair dismissal will be the smaller of ££88,519 (was £86,444) or 52 weeks' salary
- The cap on a week's pay for unfair dismissal basic awards and statutory redundancy payments will be £538 (was £525).
- Statutory sick pay will be £95.85 (was £94.25).
- Statutory maternity pay. paternity pay, adoption pay and shared parental pay will be £151.20 (was £148.68).
- Legislation will be passed shortly allowing for SSP day 1 for those suffering from COVID, or those self-isolating on advice from 111, or those caring for those ill with COVD or self-isolating on advice on 111.
- For these purposes, a fit note from GP will not be required, 111 will be able to provide certification (over phone).
- Small employers (fewer than 250 employees) will get an SSP rebate for up to 14 days per employee who claims.
UK's new immigration system from 1 January 2021
Details of how the new immigration system will operate from 1 January 2021 have been published by the Home Office in a Policy Statement. In our article here, Alexandra MacMahon looks at how EU nationals relocating to the UK from 1 January 2021 will be subject to the new system on the same footing as non-EU nationals.