Employment Law: What to Expect in 2021

January 26, 2021


With many changes in employment law being put on hold due to the COVID-19 pandemic, it is important that employers are aware of some of the changes that may still come into force this year. Here are 6 things to look out for in 2021:

1. Employment Bill 2019-20

In December 2019, the Government announced that it would introduce a new Employment Bill to cover a range of topics such as passing all tips and service charges to workers and establishing a single enforcement body for the labour market. However, due to COVID-19, these developments have been delayed and the Bill has not yet been brought forward.

2. Off-Payroll Working Rules

In order to address a lack of compliance with IR35 in the private sector, the Government confirmed in 2018 that the off-payroll working rules would be extended to the private sector from 6 April 2020. However due to COVID-19, this was postponed to 6 April 2021.

Effectively, the changes mean that businesses will need to be careful as to how they engage contractors, as they could be liable for taxes and penalties by wrongly classing a contractor as self-employed.

3. Exclusivity Clause Ban

In December 2020 a consultation was opened on measures to extend the ban on exclusivity clauses in employment contracts to cover those earning below the Lower Earnings Limit, which is currently £120 per week. This would prevent employers from being able to restrict low-earning employees from working for other employers. A similar exclusivity clause ban exists in relation to workers on zero-hour contracts.

The consultation is to close on 26 February 2021.

4. Brexit

The transition period for leaving the EU has now come to an end, and the UK is now no longer part of the EU. A trade deal between the UK and the EU was agreed before Christmas so the effects of that are beginning to be seen. All EU-derived laws that were in place in the UK until the end of the transition period are still applicable to the UK for the time being; however, the UK now has more freedom to change those laws and to depart from court decisions made under European case law.

A significant amount of UK employment law is derived from the EU so there has been speculation as to what changes could be made to these laws. Click here for more information.

5. Non-Disclosure Agreements

In July 2019, the Government published its proposals to prevent the misuse of confidentiality clauses or non-disclosure agreements in settlement of workplace harassment or discrimination complaints. The Government reiterated that confidentiality clauses can serve legitimate purposes in employment contracts and settlement agreements, but there is also scope for them to be misused. The proposals aim to prevent employees from being “gagged” from speaking out about issues such as sexual harassment.

We are likely to see these proposals being brought to Parliament in 2021.

6. Extending Redundancy Protection for New Mothers

In July 2020, the Pregnancy and Maternity (Redundancy Protection) Bill 2019-21 was reintroduced by Parliament. Its second reading is due to take place in March 2021. If the bill is passed then it will prohibit redundancy during pregnancy and maternity leave and also for six months from the end of the pregnancy or maternity leave, except in specific circumstances.



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