What changes are expected in Employment law in 2021?

So we’ve finally seen the back of 2020, one of the most challenging years in living memory. So looking forwards, what are the changes to UK Employment Law changes in 2021?

CJRS and furlough

One of the key developments in 2020 has been the unprecedented level of Government support for jobs. The furlough scheme has already been extended until April. A scheduled review of the scheme in January is unlikely to yield any significant changes whilst most of the UK is under tier 4 restrictions (or national equivalent for Wales, Northern Ireland and Scotland). When will the scheme end? That is likely to be impacted by the speed of the vaccine rollouts. If the Government achieves its aim of 2 million vaccinations a week, then expect to see restrictions lifting in the Spring.


IR35 extends into the private sector from April. The regulations themselves have been there for decades but the onus moves to medium and large employers to assess whether a worker is self employed for tax purposes. Small businesses remain unaffected by this change. So what is a small business? 

The legislation defines a medium sized business if it meets 2 of the following criteria:

  • 50 employees
  • £10.2 million annual turnover
  • £5.1 million balance sheet

So if you do not meet these criteria, the Personal Services Company remains liable for deciding whether they are self employed for tax purposes. Click here to read more about IR35.

Immigration status

The UK left the EU on 31st January 2020 and entered an 11 month transitionary arrangement which itself ended on 31st December 2020. One of the key changes from an employment law perspective is the end to the freedom of movement. So if an EU national wishes to remain in the UK, they have to apply for settled status by 30th June 2021.

Changes have also been made to the Visa system with the tier 2 general worker category replaced by a Skilled worker visa. To be eligible, the worker must be sponsored (i.e. have a job offer) and be earning at least £25,600 per annum OR the ‘going wage’ for the role. Click here for more information on the scheme.

Employment law in 2021 - potential legislation

With 2020 being dominated by the Covid crisis and Brexit, there was unsurprisingly little time to pass other legislation. The following have been proposed but no implementation date has been provided:

Changes to protection of employees at risk of redundancy

  • An employee at risk of redundancy while on maternity, adoption, or shared parental leave has the right to be offered any suitable alternative vacancy that is available. The government is proposing to extend this protection to:

    • pregnant employees, once they have told their employer of their pregnancy
    • employees returning from maternity or adoption leave within the previous six months
    • parents returning from shared parental leave (although how the limits on this right will operate is still to be worked out).

    The proposals are in response to a consultation earlier in the year on pregnancy and maternity discrimination. The government has said that legislation will be brought forward when Parliamentary time allows.

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