Key employment law changes in 2021

Beverley Sunderland explores some forthcoming legal developments that HR professionals need to be aware of, including IR35, discrimination and extra leave for unpaid carers

2020 has seen us grappling with the coronavirus job retention scheme (CJRS), the CJRS bonus that is no more, the job support scheme that came and went, and the changes to claiming statutory sick pay. Not to mention the practical problems of having many workforces working from home. However, it is important to have one eye on what is on the horizon in terms of legislation, to enable HR to advise their businesses and plan for any incoming changes.


Changes to the off-payroll tax legislation, IR35, which was due to be implemented in April 2020, have been deferred to 6 April 2021. This means HR should identify any self-employed consultants in their workforce who offer their services through a limited company (personal service company). They should use the government online tools to ascertain if there will be an obligation on the company to deduct income tax and national insurance contributions at source when paying the contractor. HR will also need to make clear in all consultant contracts whether they fall inside or outside IR35. The changes will only affect medium to large companies.

Positive discrimination

It is important that HR reminds boards of the difference between positive discrimination and positive action when asked to ‘improve diversity’. Positive action includes expressly saying that applicants are welcome from under-represented groups such as women or those from minority ethnic groups. It includes advertising roles in places where those who are under-represented are likely to see them. But appointing someone into a role just because they have a protected characteristic is positive discrimination. The only time a candidate’s protected characteristic should be considered is in a ‘tie break’ situation when there is no other way of separating two candidates.

New legislation

In December 2019 the Queen’s speech heralded a number of proposed pieces of legislation. Some of these may have been overtaken by the events of the last nine months, but the key ones for HR are: 

  • Extension to redundancy protections to prevent pregnancy/maternity discrimination
    There is a popular myth that you cannot make those on maternity leave redundant. This is not correct. While you must not make them redundant because they are on maternity leave, you must treat all employees fairly and equally, which means including those on maternity leave in a pool with colleagues. However, if they are selected for redundancy while on maternity leave then a woman has enhanced rights to be placed into a vacant role for which they have the skills without competitive interview. The government intends to extend that protection for six months after the woman returns from maternity leave.
  • Introducing an entitlement to one week’s leave for unpaid carers
    In March 2020, the government issued a consultation paper and asked for responses by 3 August 2020. In this paper they proposed allowing unpaid carers to have an additional one week unpaid leave a year. The response to this consultation has not yet been published.
  • Allowing parents to take extended leave for neonatal care
    Following consultation in 2019, the government published a response in March 2020 confirming that parents of babies that are admitted into hospital as a neonate (28 days old or fewer) will be eligible for neonatal leave and pay if the admission lasts for a continuous period of seven days or more. They will be entitled to this from day one of their employment and up to a maximum of 12 weeks. There have been no further details published, including the level of the neonatal pay.
  • Making flexible working the default unless employers have a good reason not to
    This proposal, introduced in 2019 under the flexible working bill by Conservative MP Helen Whately, failed to complete its passage through parliament by the end of the session, which means it will not progress. However, although the Queen announced that legislation would be implemented to give effect to this, it is likely to have been overtaken by the events in recent months. All employers have been forced to look at whether their employees can work from home, with some having to juggle childcare as well as do their jobs, and a lot of myths and preconceived ideas have been firmly put to rest. 
  • A new, single enforcement body for employment rights
    Consultation closed in October 2019 and as yet no further details have been published, but the intention is to have one body enforcing minimum wage, unpaid tribunal awards and the tribunal penalty scheme, regulating statutory sick pay and publicising employment rights. 
  • Passing legislation to ensure tips left for workers go to them in full
    Specially referred to in the Queen’s speech, this would implement the Employment (Allocation of Tips) Bill.
  • A new right for all workers to request a more ‘predictable’ contract
    No details have yet been published, but this is to address the perceived imbalance of zero-hours contracts.

2021 looks set to be another busy year for HR but, having grappled with the many unforeseen challenges the pandemic brought upon us, we should all be able to take any employment law changes next year in our stride.

Beverley Sunderland is managing director at Crossland Employment Solicitors