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Employment law look ahead for 2021

08 January 2021 #Employment #Brexit

The coronavirus pandemic resulted in the postponement of many employment law changes due to take place in 2020. This article investigates some of the key developments anticipated over the next 12 months.


The Trade and Cooperation Agreement struck between the EU and UK on 24 December 2020 includes a commitment that the UK must not reduce or weaken employment rights in place as at 31 December 2020.

This restricts the UK from making major changes to employment law but will not prohibit changes entirely; the “weakening of” rights is only prohibited in circumstances which will impact trade or investment.

However, this commitment extends to fundamental rights including those relating to working time and working conditions, health and safety, information and consultation rights, restructurings, and transfers of undertakings. There are also separate commitments relating to the road transport sector in respect of working time and rest breaks.

The EU also retains a power to take “appropriate rebalancing measures” in the event the UK is found to have weakened rights that materially impact trade or investment.

Due to these commitments, we anticipate that significant changes to employment law are unlikely following Brexit.

Significantly, the Employment Tribunal  will no longer be bound by European Court of Justice decisions from 1 January 2021.  There is currently little guidance on disregarding decisions, so we expect tribunals to adopt a cautious approach before doing so in the short term.  

Coronavirus Job Retention Scheme (Furlough)

It was announced in December that the furlough scheme was being extended to the end of April 2021. With the recent national lockdown and the closure of schools, many employers may be looking to use the scheme to help parents and guardians who can no longer work effectively due to managing childcare in working hours.

It is important to note that employees eligible to be furloughed must have been on the employer’s payroll on 30 October 2020. RTI submissions notifying payment for such employees must have been made to HMRC on or before 30 October 2020 also. This means that the furlough scheme is unlikely to be available for new starters.

We will inform you if any further changes are made to the scheme including changes to eligibility requirements or if a further extension is announced.


Changes to the off-payroll tax legislation, IR35, were due to take effect on 6 April 2020. However, there were deferred by a year due to the pandemic.

The changes impact medium and large businesses in the private sector who engage self-employed contractors via an intermediary, often in the form of a personal service company (PSC).

As of 6 April 2021, the responsibility for accounting the income tax and NI payments of individuals offering their services through an intermediary, will shift to the party that pays for the individual’s services. 

In anticipation of these changes, it is essential that medium and large businesses carry out an assessment to identify any self-employed contractors in their workforce who are engaged via an intermediary and determine whether the IR35 rules apply.

The government’s online tool can assist in establishing whether a company is responsible for deducting income tax and national insurance contributions at source when paying the contractor under the new rules.

Finally, from 6 April 2021, all consultant contracts will have to make it clear whether the individual falls within the IR35 or not.

Get in touch with our team for specific IR35 advice.

Employment Bill

In December 2019, the Queen’s speech included references to a new Employment Bill, however, its introduction was likely delayed due to the pandemic. The publishing of the Bill is anticipated this year and it is expected to incorporate many of the measures identified in the Government’s Good Work Plan.

The Bill is likely to include the following:

  • Extended redundancy protection for new mothers

If a woman is selected for redundancy while on maternity leave, she has enhanced rights to be offered a relevant alternative vacancy without a competitive interview. The Government is expected to extend this protection for six months after a woman has returned from maternity leave, to tackle pregnancy and maternity discrimination relating to redundancy decisions in the workplace.

  • Unpaid carers leave

In March 2020, the government issued a consultation paper proposing to introduce a new right for unpaid carers to have an additional week of leave a year (unpaid). Consultation closed in August 2020 and the response has not yet been published but it is anticipated that the new right will be included in the Employment Bill.

  • New right to neonatal leave and pay

The Government’s response to a 2019 consultation confirmed its intention implement a new right for parents to take an additional week of leave for every week their baby is in neonatal care (up to a maximum of 12 weeks).  

The leave is said to be available to all employees, with no qualifying period of service necessary to be eligible.

However, to receive pay for the neonatal leave, it is expected that a qualifying period of 26 weeks’ service for those earning above the minimum pay threshold will apply.

There have been no further details published on the new right, including the level of the neonatal pay. It is anticipated that this right will be included in the Employment Bill.

  • A new single enforcement body for employment rights

A new body enforcing employment rights is anticipated, with its aim to ensure that workers are better informed of their rights whilst supporting business to ensure legislative compliance.

Enforcement powers are expected to include statutory sick pay, minimum wage, unpaid tribunal awards, and publicising employment rights. Further details are awaited but will likely be contained in the new Employment Bill.

  • A new right to request a more predictable and stable contract

With the aim of addressing the uncertainty of zero-hour and variable contracts, those engaged under such contracts are likely to be given a right to request a more ‘predictable’ contract after 26 weeks of service. This was the subject of a 2019 consultation of which the Government’s response is yet to be published.

The Employment (Allocation of Tips) Bill

It is anticipated that the above Bill will be enacted in 2021 making it a legal requirement that payment of all tips and service charges go to workers, ensuring fair distribution of sums under a new statutory Code of Practice.


Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

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Georgia  Roberts

Georgia Roberts
Senior Solicitor

T: 0118 960 4655
M: 07884 188 976


Employment team
+44 (0)118 958 5321