A new Government consultation on contractual exclusivity clauses, an upcoming National Minimum Wage increase, proposed increases to statutory pay, the latest employment tribunal statistics and an extension to the Furlough Scheme are all covered in this month’s Quick fire.
Government consultation: contractual exclusivity clauses
The Government has launched a new consultation on extending the ban on exclusivity clauses in employment contracts to cover those earning under the Lower Earnings Limit (currently £120 per week).
Exclusivity clauses, which prevent a worker from accepting work from another employer, have been banned in relation to zero-hours contracts since 2015.
The Government had decided at the time not to extend the ban to cover the contracts of other low paid workers but in light of the impact of COVID-19, particularly on low income workers, it is reconsidering this decision. The Government estimates that around 1.8 million workers receive a weekly wage below the Lower Earnings Limit. An extension of the ban would mean that such workers could seek additional work elsewhere if they are not given sufficient hours by their employer. The Government is proposing an hourly wage cap, above which the ban on exclusivity would not apply, to protect the interests of those businesses that employ well-paid individuals for only a few hours per week.
The consultation closes on 26 February 2021.
National Minimum Wage increases April 2021
The Government has confirmed increases to the national minimum wage in line with the recommendations of the Low Pay Commission. The National Living Wage, which currently applies to workers age 25 and over, will also be extended to workers of 23 and 24.
With effect from 6 April 2021, the rates will increase as follows:
Key Contacts
| Current Rate | Rate from 6 April 2020 | |
|---|---|---|
| Apprentice rate | £4.15 | £4.30 |
| Age 16-17 | £4.55 | £4.62 |
| Age 18-20 | £6.45 | £6.56 |
| Age 21-22 | £8.20 | £8.36 |
| Age 23 and over (National Living Wage) | £8.72 | £8.91 |
Proposed increases to statutory pay
The Government has announced proposed increases to various statutory payments, including statutory sick pay (SSP), statutory maternity pay (SMP) and other family leave entitlements.
Subject to final confirmation and with effect from April 2021 (date to be confirmed but likely to be 4 April 2021), the payments will increase as follows:
| Current rate | Rate from April 2021 | |
|---|---|---|
| Statutory sick pay | £95.85 | £96.35 |
| Statutory maternity pay, maternity allowance, statutory paternity pay, statutory shared parental leave pay and statutory adoption pay | £151.20 | £151.97 |
Employment tribunal statistics
The latest employment tribunal statistics have been published by the Ministry of Justice, for the period 1 July to 30 September 2020. It shows that the number of tribunal claims has risen to the highest level since 2013/2014 (prior to the introduction of tribunal fees). Single claim receipts rose by 13% (to 11,000) compared to the same quarter of 2019. Multiple claim receipts rose by 24% (to 19,000).
The sharp rise in new claims has exacerbated the existing backlog of cases in the employment tribunals, with a 22% increase in outstanding caseload and the average age at disposal now 39 weeks – an increase of five weeks compared to 2019. The number of claims disposed of is 39% down on the same period last year.
The increase in claims is most likely driven by the increase in unemployment resulting from the COVID-19 pandemic, which has put an increasing pressure on a tribunal system facing severe operational difficulties as a result of the national lockdown earlier this year and subsequent social distancing guidelines.
Extension to Furlough Scheme
On 17 December 2020, Chancellor Rishi Sunak announced a further extension to the Coronavirus Job Retention Scheme (CJRS), now to 30 April 2021. It had previously been expected to end on 31 March 2021.
The Government will continue to contribute up to 80% of wages, with the intention of giving businesses and employees “certainty into the New Year”. The level of contribution was originally due to be reviewed in January but will remain unchanged. Eligibility criteria for the CJRS will also stay the same (see our previous article for more details). Employers will continue to be required to pay National Insurance contributions and pension contributions for those hours when a furloughed employee is not working, in addition to those hours worked by the employee.
In addition to extending the furlough scheme, the Government’s current COVID-19 business loan schemes will also be extended to the end of March 2021.
These articles are from the December 2020 issue of Employment and Immigration Law Update, our monthly newsletter for HR professionals. To download the latest issue, please visit the newsletter section of our website. For further information please contact Liz Stevens or another member of Birketts’ Employment Law Team.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at December 2020.