Employment law issues employers need to plan for this year | Fieldfisher
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Employment law issues employers need to plan for this year


United Kingdom

It's been said that 2020 was an unprecedented year but perhaps 2021 will be an even bigger test. Last year, businesses had to deal with the final countdown to Brexit, coupled with a pandemic that still continues to plague the world.
While, there are many balls that employers need to juggle this year that come under employment law, I want to touch on 8 key issues;
  • the importance of businesses planning for the furlough scheme and how it's been used,
  • corporate transactions,
  • employment litigation,
  • IR35,
  • Inclusion and diversity,
  • Brexit,
  • changes to working patterns, and
  • employee wellbeing.
Furlough scheme
Last year saw one of the biggest changes to UK employment and tax law in decades, with the introduction of the furlough scheme. The Coronavirus Job Retention Scheme was rolled out quickly, with employers encouraged to embrace the scheme in an 'act now, ask questions later' approach. Well, towards the end of last year we saw slightly aggressive behaviour from HMRC with the crackdown on 'furlough fraud'. Now, while employers are being encouraged to keep using the scheme, we know that uptake has steadily decreased over the months. However, employers that did use the furlough scheme at some point, need to ensure that the scheme was utilised correctly. This means 2021 is a year where employers should be self-auditing themselves to ensure compliance and correcting errors sooner rather than later.

Insolvency, mergers and acquisitions
Many businesses are having to make complex decisions about their future, whether it be that they go into administration, merge or get bought out by another company. On the other hand, some businesses have found that this situation has put them in a unique position to increase market share. With the current climate this type of activity is likely to increase and whenever there is a business change, people and their employment rights are impacted and thus need to be properly planned for.

Employment litigation
There is a known correlation between recessions, mass redundancies and increases in employment litigation. Last year, we saw the start of this and it will certainly increase this year. It's likely that most claims will be for unfair dismissal as things may not have been handled properly and with tribunals bearing no fee, former employees are more likely to take this route. Therefore, if your business is going through mass redundancies, you need to not only make sure that things have been handled according to the law but also factor in how much possible litigation could cost.

We've known about IR35 for a while, and thankfully it was extended by a year, but IR35 in the post-covid world is likely to be even more significant. Lots of employers may find that they are unable to offer long-term employment contracts and thus relying on contractors for flexibility around project needs is a better option. This approach will bring risks as businesses will need to have a process in place for contractors with visibility over their IR35 status.

Inclusion and diversity
Events of 2020 put inclusion and diversity back on the agenda particularly when it came to disparities between certain racial groups and opportunities in the workplace. There's also a lot of momentum to introduce mandatory ethnic pay gap reporting. These are all changes that should be embraced and celebrated by businesses. However, inclusion and diversity doesn't end at race, ethnicity and gender, so employers should really be trying to be ahead of this change.

The UK completed its transition out of the EU and left with a deal. Despite this, there are many questions in the air for employers when it comes to employment law rights that were enshrined in EU law, the new immigration system and how employers can get the right skilled workers and also business travel. These issues may not seem that important now but business will go back to some normality and employers need to understand exactly how Brexit impacts employment law. 

Remote working
With people working remotely, employers may find that there are lots of positives such as, sustained or increased productivity, adaption to technology and cost-savings. These advantages have led many businesses to consider reducing office space but, there may be some long-term downsides that employers have not yet considered.

Perhaps, home-working has worked so well because the office existed first. For many employees, working relationships had already been established, as well as knowledge of the company and the job role. It's likely that employers embarking on permanent remote working are likely to see issues when it comes to onboarding new employees, dealing with exits and proper handing over of work and confidential information. Furthermore, there are an array of cyber and data protection issues that are likely to surface with permanent homeworking. Also, managing employees, ensuring they are happy and feel supported in their role and career progression will be tricky to manage with a remote workforce, particularly for junior staff. This year it will be important for employers to plan how to manage requests for permanent remote working, in line with business short-term and long-term needs.

Monitoring of employee wellbeing
Widespread remote working has presented employers, particularly HR teams with a dilemma of how to monitor employee wellbeing and also a conundrum of what exactly their role and responsibility is when issues arise. To address this some employees are looking at how technology, such as devices or apps, can be utilised to monitor for signs of poor mental health and provide solutions. While, it's laudable that employers are taking steps to address these concerns, this data does count as special category data so has stringent rules for how it is processed and used and also could bring about culpability issues. This does not mean that employers should not be looking at different ways to monitor wellbeing but that it has to be rolled out in the right way with legal advice from an employment law and data privacy laws.

A shortened version of this article was published by Employee Benefits