Changes in employment law and Brexit

Brexit has dominated the agenda and so, when it comes to introducing new employment law, April 2019 is unusually quiet compared to previous years.

However, as Gillian Reid, employment law expert with Ware & Kay in York & Wetherby explains, the government has found time for a few changes. Gill also outlines the anticipated effect of Brexit on UK employment law and the implications for EU workers in the UK.

April 2019 changes

Employers need to be ready for changes which are expected to come into effect from the following dates:

1 April 2019

• increase in the national living wage for workers aged 25 and over from £7.83 to £8.21 per hour;
• increase in the national minimum wage for workers aged at least 21 but under 25 from £7.38 to £7.70 per hour;
• increase in the national minimum wage for workers aged 18 but under 21 from £5.90 to £6.15 per hour;
• increase in the national minimum wage for workers aged 16 or 17 from £4.20 to £4.35 per hour;
• increase in the apprentice rate from £3.70 to £3.90 per hour; and
• increase in the accommodation offset from £7.00 to £7.55 per day.

6 April 2019

• workers, and not just employees will have the right to an itemised pay statement – this applies to contractors and freelancers who are not in business on their own account;
• if a worker’s pay varies according to the amount of hours they work, you will have to include the total number of hours for which they get variable pay on the pay statement;
• statutory sick pay increases from £92.05 to £94.25; and
• there is an increase from £5,000 to £20,000 for the maximum penalty that an employment tribunal can order for an aggravated breach of a worker’s rights.

7 April 2019:

• increase in the rate of statutory maternity, paternity, adoption and shared parental pay from £145.18 to £148.68 per week.

It was expected that changes would be introduced in April to the tax treatment of payments of over £30,000 made under a settlement agreement. However, their introduction has been delayed until April 2020.

What effect will Brexit have on employment law?

Many significant areas of employment law are based on EU law, such as working time rights and employee rights on the transfer of a business. After the UK leaves the EU, with or without a deal, EU employment law will be converted into UK law. Depending on the terms of any deal reached with the EU, workers’ rights under EU law should continue to apply during any transition period.

The government has announced its commitment to maintaining workers’ rights beyond the end of the transition period. According to an announcement in March 2019, this means that whenever Parliament considers a new law which could affect pre-Brexit employment rights, the government will have to make a statement on whether the new law honours this commitment. Parliament will also be given the opportunity to vote on whether any new EU employment law should be introduced in the UK.

If the UK leaves without a deal, the government may introduce legislation to change these rights without having to keep to the minimum standards set under EU law, for example limits on working time and agency workers’ rights. While the government may no longer be legally restricted from making changes, political considerations will come into play when thinking of rowing back on long-established workers’ rights.

What effect will Brexit have on EU workers?

The fate of EU workers in the UK depends on whether a deal is reached or not. If the UK’s agreement with the EU on citizens’ rights is put in place, there will be a transition period until 31 December 2020. Until that date, EU citizens in the UK will be able to apply under the settlement scheme for the right to stay indefinitely if they have five years’ residency here. More recent arrivals who have not been resident for five years by 31 December 2020, will be able to apply for pre-settled status to enable them to accrue the five years’ residency.

If there is a no-deal Brexit, only those EU citizens who are already resident in the UK on the date of leaving would be able to apply for settled status. It is expected that a new immigration system would come into force on 1 January 2021. Until then, EU citizens wishing to stay longer than three months in the UK will need to apply for European temporary leave to remain.

Employers of EU workers should continue to support them in making applications under the settlement scheme. Those employers who rely on EU workers should identify areas of the business that are particularly at risk if there are fewer EU workers coming to the UK and look into ways of mitigating the risks.

For help with the implications of Brexit on your workforce and for advice on complying with April’s new rules, including identifying anyone in your workforce to whom the new rules will apply, please contact Gillian Reid on 01904 716000 or 01937 583210 or email Gillian.Reid@warekay.co.uk.