Sintons Employment Law E-Bulletin – Issue 74
- New shielding guidance to those categorised as extremely clinically vulnerable
- Increase in rates of pay from 1 April
- IR35 changes from 6 April 2021
- Post-Employment Notice Pay- new formula from 6 April
- Royal Mencap Society v Tomlinson-Blake; Shannon v Rampersad and another (t/a Clifton House Residential Home)  UKSC 8 – carers are not entitled to minimum wage while they sleep at their workplace
- Update to Vento bands
New shielding guidance to those categorised as extremely clinically vulnerable
Public Health England has issued new guidance to those categorised as extremely clinically vulnerable. As of 1 April 2021, they are no longer advised to shield and are no longer eligible for Statuary Sick Pay or similar benefits automatically as a result of being advised to shield.
Although clinically extremely vulnerable people will no longer be advised to shield, they are still advised to take extra precautions. The guidance states that people are still advised to continue working from home where possible, but if people are unable to do so, employers are required by law to take steps to make workplaces COVID-19 secure and should discuss this with their employees.
The guidance can be found here.
Increase in rates of pay from 1 April
From 1 April 2021, the National Living Wage (“NLW”) increased 2.2%, from £8.72 to £8.91 an hour. This year, the Chancellor, Rishi Sunak, announced that the NLW will be extended to 23 and 24-year-olds, representing a substantial pay rise of almost 9%.
The National Minimum Wage (“NMW”) rates for those under 25 will also increase as follows:
- 21-22 Year Old Rate: £8.20 to £8.36
- 18-20 Year Old Rate: £6.45 to £6.56
- 16-17 Year Old Rate: £4.55 to £4.62
- Apprentice Rate: £4.15 to £4.30
- Accommodation Offset: £8.20 to £8.36
It is important to remember that apprentices aged 19 or over, who have completed their first year, must be paid at least the NMW rate for their age.
From 4 April 2021, the weekly rates of statutory family leave (Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay and Statutory Parental Bereavement Pay) increased from £151.20 to £151.97, or 90% of an employee’s average weekly earnings, whichever is lower.
The Statutory Sick Pay (“SSP”) rate also increased from 6 April 2021 to £96.35 per week. The government’s SSP calculator will help you to work out how much SSP employees are entitled to.
All of these statutory pay changes will need to be reflected in employers’ payroll, as well as any information regarding the expenses and benefits provided to employees.
IR35 changes from 6 April
The changes to the off-payroll rules were due to come into effect on 6 April 2020. This was delayed last year until April 2021 because of the coronavirus pandemic.
As of 6 April 2021, medium and large companies in the private sector that contract with personal service companies (“PSC”) for the provision of worker’s services will now have to account for tax and national insurance through PAYE in the same way as the public sector has been required to do since April 2017 (off-payroll working rates). The private sector end clients will be responsible for determining the tax status of contractors who work through PSCs and whether they are therefore caught by the IR35 rules.
The IR35 rules will apply where there would have been an employment relationship between the engaging business and the individual if the individual had engaged directly with the business rather than through the PSC.
Despite this, and in anticipation of these changes, it is still essential that medium and large businesses carry out an assessment to determine whether the new rules under IR35 apply to their independent contractors and review their contracts and pay arrangements. Small businesses will not be caught by the changes.
Post-Employment Notice Pay – new formula from 6 April
The government has introduced an alternative Post-Employment Notice Pay (“PENP”) calculation to use where an employee’s pay period is defined in months, but their contractual notice period or post-employment notice period is expressed in weeks. It is stated that the measures are aimed at removing unintended outcomes and to bring fairness and clarity to the legislation on termination payments.
The new formula provides that, instead of using the number of days in the pay period, 30.42 can be used as “P” in the PENP calculation, as it is the mean average number of days in a month. This measure ensures that PENP does not vary according to the number of days in the monthly pay period preceding the trigger date where the remuneration for that period would not have varied.
The measure also aligns the tax treatment of PENP for individuals who are non-resident in the year of termination of their UK employment with the treatment of all UK residents. Currently PENP is not chargeable to UK tax if an employee is non-resident for the tax year in which their employment terminates.
The changes took effect from 6 April 2021 and apply to those individuals who have their employment terminated, and where the termination payment is received, on or after 6 April 2021.
Royal Mencap Society v Tomlinson-Blake; Shannon v Rampersad and another (t/a Clifton House Residential Home)  UKSC 8 – carers are not entitled to minimum wage while they sleep at their workplace
The Supreme Court has ruled in this case that carers are not entitled to be paid the national minimum wage when they are on sleep-in shifts. This does not mean people on ‘sleep-in’ shifts aren’t ‘working’; but they’re not ‘working’ for the purpose of the national minimum wage rules unless they’re both awake and doing work for their employer.
Claire Tomlinson-Blake, a Mencap support worker in the East Riding of Yorkshire, appealed against a Court of Appeal ruling that carers are only entitled to the national minimum wage when they are required to be awake for work – and not while asleep. She challenged the decision in the Supreme Court alongside a linked appeal brought by John Shannon, a Surrey care home worker.
The Supreme Court dismissed both appeals. In the judgment, Lady Arden said that “sleep-in workers… are not doing time work for the purposes of the national minimum wage if they are not awake”. She added: “The sleep-in worker who is merely present is treated as not working for the purpose of calculating the hours which are to be taken into account for national minimum wage purposes and the fact that he was required to be present during specified hours was insufficient to lead to the conclusion that he was working.”
The decision has received conflicting reactions. It has provided some welcome clarity following years of inconsistent authorities on the issue and will be a relief for care providers concerned about potential claims up to an estimated £400m in backpay. However, care workers are calling for changes in how workers are remunerated so this is unlikely to be the last we hear on this matter.
Update to Vento bands
The rates for injury to feelings awards in discrimination cases increased from 6 April 2021 as follows:
- lower band £900 – £9,100 (for “less serious cases”);
- middle band £9,100 – £27,400 (for “serious cases which do not merit an award in the highest band”); and
- upper band £27,400 – £45,600 (for “the most serious cases”).
Only in “the most exceptional case” would an award exceed the top band.
These will apply to claims presented on or after 6 April 2021.