Employment Law Developments in NI From April 2021Posted in : Supplementary Articles NI on 5 May 2021
In this Podcast Mark McAllister, Director of Director of Employment Relations Services with the LRA discusses the key employment law developments in NI from April 2021 and outlines what to look out for this coming year.
Hello, and welcome to this Legal Island podcast on employment law reforms in Northern Ireland in April 2021. My name is Mark McAllister, and I'm Director of Employment Relations Services here at the Labour Relations Agency.
So for all of you who work in the world of employment rights and employment relations, you'll be aware that April is a very important month in the employment law calendar, not the least because many financial limits and caps tend to increase every year in April. So it's pretty predictable in terms of being the old perennials. The usual suspects, of course, are things like national minimum wage, statutory payments related to the broader banner of social security, such as statutory maternity pay and statutory sick pay, but also caps and compensation for things like unfair dismissal and statutory redundancy pay.
Annual Rate Increases
So April is an important month for all of us to update and refresh your in-house material on what some people will call cap and limit increases. Be aware that not all of the reforms come into effect in April of this year, for example, national minimum wage. So it's normally stretched across the first week in April, in every year, and it can be reformed within different areas that are age applicability, for national minimum wage, and reforms like that, which have changed. So be aware of those. We'll walk our way through them as we go through the podcast. Also, be aware of some of the nuances behind some of the less well-known areas, such as agricultural minimum wage rates and the current controversies surrounding the proposal to abolish the Northern Ireland Agricultural Wages Board, which has seen, for example, bit of trade union movement as the last bastion of collective bargaining in Northern Ireland. It's already abolished in GB but not yet in Northern Ireland, but that looks to be pending. So watch this space.
Be Aware of GB/NI Differences
Also, be aware of nuances around the fact that, in Northern Ireland and Great Britain, calculation methodologies are not the same, resulting in some core differences such as things like calculation for the cap on a week's pay. For example, in Northern Ireland, it's now £566, but in GB, it's £544. So be careful just in case you get into a habit of cutting and pasting from GB reforms in Northern Ireland. There are noticeable differences. The Labour Relations Agency works closely with HRMC to assist in getting Northern Ireland specific dedicated phone line up and running to address specific national minimum wage inquiries, and we hope to have that up and running by early summer. So without further ado, let's look at some of the financials that always happen in and around the first week in April, that's national minimum wage, agricultural worker's rates, limits, and caps.
Increases in the NMW
In terms of the national minimum wage, prior to April 2021, it was people aged 25 and over who are entitled to receive the national minimum wage. But from the 1st of April 2021, this applies to those who are aged 23 and over. That's 23. So now, the national living wage for a 23-year-old and over currently sits at £8.91. The national minimum wage rate for 21 to 22-year-olds now sits at £8.36. The national minimum wage for 18 to 20-year-olds sits at £6.56. The national minimum wage for 16 to 17-year-olds sits at £4.62. The apprenticeship rate for the national minimum wage is now £4.30. And the accommodation offset per day sits at £8.36. So they are the new rates that come into effect on the 1st of April 2021, and that's across the UK as a whole, commend on the very first day of April. So be aware of that.
Agricultural worker's, slightly different. In Northern Ireland, they're entitled to the agricultural minimum wage rates rather than the national minimum wage or living wage. No worker can be paid less than the national minimum wage or the national living wage, but some agricultural workers must be paid more than this because they're in a higher rate. So from 1st of April 2021, the Agricultural Wages Board minimum rates are as follows: grade 1 now sits at £6.95, grade 2 sits at £7.49, grade 3 sits at £8.91, grade 4, which is craft grade, sits at £9.58 per hour, grade 5, which is a supervisory grade, sits at £10.09, and grade 6, farm management grade, sits at £10.95.
Now, as I said earlier on, you need to be very aware of this because there is a plan to abolish the Agricultural Wages Board in Northern Ireland to follow what happened in GB. And that's not without its controversy. So come this time in 2022, we may not have a nationally agreed rate for agricultural workers any longer, so just keep an eye. We'll bring you up to date with those.
Increases in Statutory Payments
Other changes that have occurred during April are the changes to what are referred to as caps and limits. So these will be familiar to most practitioners in terms of things like statutory family leave payment. So from the 4th of April 2021, the rate of statutory maternity pay, paternity pay, adoption pay, and shared parental leave pay is now £151.97 per week, with a minimum earnings threshold of £120 per week, and that's important. Now, in GB, that same rate, that £151.97 also relates to parental bereavement pay, but that's not yet in effect in Northern Ireland, and I'll come back to that before the end of this podcast. Other important changes in regard to limits and caps is, obviously, things like statutory sick pay, and from the 6 of April, the rate of statutory sick pay increased to £96.35, again, with a minimum earnings threshold of £120 per week.
Increases in Compensation for Unfair Dismissal
Other important reforms that come into effect on the 6 of April were the financial award compensation for unfair dismissal. It increased, on the 6 of April, to £89,669. And in terms of the calculation for a week's pay, the maximum amount of week's pay for calculated statutory redundancy payments and various other awards, and including the basic award for unfair dismissal, increases to £566 per week. Okay. And again, be aware of the difference in GB, different methodologies for calculation meaning that GB, it's £544 per week. So just be aware of some of those key changes.
Other changes that came into effect on a UK-wide basis relate to IR35. Now, I know Seamus McGranaghan, in various other podcasts, has talked at length about IR35, and that's an important piece of tax legislation that cuts across employment law, and especially in and around misclassification of gig workers and the Uber decision and all of the other decisions that spin out from it. So what I would say in basic summary terms is the reforms to the IR35 rules on off-payroll working on the private sector come into force on the 6 of April, and again, the rules are aimed at reducing tax avoidance for contractors employed via personal service companies or PSCs. The responsibility for assessing whether the IR35 rules apply to contractors moves away from the contractor and instead to the engaging business who must issue an employment status determination, and these are not without their controversies.
So from the 6 of April 2021, all public sector clients or medium or large size private sector clients will be responsible for determining a worker's employment status. This includes some charities and third sector organisations. If the off-payroll working rules does apply, the worker's fees will be subject to tax and national insurance contributions. So as I said, that's not without its controversies because, obviously, there will be people who are genuine freelance and they are very happy with their contractor status, and there are other people who will not be happy with their contractor status, and therefore, a decision has to be made with regard to their employment status. So it's a really significant reform. Ostensibly, it looks at tax law, but it relates very much to the whole notion of this disguised employment and gig workers and whether someone is genuinely an independent contractor in terms of self-employment. And this has to be examined because it has been a hot topic on employment law for the last five, six years, and will continue to be now that we're living in a post-Uber decision environment. So as I said, Seamus McGranaghan, in previous Legal Island podcasts and webinars, has talked about IR35. So well worth a listen to those.
Amendments to Health and Safety Legislation – Protection for Workers
Other changes that are just afoot within the coming weeks that you should be aware of, changes on the 31st of May, we're going to have changes in relation to our health and safety-related legislation, which is enshrined within our Employment Rights Order. So on the 31st of May, the Employment Rights Northern Ireland Order 1996, protection from detriment in health and safety cases, amendment order Northern Ireland 2021, quite a mouthful, comes into effect, and this gives effect to the judicial review taken by the Independent Workers' Union of Great Britain to effectively give legal effect to workers being entitled to be protected from detriment in health and safety-related cases and have access and be protected under the various health and safety legislation related to things like PPE, again, not without their controversies in the context of coronavirus. So this is an important reform which will come into effect within the next five weeks in Northern Ireland and will extend the detriment rights to workers rather than simply employees.
The Employee Rights can be found under Article 68D of the 1996 Order, and these are the areas of law that came up and were put into sharp relief in the context of the COVID crisis, because when people go and be asked to return to work, there were issues with regard to quality of PPE, or the lack of social distancing, or there were insufficient hand sanitising provisions, and then the question mark arose whether or not these constituted a serious and imminent danger under the health and safety-related detriment rights and legislation. So it's still a very contemporary theme. As we see COVID restrictions starting to be relaxed and people now returning to work and organisations getting their houses in order, certainly in the public sector, with regard to people returning to work, obviously, there may still be fears in relation to the safety of work environments. So employers need to be very, very well versed in Article 68D in terms of if they do have genuine concerns which are fact-specific regarding whether or not the working environment represents a serious and imminent threat or danger to them. So that's still a very, very contemporary theme even though we're slowly but surely working our way out of lockdown.
Introduction of Parental Bereavement Leave
And another important change that may happen in the early summer, and they put the word "may" in inverted commas, there's a possibility that the reform for law in Northern Ireland parental bereavement leave will commend in June of this year, and it looks to be a mere reflection of what's happening in GB. We don't know any more details at this stage, but it's important to note that that might be around the corner for you. So reforms in terms of health and safety, and employment rights, and parental bereavement leave look likely to happen in May and June.
Over and above that, there are no plans to have any significant employment law developments in Northern Ireland over the summer. So when we get word of developments that are going to occur, we'll let you know. So as soon as we know, you'll know. But for me, Mark McAllister, Director of Employment Relations Services here at the Labour Relations Agency, and on behalf of Legal Island, thanks very much for listening, and speak to you soon.
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