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SPONSORED: Virus impact will create new staff issues for firms in 2021

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Fiona Herrell, a partner in employment at Brodies LLP, explains how Covid-19 could cause people issues for businesses in the coming year.

Most businesses have spent the majority of 2020 operating in crisis management mode. They have had to deal with a host of challenges raised by the COVID-19 pandemic including, in many cases, making difficult decisions to protect their future.

As we approach the end of the year, what are the key HR and employment law issues businesses should anticipate having to deal with in 2021?

Covid-19 will, undoubtedly, continue to dominate the agenda. Current working arrangements and practices are taking their toll and while the Christmas break will be welcomed, it will not undo the impact that working through a global pandemic has had on employees.

Ensuring colleague health and wellbeing, both physical and mental, will be a continuing priority into 2021.

The approval of a vaccine and the speed at which it is being made available in the UK has boosted the spirits of many. For employers, it gives hope that more staff will be able to return to the workplace.

However, it has also raised difficult legal and ethical questions. For example, can an employer compel its workforce to be vaccinated? Do they have a duty to offer the vaccine for health and safety reasons? What measures can be taken if employees who are offered the vaccine refuse to have it?

Once more workers can safely return to the workplace, it is likely there will be an influx of flexible working arrangements as employees look to make current working practices, or aspects of them, permanent.

Businesses, and HR teams in particular, will need to be ready for this, including being clear in advance about how multiple and competing requests will be dealt with. They must also be alive to the fact that it may be more difficult to refuse a request to formalise current temporary arrangements if there have been no concerns about performance or productivity during the period in question.

Some 9.6 million people have been furloughed under the Coronavirus Job Retention Scheme.

It was due to end in October and has now been extended again until the end of April 2021.  Any support that will be available thereafter will be announced at the Budget on 3 March 2021.

Either way, all businesses will continue to closely analyse current and anticipated work levels and overall financial performance against resourcing levels. We will inevitably see further restructuring and redundancy exercises being undertaken, as well as transfers of employees as part of transactional activity driven by consolidation.

Following the UK’s exit from the EU, a new single points-based UK immigration system is now in operation. From 1 January 2021, the new rules will apply to all EEA and Swiss nationals (those who qualify under the EU Settlement Scheme will not need to apply). It is already operational in respect of non-EEA nationals.

The new rules will likely result in recruitment processes requiring additional planning and increased budgets where the individuals being recruited are not British or Irish, and have to be sponsored. Employers in certain sectors, including those in oil and gas, will also need to familiarise themselves with new rules for individuals who are employed or self-employed in the UK, but live elsewhere.

Gender pay gap reporting obligations were suspended for 2019-2020 due to the pandemic.

As things stand, that reprieve does not look likely to extend to  2020-2021. Employers who had 250 or more employees on 5 April 2020 will, therefore, need to undertake this exercise ahead of April 2021, and those who had accessed the furlough scheme and/or implemented reductions in pay by the snapshot date will need to carefully consider how impacted employees should be treated for the various calculations undertaken. More generally, equality, diversity and inclusion will all continue to feature on the agendas of many businesses.

April 2021 will also see the reform of the off-payroll working rules. Currently in the private sector, it is the role of the personal service company to determine whether an individual worker falls in, or outwith, IR35 and to pay any increased tax.

From April 2021, that obligation will sit with the business that engages the contractor and the tax will need to be paid by the ‘fee payer’. This means that the compliance burden will shift to the business that engages the contractor, and will likely increase cost.

Many businesses will be advanced in their preparations for these changes given they were due to come into force in April 2020. Businesses that are less prepared would be wise to start now.

Finally, many businesses will take this opportunity to reflect on how and where they ask their staff to work and to consider whether, in light of what we have learned and experienced during 2020, this should be modified.

Not all businesses will opt for radical change, but even minor modifications may necessitate new or revised contracts of employment/engagement and possibly adjusted remuneration practices and structures.