17 Dec 2020
“There will no doubt be a collective sigh of relief as 2020 comes to an end from businesses who have survived the coronavirus pandemic this far. It has been a gruelling and painful year for employers and employees alike, with over a million businesses having to furlough nearly 10 million staff and hundreds of thousands of jobs either lost or at risk across a range of sectors.
“But for those businesses that have made it through this far, will the picture look any rosier in 2021? The positive news about the vaccine rollout certainly offers some hope for economic recovery but we know that this won’t happen overnight. For now, employers are having to ride the storm as best they can. We look back at some of the key moments of 2021 which have helped to make this year one of the most memorable of all our lifetimes, for all the wrong reasons.
On 23 March, Boris Johnson announced that the whole of the UK would be going into immediate lockdown, sending employers across the country into a mad frenzy. For those staff who could work from home, arrangements needed to be made urgently to get them all up and running with suitable technical equipment and risk assessments done to check they were able to work safely. Employees across the country came up with more and more inventive ways of creating home offices, with everything from ironing boards to drinks cabinets being used as desk space.
The Government announced details of a Coronavirus Job Retention Scheme – which would soon become known as furlough – a welcome lifeline for millions of businesses and employees.
There were some early employment law casualties of the pandemic with the announcement that implementation of IR35 would be postponed until April 2021 and that GPG reporting was suspended for the year.
Through the course of the year, three grants were also made available to those individuals who work for themselves but while this provided a lifeline for many, there was much criticism from those who were not eligible as they were either newly self-employed or operated as a limited company.
On 29 May, Chancellor Rishi Sunak announced a greater degree of flexibility in the furlough scheme, allowing employers to bring previously furloughed workers back to work part-time from 1 July. The plan was to decrease the Government contribution over time for the hours that the employee did not work, while the employer would continue to pay employer NICs and pension contributions as well as paying the remaining percentage of their wages not covered by the Government scheme.
As furlough started to wind down towards an end of October closure (or so we thought), many employers were left considering what their workforce would look like going forward and wondering whether redundancies would be the only option. Sadly, over the three months to October 2020, a total of 370,000 jobs were lost, bringing unemployment figures to a record 4.9%.
As lockdown eased, it was also a testing time for employers as stringent measures needed to be put in place in workplaces up and down the country to allow employees who were able to return to work, to do so safely. Many businesses faced issues with workers who were unable or reluctant to come back after months of working from home.
Through the year, many different announcements were made, including the introduction of a job retention bonus for employers able to keep jobs open for their staff, and the replacement of the Coronavirus Job Retention Scheme (CJRS) – the new Job Support Scheme. This new support programme was intended to support jobs where businesses could remain open but were facing lower demand over the winter because of the pandemic. It was extended several times within a matter of weeks to provide temporary support to businesses who were required to close their premises and to include a more generous Government contribution as well as a lower minimum worked hours requirement.
However, with COVID rates still rising rapidly and tighter restrictions repeatedly introduced across the UK, the Chancellor announced on 5 November that the CJRS would be extended to March 2021 and both the Job Retention Bonus and Job Support Scheme would both be put on hold for the time being.
While this was welcome news for millions of businesses and employees, many companies had already decided to cut jobs given the lasting damage inflicted during the first wave.
In early December, the vaccine approval news represented a shot in the arm for us all, raising hopes for some sort of return to normality at some point in 2021.
Indeed, there are already some positives for employees to look forward to as we welcome in a new year. The minimum wage – which has been rebranded as the National Living Wage – will increase by 2.2% – or 19p – to £8.91 an hour from April 2021, with the rate extended to those aged 23 and over. But while this is good news for workers who are struggling to make ends meet, this rising cost could have a further negative impact on many cash-strapped small businesses.
While we are all desperate for a brighter news year, we must be realistic. The UK’s unemployment rate is currently double what is was in February this year and is projected to surge to 2.6 million – or 7.6% – by the middle of 2021. The Chancellor said in this Spending Review at the end of November that the “economic emergency” caused by COVID-19 had only just begun. And with a rapid growth of infections as we head towards Christmas, restrictions on businesses look set to last well into the New Year. We are all expecting tougher controls in January and the outlook remains a little bleak.
We will wait with interest to see what – if any – economic support will be available to businesses and households after the furlough scheme ends in the Spring. With the added chaos of Brexit thrown into the mix, it looks likely that the turbulence that businesses have experienced in 2020 is set to continue into the year ahead, and with that will come a whole range of employment-related issues.
Daniel Wilde is head of employment law here at Harding Evans. We have recently introduced a fixed fee employment law support offer to help those employers in need of advice amid the ongoing pandemic. To find out more, email firstname.lastname@example.org, call 01633 760662 or visit www.hardingevans.com.