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South East: Employment law changes from April 2021

By Jo Whittle
19 March 2021

Partner Sue Dowling, head of leading Thames Valley law firm Blandy & Blandy’s employment law team, summarises changes coming into effect from April 2021 that will affect both employers and employees.


As we have outlined in our recent blog article, ‘IR35 - are you ready for the changes on April 6, 2021?’, planned reforms involving the IR35 tax regime, affecting ‘medium and large’ private sector (end-user) clients, contractors and intermediaries, will take effect from April 6, 2021.

Under the reforms, liability for determining a contractors’ status as an employee or contractor (therefore ensuring that tax is being paid at the appropriate level) will pass from the contractor to the employer.

Employment tribunals

Compensation rates are set to change from April 6, 2021, increasing the maximum weekly pay in a redundancy situation to £544 (from £538). Statutory guarantee pay (SGP) will remain at £30.

The move will see maximum statutory redundancy pay fall in line with unfair dismissal basic award pay at £16,320.

Where a worker (claimant) is judged to have been unfairly dismissed (other than automatic unfair dismissal cases), they are entitled to a maximum of 52 weeks’ pay, subject to an overall cap. That capped allowance rises to £89,493. In a situation where the employer has failed to adhere to instructions from the employment tribunal, an additional award of up to £28,288 may be made, based on average weekly earnings.

Statutory sick pay

All eligible employees are entitled to receive statutory sick pay (SSP). From April 6, 2021, the rate will increase to £96.35 per week (from £95.85). For eligibility purposes, the lower earnings limit will remain unchanged at £120 per week.

Family leave

For statutory family leave, which encompasses Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP), Statutory Adoption Pay (SAP) and Shared Parental Pay (ShPP), the weekly rates will increase to £151.97 per week (from £151.20) on 4 April 2021.

National minimum wage and national living wage

From April 1, 2021, the national living wage is extended to those 23 and over (from those aged 25 and over). In addition the new hourly rates will be as follows:

Rate from April 2020 Rate from April 2021 Increase
National living wage (NLW)
for workers 23 and over
£8.20 - £8.72 £8.91 2.2% - 8.65%
21-22-year-old rate (NMW) £8.20 £8.36 2.0%
18-20-year-old rate (NMW) £6.45 £6.56 1.7%
16-17-year-old rate (NMW) £4.55 £4.62 1.5%
Apprentice rate £4.15 £4.30 3.6%
Accommodation offset £8.20 £8.36 2.0%


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