Employment Law - What to expect in 2023 | Global Workplace Insider

Last year saw little legislative changes in the UK with regard to employment law. However, there may be changes of interest for employment lawyers over the coming year. This blog post looks at what changes employers can expect in relation to employment law this year and what steps they should be taking to prepare for any such changes

Retained EU Law (Revocation and Reform) Bill 2022

In summary, the Bill makes provision to remove, from retained EU law, its special status and EU-derived features at the end of 31 December 2023. Essentially, as the Bill currently stands, large parts of retained EU law will be automatically revoked on 31 December 2023, (although this can be extended to 23 June 2026) unless ministers decide to preserve or replace them. The Bill also provides for certain changes to the UK law status of this retained law :The Bill amends section 5 of the European Union (Withdrawal) Act 2018 to end the principle of supremacy of EU law at the end of 2023. This means that there will be a new rule of priority under which domestic primary or secondary legislation will take priority over retained direct EU legislation in the event of a conflict between the two. UK courts will also have greater discretion to depart from retained case law.

This has the potential to have a significant impact on areas of employment law. This includes legislation concerning holiday and time off, employment rights on the transfer of a business, rights for fixed-term and part-time workers and rights relating to agency workers. One of the main areas of concern is the lack of certainty for employers: It is not clear whether these rights will be retained or whether the Government will take the opportunity to change certain workers’ rights, such as the ability to change terms and conditions after the transfer of an undertaking. We are monitoring the Bill’s passage through Parliament closely.

Private Members Bills

We hoped last year for the introduction of the Employment Bill which was first proposed in 2019. As we mentioned in our recent blog post (Employment law – Government backing of Private Members Bills) the Government has not introduced an Employment Bill and, as a result, there are a number of Private Members’ Bills which cover much of the same ground as the intended bill. The Government has announced its support for the Bills below and there is therefore an increased chance of these Bills coming into force:

Employment Relations (Flexible Working) Bill which amends the right to request flexible working in part 8A (sections 80F and 80G) of the Employment Rights Act 1996. The Bill will introduce a requirement for employers to consult with the employee before rejecting their flexible working request; allow an employee to make two statutory requests in a 12-month period (rather than the current provision which allows just one request); reduce the decision period within which an employer is required to administer the statutory request from three months to two months; and remove the requirement that the employee must explain, in the statutory request, what effect the change would have on the employer and how that might be dealt with. On 5 December 2022, the Government published its response to consultation on flexible working rights which agrees with many of these proposals in the Bill. However, the Government also indicated that it also proposes to make the right to request flexible working being a day one right. This will likely be introduced by way of secondary legislation once the Bill has been passed.
Carer’s Leave Bill provides powers to make regulations to create an entitlement to Carer’s Leave for employees by amending or inserting new provisions into the Employment Rights Act 1996. The form of leave will be available to employees for caring for a dependant with a long-term care need and will be unpaid and would be a day one right (meaning no service requirement). The Bill also suggests that the leave can be taken flexibly either as half-days or individual days, up to a week and must be taken over a 12-month period. In addition, employees will not be required to provide evidence in relation to a request for Carer’s Leave. As you would expect, the Bill also provides that employees taking Carer’s Leave will have the same employment protections as associated with other forms of family related leave, including protection from dismissal or detriment as a result of having taken the leave.
Neonatal Care (Leave and Pay) Bill provides for Neonatal Care Leave which will be a right for employed parents to be absent from work for a prescribed period (to be set at a minimum of one week) in respect of a child who is receiving, or has received, neonatal care. All employees who meet the eligibility conditions will be entitled to this leave, regardless of how long they have worked for their employer. Where the eligible parents meet minimum requirements relating to continuity of employment (at least 26 weeks with their current employer) and earnings then they may be entitled to neonatal pay for that period of leave at a prescribed rate. In line with other entitlements to paid statutory leave, the Bill allows provision to be made for employers to reclaim payments from the Government. Again, there will be protections in relation to detriment or dismissal.
Protection from Redundancy (Pregnancy and Family Leave) Bill inserts provisions into the Employment Rights Act 1996 to extend the protected period during which the right to be offered suitable alternative vacancies exists. The protected period would run from when a woman formally notifies her employer of her pregnancy up to 18 months after the birth. The bill also introduces a new power so that equivalent legislative provision for redundancy protection can apply to those on shared parental leave or adoption leave.
Worker Protection (Amendment of Equality Act 2010) Bill intends to reintroduce employers’ liability for harassment of their employees by third parties. The Bill also introduces a duty on employers to take all reasonable steps to prevent sexual harassment of their employees, meaning that it is a positive duty rather than simply a defence. In order to give some weight to the new duty, the Bill provides for a compensation uplift of up to 25% on the amount that the tribunal can award in sexual harassment cases where there has been a breach of the duty.
Employment (Allocation of Tips) Bill is intended to create a legal obligation on employers to allocate all tips, gratuities and service charges which they are paid or which they exercise control or significant influence over to workers without any deductions.

There are other Private Members Bills but they have not yet been given the support of the Government.

Other consultation/guidance

We are also waiting for a number of responses and consultations as well as guidance from the Government in 2023.

Following a report into the practice of “Fire and rehire”, Acas provided more detailed guidance which effectively makes it clear that the practice is a last resort and employers should always explore alternative options. The Government clarified that it did not intend to legislate to prevent fire and rehire practices but have said that there will a statutory code or practice published. The Code will set out steps that employers should follow and tribunals and courts will be required to take the code into account when considering relevant cases. They will have the power to apply an uplift of up to 25% where the code applies and an employer fails to follow it. The Code was supposed to have been published last summer but has been delayed.

The House of Commons Women and Equalities Select Committee published its report on the impact of menopause in the workplace in July 2022 and set out various recommendation, including appointing a menopause ambassador and producing model menopause policies. The Government was due to respond to this in September, but the response has been delayed.

The Future of Work review was carried out last year. The first report set out in high level the four areas which should be considered in more detail: Artificial Intelligence and automation; skills; place and flexibility; and workers’ rights. This second stage, looking at these areas more closely, is likely to be carried out at the beginning of this year.

We are also still waiting for the Government response to its consultation on Restrictive covenants and whether non-compete clauses should be enforceable or only where compensation is provided. In addition we are expecting legislation in relation to confidentiality clauses and non-disclosure agreements.

Statutory Rate increases

The Low Pay Commission has provided recommendations on National Minimum Wage rates for April 2023 and in its Autumn Statement the Government accepted the proposals. The new rates will come into effect on 1 April.

age 23 or over: £10.42 per hour (up from £9.50);
age 21 to 22: £10.18 per hour (up from £9.18);
age 18 to 20: £7.49 per hour (up from £6.83)
age 16 to 17: £5.28 per hour (up from £4.81); and
apprentice rate: £5.28 per hour (up from £4.81).

The Department for Work and Pensions has set the rates for statutory maternity, paternity, adoption, shared parental and sick pay for 2023/24 which will apply from 10 April 2023. Statutory Sick pay will increase to £109.40 per week (up from £99.35) and the rate of statutory maternity, paternity, adoption, shared parental leave pay and statutory parental bereavement pay will increase to £172.48 per week (from £156.66).

Key cases in 2023

There are some key cases which we expect to be heard in the courts in 2023, or for which we are still waiting judgments to be published.

In December of 2022 the Supreme Court heard the case of Agnew – which considered whether a series of unlawful deductions is broken where the alleged deduction is more than three months apart. The case is on appeal from the Northern Ireland Appeal Court. It differs from another decision in the UK which held that the series of deductions is broken. In the Northern Ireland case it was held that as a matter of law a series of deductions is not ended by a gap of more than three months In another case this year, the Court of Appeal in England gave a strong view that the Northern Ireland Court of Appeal decision was correct and so it will be interesting to see if the Supreme Court agree,. This will have a significant implication for employers in holiday pay cases particularly.
The Court of Appeal has part heard the case of Benyatov v Credit Suisse Securities (Europe) Ltd which is considering the duty of care on an employer to protect an employee from criminal convictions while carrying out duties abroad.
The Supreme Court is also due to hear an appeal from the Court of Appeal concerning a dispute with HMRC over the tax status of certain football referees. The Supreme Court will also hear another employment status case involving members of the gig economy and their right with regard to joining a trade union.

This year could see many important changes in employment law. We will monitor all developments on our blog.