Employment law update: What to look for in 2023

The new year brings with it a swathe of proposed changes and revisions to employment law. Senior associate solicitor Katy Parkinson and trainee Hannah Pinder from Harrison Drury’s employment law team provide a timeline covering key areas of change and future updates expected in employment law in the UK.

Upcoming changes in employment law

Rate Changes

April 2023 will see the usual set of statutory rate increases, including the annual increases in National Minimum Wage as follows:

• Workers aged 23 and over: £10.42 an hour (National Living Wage)
• Workers aged 21-22: £10.18 an hour
• Development rate for workers aged 18-20: £7.49 an hour
• Young workers rate for workers aged 16-17: £5.28 an hour
• Apprentice rate: £5.28 an hour.

The above rates will come into force on April 1, 2023.

On April 2, 2023, statutory maternity, adoption, paternity and shared parental pay will rise from £156.66 to £172.48 a week. Statutory sick pay will also rise from £99.35 to £109.40 per week.

Flexible working

On December 5, 2022, the government confirmed that the right to request flexible working will become a ‘day one right’ for employees and other workers, enabling them to request variations to their terms and conditions of employment, including working hours, times and locations, rather than having to wait until they have 26 weeks’ continuous service.

Other changes will include:

• Employers being required to consult with an employee where they are considering rejecting a request.
• Employees being able to make two requests in a 12-month period (currently they can only make one),
• Employers responding to a request within two months (down from three months).
• Employees no longer needing to specify how their employer might deal with the effects of their flexible working request.

Bank holiday for the King’s coronation

There will be an additional bank holiday on May 8, 2023 to celebrate the King’s coronation.

Employers would be advised to check employment contracts and consider how they dealt with the two additional bank holidays last year, to help them to work out what their position is regarding employee entitlement to this bank holiday.

The Retained EU Law (Revocation and Reform) Bill

In September 2022, the government proposed one of the most controversial Bills in recent years, the Retained EU Law (Revocation and Reform) Bill, which aims to abolish all EU-derived UK legislation by December 31, 2023.

Unless new law is introduced to keep the EU derived legislation, over 2,400 pieces of EU law could be removed from the UK statute book by the end of the year, including many employment-related regulations. Although there is scope to extend the time to complete the process to June 23, 2026, it is looking like a busy year for legislators.

Predictions For 2023

Neonatal leave

A statutory right for new parents to receive up to 12 weeks’ extra leave and statutory pay if their baby is receiving neonatal care will be introduced. The right to neonatal care leave will be a day one right, but there will be a qualifying period of a minimum of 26 weeks service for the right to receive neonatal care pay.

Extending redundancy protection for women and new parents

The existing protection from redundancy during or after pregnancy, or after periods of maternity, adoption or shared parental leave, is to be extended. Currently employers have an obligation to offer such employees a suitable alternative vacancy where one exists.

It is expected that employees returning to work from such periods of leave will receive an additional six months’ protection from redundancy.

Carer’s leave

The Carer’s Leave Bill will introduce a statutory right to one week’s unpaid carer’s leave for employees who have dependants with a long-term care need.

The right will be available from day one of employment and will be flexible i.e. the week can be taken at different times to suit the employee’s caring responsibilities, and employees will be protected from suffering detriment or being dismissed as a result of having taken Carer’s Leave.

Paid leave to attend fertility treatment appointments

The Fertility Treatment (Employment Rights) Bill proposes to introduce a right allowing an employee to take paid time off work to attend fertility treatment appointments, as well as a right for employees whose partners are receiving fertility treatment to take unpaid time off work to accompany them to such appointments.

Paid leave following miscarriage, ectopic pregnancy or molar pregnancy

The Miscarriage Leave Bill proposes a right for employees to have three days’ paid leave where they experience miscarriage, ectopic pregnancy or molar pregnancy before 24 weeks.

Tips and gratuities

The proposal to legislate to ensure that all tips, gratuities and service charges are paid to workers in full took a step closer to becoming law on January 20, 2023, when the Bill passed its final reading in Parliament. The Bill will now go forward to the House of Lords and, if approved, it will become law.

Changes to UK GDPR law

The government is considering replacing the UK General Data Protection Regulation, which derives from EU legislation, with a British data protection framework. The government aims to make the new system to be business and consumer-friendly, and for it to be simpler and clearer for businesses to navigate.

Statutory Code on ‘fire and rehire’

Following the P&O Ferries’ dismissal of around 800 employees in March 2022, the government has recently launched a consultation on a proposed statutory code of practice on the use of ‘fire and re-hire’ practices.

The code sets out detailed steps that employers should take when seeking to make changes to contractual terms, including providing information, engaging in meaningful consultation and exploring alternatives, and makes clear that employers should not use threats of dismissal as a negotiating tactic.

The consultation closes on April 18, 2023 and the finalised code will be brought into force when Parliamentary time allows.

Positive duty on employers to prevent sexual harassment

The Worker Protection (Amendment of Equality Act 2010) Act seeks to introduce a positive duty on employers to ‘take all reasonable steps’ to prevent sexual harassment in the workplace. It would also make employers liable for the harassment of staff by third parties, such as clients or customers, and provides for a compensation uplift where employers are found to have breached their duty.

Trade unions and strike action

The Strikes (Minimum Service Levels) Bill was introduced in Parliament on January 1, 2023 and makes provision for minimum service levels in connection with the taking of strike action relating to certain services. The Bill seeks to ensure crucial public services such as rail, ambulances, and fire services maintain a minimum service during industrial action.

Holiday pay entitlement for part-year and irregular hours workers

Further to the Supreme Court’s decision in Harper Trust v Brazel, the government has launched a consultation on calculating holiday entitlement for part-year and irregular hours workers. It proposes to introduce a holiday entitlement reference period to ensure that holiday entitlement and pay is directly proportionate to time spent working. The consultation closes on March 9, 2023.

Anticipated Case Law

We are expecting several employment-related decisions from the Supreme Court this year.

• Underpaid Holiday Pay

The Supreme Court will decide if historic holiday pay claims can be brought where there are gaps of three months or more between a series of underpayments. The case is an appeal from the Northern Irish case of Chief Constable of the Police Service of Northern Ireland (PSNI) and another v Agnew and the outcome could have significant implications for employers across the UK. If the UK Supreme Court agrees with NICA (as many commentators think it will), UK employers could face new holiday pay claims potentially dating back two years, or far longer than that.

• Industrial Action – detriment short of dismissal

It is anticipated that in late 2023 the Supreme Court will hear an appeal of Mercer v Alternative Future Group Ltd & Anor, which will determine the scope of the protection for union members taking part in industrial action. UNISON, the trade union who Ms Mercer was a representative of, is seeking to overturn a Court of Appeal’s decision which allowed employers to sanction employees that take part in industrial action without breaching their human rights.

Other things to look out for in 2023 and beyond

Other potential 2023 employment law changes include:

• Ethnicity pay gap reporting.
• The extension of the right of shared parental leave to grandparents.
• The new statutory cap on a week’s pay for the purposes of calculating the basic award and statutory redundancy pay is likely to be announced in March 2023 and will come into effect on the April 6, 2023.
• The Presidents of the Employment Tribunals in England & Wales and Scotland are due to conduct the annual re-evaluation of the Vento bands (which apply to awards made by the Employment Tribunal in discrimination claims) in March 2023, with the changes coming into force on the April 6, 2023.

Harrison Drury’s specialist employment law team is on hand to assist and provide you with tailored, practical advice. If you would like to speak to our team, please contact us on 01772 258 321 or by email: employment@harrison-drury.com.