Employment Law Update 2023

By the end of 2023, the Retained EU Law (Revocation and Reform) Bill aims to abolish all EU law that is not specifically reinstated or replaced . This may affect a number of EU-derived secondary legislation, including the Working Time Regulations, Agency Worker Regulations and TUPE.

There are concerns around whether the end of 2023 will provide enough time to reform these laws, although there is a potential extension to June 2026 but no later.

We encourage employers to keep updated on developments around the Bill, as if passed, it could have a serious impact for both employers and employees.

From 1 April 2023 the following rates will apply:

23 and over: Current – £9.50, new – £10.42 (9.7% increase)
21 or 22: Current – £9.18, new – £10.18 (10.9% increase)
18- 20: Current – £6.83, new – £7.49 (9.7% increase)
16-17: Current – £4.81, new – £5.28 (9.7% increase)
Apprentices: Current – £4.81, new – £5.28 (9.7% increase)

These are significant pay increases, reflecting steep inflation levels and ongoing cost of living increases.

From 2 April there will be a 10.1% increase in the following statutory family payments:

• Statutory maternity pay
• Statutory adoption pay
• Statutory paternity pay
• Statutory shared parental pay
• Statutory parental bereavement leave.

These rates will increase from £156.66 per week, to £172.48 per week.

From 10 April 2023, statutory sick pay will increase from £99.35 per week, to £109.40 per week.

This increase may have a knock on effect on employers who offer enhanced or company sick pay schemes.

For dismissals taking place on or after 6 April 2023, a week’s pay (for basic award and redundancy payments) will increase to £643 (previously £571).

The compensatory award for most unfair dismissal cases will increase to £105,707 (previously £93,878).

The current position is that an employee must have worked for 26 weeks before they can make a statutory flexible working request, a request can only be made once per year and the employer must notify the outcome within a three month decision period.

First mentioned in the Queen’s speech in 2019, most recently on 5 December 2022 the government has responded to the ‘Making Flexible Working The Default’ consultation. The response confirms the government’s intention to introduce changes to the right to request flexible working.

It is understood that the government via the Employment Relations (Flexible Working) Bill will take forward measures to include making this a day 1 right, a new requirement for employers to consult with employees when they intend to reject the request, allow two statutory requests a year, provide a decision period of two months and remove the existing requirement for an employee to explain what effect, if any, the change applied would have on the employer and how that effect might be dealt with.

The Bill passed its third reading on 24 February 2023 and given the government’s latest position it is anticipated should become law in 2023. However, this is questionable given the delays already experienced and that many key aspects of the bill have now been tabled separately as other bills.

The Carer’s Leave Bill proposed the introduction of a day one right for up to five working days of unpaid leave for employees with long-term caring responsibilities of a dependant, either arranging or providing care.

Dependants include partners, children, parents, people living in the same house as the employee and people who reasonably rely on the employee.

The employee will be required to give notice twice the length of the leave and can take the time as partial or full days and can be taken flexibly at different times to suit their caring responsibilities. Proof is not needed to show how the leave has been used.

Employers should be aware that if the Bill becomes law employees will be protected from dismissal or detriment due to taking this leave. If an employer dismisses an employee because of this leave, it will be an automatic unfair dismissal.

This bill has passed all stages within the House of Commons and had its second reading in the House of Lords on 3rd March 2023; it will now advance to the committee stage.

As the law currently stands, in a redundancy process an employer has an obligation to offer those on maternity leave, adoption leave or shared parental leave suitable alternative employment (if it exists) as a priority over other employees provisionally selected for redundancy. Failure to do so is automatically unfair.

The Protection from Redundancy (Pregnancy and Family Leave) Bill proposes to increase this protection to extend to the point from which the employee tells their employer they are pregnant/ will be taking adoption or shared parental leave and also after they have returned to work, potentially for a period of up to 18 months after the child’s birth/ adoption.

This bill had its second reading in the House of Lords on 3 March 2023. There are a number of Parliamentary stages this Bill must pass before it becomes law and it is unlikely that we will see changes to existing protections before 2024.

The proposed Worker Protection (Amendment of Equality Act 2010) Bill is currently working its way through the House of Lords.

The bill would make provision in relation to the duties of employers and the protection of workers from harassment (including sexual harassment) under the Equality Act 2010.

The Bill would create new legal liabilities for employers, including protecting employees against third-party harassment during the course of employment (for example by clients or customers). If they fail to take all reasonable steps to prevent the third party harassment, employers may be liable.

The Bill will also include a new duty on employers to take all reasonable steps to prevent sexual harassment suffered by employees during their employment. If the duty is found to have been breached, an uplift of up to 25% of the compensation award may be added by a Tribunal.

The Act will come into force a year after it is passed, so its introduction is not imminent.

Current legislation allows employers to take a percentage of tips earned by staff, proposed changes will potentially impact and benefit over one million workers.

The Employment (Allocation of Tips) Bill, proposes to make it unlawful for employers not to provide employees with 100% of the tips left by customers.

It is proposed that tips will be distributed in a fair and transparent manner, so that employees are paid what they have earned. It is likely that this will be accompanied by a Code of Practice, which will offer more guidance on which workers benefit from the tips in different situations.

Enforcement of these obligations has not yet been clarified. It is proposed that employers will have to record tips and show how they have been allocated. Records will need to be kept for a minimum period and workers will have a right to request to see these records.

The bill had its second reading in the House of Lords on 3rd March 2023, after it passed through the House of Commons and completed the first House of Lords reading stage. It will now progress to the committee stage.

A draft Code of Practice has been introduced, setting out employer’s responsibilities when seeking to change employee’s terms and conditions by way of dismissal and re-engagement (or “fire and re-hire” as it is often termed).

The Code doesn’t make the practice of “fire and re-hire” illegal, and is intended to supplement ACAS guidance introduced in 2021. It recommends that the practice should be used as a last resort, and makes recommendations for sharing information and keeping changes under review. A failure to adhere to the Code could result in employment tribunals being able to award an uplift of 25% to unfair dismissal claims.

The Code is currently open for consultation until mid-April 2023 and will then need to be presented before Parliament before it can take effect.

The Strikes (Minimum Service Levels) Bill has been introduced before Parliament, in response to significant public sector industrial action at the end of 2022 and continuing into 2023.

There is currently no general requirement in the UK to maintain minimum service levels in critical services, unlike in many European countries. This Bill will allow the Secretary of State to make regulations setting out “minimum service” required in certain sectors including fire, ambulance and rail services during strikes. Employers would also be able to serve a “work notice” on unions who have given notice of a strike. Unions and workers who fail to comply would face losing protections against being sued or dismissed.

The Bill is at Committee stage in the House of Lords, but is not without controversy. It has attracted criticism from unions, and the Labour Party has also indicated that if it comes into power, it will repeal the legislation if it is enacted.

We are expecting judgment on some significant employment-related cases this year.

These include:

The Supreme Court judgement in the case of Chief Constable of the Police Service of Northern Ireland v Agnew and others, on whether a 3-month gap between underpayments of holiday pay will defeat a claim.

Whether employers can take action short of dismissal against workers participating in strike action, in the case of Mercer v Alternative Future Group Ltd which is due before the Supreme Court.

The Employment Tribunal taking a further look in the case of Rooney V Leicester City Council to see whether Mrs Rooney’s menopause symptoms met the definition of disabled.

The Supreme Court judgment to see whether agency staff have the same rights to apply for job vacancies as permanent staff in Kocur v Angard Staffing Solutions.