Employment law – what to expect for 2023?

Whilst the Harry and Megan soap opera persists, we look ahead to some key developments that could shape UK employment law in 2023.

Developments in UK employment legislation have been somewhat limited over the past few years, with most changes revolving around the Covid-19 pandemic. Her late Majesty previously announced, in 2019, the notion of an Employment Bill which had the potential to develop a wide range of employment legislation in the UK. However, since then the government’s attention has been diverted by the pandemic, political civil war, an actual war in Ukraine and a cost of living crisis on a scale scarcely seen before.

Fast forward to 2023 and there is finally some hope of things progressing, albeit thanks to Private Members’ Bills (“PMBs”) rather than a government led Employment Bill (which still retains a tag line of, “it will be delivered when parliamentary time allows”). Nevertheless, the PMBs seek to address a number of employment areas previously proposed by the Employment Bill. There remains uncertainty as to the exact timing of the introduction of these changes but the direction of travel is clearer. It is therefore important that employers start to prepare ahead of time by reviewing and potentially updating their staff policies and practices and considering what training may be required for staff across their business.

1. Protection from Redundancy (Pregnancy and Family Leave) Bill 2022-23

This Bill seeks to extend redundancy protections in the Maternity and Parental Leave etc. Regulations 1999. Currently, women on maternity leave must be offered a suitable alternative vacancy where one is available in priority over other employees at risk of redundancy. This Bill would allow the government to introduce regulations to extend this priority to employees during their pregnancy and after they return to work from maternity leave. The length of the protected period following the end of a woman’s maternity leave is not specified in the Bill, but is anticipated to apply for a six-month period. Enhanced protections will also be introduced to protect those who have taken shared parental and adoption leave.

The Bill is due to be discussed again in the Commons on 3 February 2023 and we will provide an update in due course.

2. Neonatal Care (Leave and Pay) Bill 2022-23

This Bill would provide parents of a child who is receiving, or has received, neonatal care a statutory entitlement to one week’s leave for each week that their child spends in neonatal care (up to a maximum of 12 weeks). This would be a day one right for employees, however in order to be entitled to statutory pay for such leave, an employee will need to have worked for their employer for at least 26 weeks.

Statutory pay would be at government prescribed rates which would be determined each year in the same way as other paid statutory leave. Parents taking neonatal care leave would also have equivalent employment protections as those associated with other forms of family related leave including, protection from dismissal or detriment as a result of having taken neonatal leave.

The Bill is due to be discussed again in the Commons on 20 January 2023 and we will provide an update in due course.

3. Carer’s Leave Bill 2022-23

This Bill seeks to provide employees with caring responsibilities the right to take one week of unpaid leave per year. Like neonatal care leave above, the right to carer’s leave will be a day one right and will provide protection from dismissal or detriment as a result of taking such leave. Whilst there are calls for a carer’s allowance, at this stage there is no intention to introduce any form of statutory payment for this period of leave and it would be up to an employer as to whether it continued to pay the employee in full or otherwise.

This Bill appears to be a ‘stepping-stone’ for introducing carer’s rights into the workplace, recognising the stress and anxiety they often face, whilst also managing the impact on employers to ensure that they are able to plan and manage any absences arising from carer’s leave.

The Bill is due to be discussed again in the Commons on 3 February 2023 and we will provide an update in due course.

4. Employment Relations (Flexible Working) Bill 2022-23

Flexible working arrangements are commonplace in a lot of businesses now, however there is often a misconception between informal flexible working arrangements and a statutory flexible working request which varies an employee’s terms and conditions of employment.

This Bill seeks to provide clarity and additional protection for employees making statutory flexible working requests. Presently, the right to request flexible working is only available to employees with at least 26 weeks’ continuous employment and only one request may be made in any 12 month period. Employers have eight possible grounds to rely on in rejecting a flexible working request, however there has been concern that these reasons are often relied on arbitrarily without much or any consultation with an employee.

Changes proposed under the Bill would include:

• making the right to request flexible working a “day one” right;
• allowing employees to make two requests in any 12 month period;
• reducing the decision period within which employers are required to respond to a request from 3 months to 2 months;
• introducing a requirement for employers to consult with an employee before rejecting their request; and
• removing the requirement that an employee must explain what effect the change would have on their employer and how that might be addressed.

The Bill is due to be discussed again in the Commons on 24 February 2023 and we will provide an update in due course.

5. Worker Protection (Amendment of Equality Act 2010) Bill

The Equality Act 2010 (the “Act”) provides strong legal protections against sexual harassment in the workplace. Despite this, persistent reports and revelations that have emerged in recent years indicate that it remains a problem within the workplace, including third-party harassment. Following a consultation process, the government announced an intention to introduce two legislative measures, i) a duty on employers to take reasonable steps to prevent sexual harassment, and ii) explicit protections from harassment by third parties.

If enacted in its current form, this Bill will introduce a positive duty on employers to take reasonable steps to prevent employees from carrying out acts of sexual harassment. If a successful claim of sexual harassment is made in an Employment Tribunal and it is found that the employer has failed in this duty, then the employee may be entitled to an uplift in their compensation of up to 25% in consequence of that failure. Furthermore, an employee would be able to bring a third party harassment claim against their employer after a single incident of harassment by a third-party, for example, a client or customer. Previously the legal test only imposed liability after the third incident which meant that successful third party harassment claims were extremely rare.

The Bill is due to be discussed again in the Commons on 3 February 2023 and we will provide an update in due course

6. Employment (Allocation of Tips) Bill 2022-23

The purpose of this Bill is to create a legal obligation on employers across sectors to allocate all tips, gratuities and service charges which they are paid or over which they exercise control or significant influence (“qualifying tips”) to workers without any deductions, such as an administration charge (typically 3-5%) to cover credit card fees, bank charges and third-party costs such as Tronc. The Bill also requires employers to ensure that the distribution of qualifying tips between workers is fair. As well as ensuring fairness for workers, this Bill seeks to level the playing field for employers who already allocate all tips to workers by ensuring that all employers follow the same rules and unfair tipping practices are eradicated. Employers will be required to make available to workers a written policy setting out how tips are dealt with and allocated between workers. Upon request, employers will also be required to share records of the qualifying tips they have received and the amount of those tips which have been allocated to the requesting worker.

This Bill would not impact tips which are given directly to workers, which are the legal property of the worker albeit it remains possible for employers to exercise control or significant influence over such tips through the workers terms of employment.

It remains the case that qualifying tips may not form part of a worker’s remuneration for National Minimum Wage purposes.

The Bill is due to be discussed again in the Commons on 20 January 2023 and we will provide an update in due course.

7. ‘Fire and re-hire’ Practices

The practice of ‘dismissal and re-engagement’, known as ‘fire-and-rehire’, is one option that may be available to an employer seeking to effect changes in the terms of employees’ contracts. It involves dismissing employees and offering to re-engage them on a new contract with new terms, in circumstances where the employees’ agreement to the changes has not been obtained. The term is also used to refer to employers holding out the prospect of dismissal and re-engagement to workers or their representatives during negotiations about changing terms and conditions.

This type of practice has attracted increasing parliamentary scrutiny with concerns that some employers are using fire and re-hire tactics to undermine or bypass genuine workplace dialogue. A PMB (the Employment (Dismissal and Re-employment) Bill 2019-21) was introduced to Parliament in June 2020, however this Bill remains firmly on hold.

Separately, the Department for Business, Energy and Industrial Strategy (“BEIS”) invited Acas, in its capacity as an independent and impartial non-departmental body with expertise in industrial relations, to host a roundtable with relevant stakeholders on the use of fire-and-rehire practices. A report was published on 8 June 2021 and the matter was most recently debated in the House of Lords on 3 November 2022, where it was announced that threats of dismissal and re-engagement should not be used as a negotiation tactic and the government will bring forward a statutory code of practice (“Code”) for consultation “in due course”.

The proposed new Code would require businesses to hold fair, transparent and meaningful consultations with employees with respect to proposed changes to their terms of employment. Courts and Employment Tribunals would also be required to have regard to the Code, and would be able to award an uplift on any compensation awarded of up to 25% in the event that an employer has unreasonably failed to follow the Code. However, the government keenly emphasises that it has no intention of banning fire and re-hire practices altogether stating, “We do not want to encourage the practice but do not think that banning it would be right because, in some limited circumstances, it is the only way to save businesses and protect the jobs within them.”

For now, this issue remains firmly in the category of ‘watch this space’.

8. Transport Strikes (Minimum Service Levels) Bill 2022-23

This Bill is in its infancy but seeks to provide for minimum service levels for transport services affected by strike action by trade unions. Currently, during strikes within transport services, an employer does not have any statutory means of ensuring that a level of service can operate in a way which takes into account the individual rights of passengers and other transport users. This Bill and subsequent regulations are designed to enable employers to require enough employees to work so as to ensure minimum service levels are delivered in specified transport services.

With further strikes planned for 2023, this area looks set to remain a hot topic of discussion but in terms of new legislation being passed any time soon, the picture is not so clear.

9. Retained EU Law (Revocation and Reform) Bill 2022-23

As mentioned in our blog , this Bill provides that all EU-derived secondary and retained direct EU legislation (which amounts to some 2,400 individual pieces of legislation) will expire at the end of 2023 unless they are expressly retained. Whilst this ‘sunset’ provision is intended to accelerate reform and planning for future regulatory changes, benefiting both UK business and consumers sooner, there is also the possibility that the deadline may be extended, where necessary, until 23 June 2026.

Little more is known at this stage as to which EU-derived laws the government intends to retain, however there is some concern that employment related protections, such as the Working Time Regulations 1998, the Agency Workers Regulations 2010 and the TUPE Regulations 2006, amongst others, could be impacted by this end of this year unless specific action is taken by the government to preserve them.

The next date for this Bill to be discussed in Parliament remains ‘TBC’ but we will provide an update in due course.

For now, the waiting game continues but employers would be well advised to be mindful of these potential developments and we will keep you updated as matters progress.

If you would like to discuss any of the matters raised in this blog, please contact Elliot Francis or any other member of the Employment team.

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