Employment law: what to expect in 2023

Victoria Templeton, HR Knowledge Manager at HR Solutions, explains what employment law changes we can expect in 2023 and beyond, including the impact of the Retained EU Law (Reform and Revocation) Bill.

What employment law changes will there be in 2023?

Over the last few years, other than legislation relating to the COVID-19, there has been little development in employment law. However, in 2023 we are expecting to see large changes to employment law with significant legislation introduced to parliament.

In this article we look at some of the confirmed and proposed developments in employment law that businesses need to be aware of, due to take effect in 2023 and beyond.

1. Retained EU Law (Reform and Revocation) Bill

When the UK left the European Union, the 2018 European Union (Withdrawal) Act gave the UK legal authority to continue operating legislation underpinned by European law (known as Retained EU Law), including case rulings. What the Retained EU Law (Reform and Revocation) Bill would do, if passed, is revoke legislation that derives from European law meaning the UK would no longer be bound by it, unless UK parliament agreed to retain it or retain but with amendments.

Within the Bill there is a clause that sets a date by which the UK would no longer be bound by European based legislation. This date is the 31 December 2023, although there is scope to extend this for specified legislation until 23^rd June 2026.

For employers, this Bill is potentially significant and would bring fundamental changes to key areas of employment law. Key pieces of employment legislation which currently would fall within the scope of this Bill include:

The Agency Workers Regulations 2010 – these regulations provide rights to temporary agency workers so that they have some basic protection regarding working and employment conditions. It came into force back in 2008 following the EU’s introduction of the EU Agency Workers Directive.
The Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 – these regulations give fixed term workers the right to no less favourable treatment than a comparable permanent employee and covers all terms and conditions of employment, including pay and pensions. They are based on the EU Fixed Term Worker Directive.
The Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 – those who work part time are protected by these regulations from being treated less favourably than equivalent full-time workers. They were introduced following the introduction of the EU Framework Agreement on Part Time Work Directive.
The Transfer of Undertakings (Protection of Employment) Regulations 2006 – the Transfer of Undertakings (Protection of Employment) (TUPE) derive from the EU’s Acquired Rights Directive. The legislation provides protection to workers in the event of the business changing hands.
The Working Time Regulations 1998 – these regulations derive from the European Working Time Directive and are primarily in place to protect workers from excessive hours. It ensures that working hours operate safely and to also provide employees with sufficient rest periods.

Employers should be mindful of the bill throughout the year and make preparations should any of the above be amended. The UK government are maintaining a Retained EU Law Public Dashboard to reflect the governments progress in reforming Retained EU law, which will be maintained on a quarterly basis.

2. Strikes (Minimum Service Levels) Bill

The Strikes (Minimum Service Levels) Bill, if passed, would mandate employees working in six sectors, which includes health, education, and transport, to provide a minimum level of service when there is strike action. The exact detail of what the minimum service level would be are not yet defined but would be set out later in the year and will be part of the regulations.

It is thought that it would work by an employer being able to reasonably identify the staff that would be required to work during days when strike action is to take place so that they can ensure a certain level of service can still be delivered.

This Bill is currently at the House of Lords stage, before it progresses to the final stage for final considerations of amendments before receiving Royal Assent. It had its first reading in the House of Commons on the 10 January, and it has quickly progressed through the various stages, so we can expect to see this become legislation fairly soon. However, the government have stated that there must be a minimum 3-month gap between the regulations being made and when they come into force.

3. Employment Bill

The Queen’s Speech back in December 2019 announced the Employment Bill, aimed at supporting workers and families by introducing various employment rights and enhancing existing ones. Due to the pandemic, there has been little progress, but in recent months we have instead seen several private member bills being introduced specifically to deal with some of the areas that had been set out in the original Employment Bill. We do expect some of these Bills to be approved and become Acts at some point in 2023. Specifically, these include:

flexible working as a Day 1 right
neonatal leave and pay
carer’s leave
protection against redundancy for pregnant employees
allocation of tips in full
to place a legal duty on employers to prevent sexual harassment in the workplace

See further information on each of these areas below.

4. Employment Relations (Flexible Working) Bill

Following a period of consultation, the government have recently concluded that it will introduce changes to existing flexible working rights through the Employment Relations (Flexible Working) Bill. Flexible working as a Day 1 right is the main proposal and was initially introduced as part of the Employment Bill.

Other developments on flexible working include:

The requirement to have 26 weeks continuous service to make a request will be abolished. Instead, it will become a Day 1 employment right.
There will be a new requirement on employers to consult with their employee when intending to decline the request.
The rule of allowing employees to only make one request in a 12-month period will be abolished and instead, employees will be able to make two.
The time limit in which to fully respond to an employee’s request, including the time taken to hear an appeal, will be reduced from three to two months.
Employees will no longer be required to detail the effects of their proposed change on the employer and ways in which they can be dealt with.

5. Neonatal Care (Leave and Pay) Bill

Neonatal care is the type of care a baby receives in a neonatal unit if they are born premature, sick, or with a low birth weight. The Neonatal Care (Leave and Pay) Bill proposes to introduce new employment leave and pay rights for employees of parents of babies that are admitted into hospital as a neonate (28 days old or less).

Full detail is to be confirmed, but it is thought that the entitlement to leave will be from Day 1 but the entitlement to pay will be subject to the employee having a certain amount of continuous service and minimum earnings.

6. Carer’s Leave Bill

The Carer’s Leave Bill would give employees who are unpaid carers the statutory right to take up to one week (five working days) of unpaid leave per year. It is expected, although legislation is yet to be drafted, that it will be a Day 1 right for those with employee status (not worker status) and that the person they care for will broadly need to meet the definition of a dependant as per the right to time off for dependants.

The person cared for would need to have a long-term care need such as one that is long-term physical or mental, or an injury or disability, or issues related to old age.

7. Protection from Redundancy (Pregnancy and Family Leave) Bill

The Protection from Redundancy (Pregnancy and Family Leave) Bill, if introduced, would extend existing legislation that provides employees on maternity leave to greater employment rights in a redundancy situation to any other employee.

At present, the employee that is being made redundant has a legal entitlement to be offered any suitable alternative role that is not substantially worse than the role that they are being made redundant from. This entitlement is only in place during a period of maternity. What this new Bill would do, is to extend this right so that it continues for six months after maternity leave has finished.

The Bill is currently at the House of Commons report stage, once this is complete and a final reading has taken place again in the Commons, then it will progress to the House of Lords. At this point, there has been no opposition to the Bill, so likely that it will go through in its current form.

8. Employment (Allocation of Tips) Bill

The Employment (Allocation of Tips) Bill would enable workers to receive tips, gratuities and service charges paid by customers that are earned in full, meaning that an employer would be required to pass on all tips without deduction. If passed, it would also require an employer to have a written policy where tips are awarded on more than an occasional and exceptional basis. It is also expected that a Code of Practice would be published.

This Bill will have its second reading in the House of Lords on 3 March 2023, and it is likely that this legislation would be passed at some point in 2023.

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

The Worker Protection (Amendment of Equality Act 2010) Bill would amend the parts of the Equality Act 2010 that deal with harassment. Specifically, if passed, it would place a legal duty on employers to prevent the sexual harassment of its employees, and place liability on employers for harassment of its employees by third parties.

10. Other interesting areas of employment law to look out for

There are several other key areas that we could see developing this year:

Trade Unions, along with the Trade Union Congress, have launched a judicial review that would overturn legislation that was introduced last summer that deals with strike action. The legislation at present allows businesses to hire agency workers to cover for permanent employees who choose to go on strike. The unions are challenging this and believe it is unfair because there was no consultation with them.
A new Code of Practice has been published regarding the practice of ‘fire and re-hire’, which was partly brought in following the P&O Ferries redundancy handling. The date of implementation is yet to be confirmed but the advice to employers is to consider as though it is.
A new consultation has begun seeking views from businesses, unions and professional bodies on calculating holiday pay for those workers who work irregular hours or part year. This is following the Supreme Court ruling in the Harpur Trust v Brazel case.

About the author

Victoria Templeton is the HR Knowledge Manager at HR Solutions, an outsourced HR services firm, part of the WorkNest group, offering employment law, and health and safety support and advice to businesses across the UK.