Employment law: what is on the horizon in 2023?

7th February 2023

Man and woman sitting across from each other talking

2023 is set to be an exciting year for employment law with potential for significant legislative changes.

Proposed Withdrawal of all European Union (EU) Law

The implication of the withdrawal from the EU could see significant legislative changes in 2023 if current EU laws are removed and replaced with new UK ones.

Employment legislation could see a seismic change, given that numerous EU laws may disappear, such as paid annual holiday and the 48-hour working week as contained in the Working Time Regulations, TUPE, the Agency Worker Regulations and the Part-Time and Fixed-Term Worker Regulations.

While the 2023 deadline to implement new UK laws may be delayed, change is imminent. Therefore there are lots of challenges ahead as new practices and procedures are introduced under new legislation.

‘Fire and Rehire’ code of practice

There is to be a fresh approach to dismissal and re-engagement of employees, also known as ‘fire and rehire’. The government has developed a draft code of practice which aims to develop a clear procedure for employers. In part, this was prompted following the mass dismissals of P&O Ferries in 2022 which saw large numbers of employees dismissed and new employees engaged on lower salaries.

The draft code sets out an employer’s responsibilities when seeking to change terms and conditions of employment. At the heart of the code is the importance of a “meaningful” consultation, transparency in proposed contractual changes and engaging in suggested alternatives without fear of dismissal.

If implemented, employment tribunals would have the authority to increase compensation awarded to an employee by up to 25% if it is determined an employer has not adhered to the code.  The government consultation is set to close on 18 April 2023 with implementation to be confirmed.

Holiday pay

Following the decision in the Supreme Court case of Harpur Trust v. Brazel, the current legal position on holiday pay seems to give an unfair advantage to workers who work part-time or have irregular working patterns.  As a result of the Supreme Court’s interpretation of the Working Time Regulations, these types of workers have a greater holiday entitlement than ‘standard’ workers. The government is consulting on the future approach to calculating holiday for these workers by looking again at the 52-week reference period disparity.

The consultation closes in March 2023. Whilst the proposal is a possible resolution to the issues caused by the Harpur Trust v. Brazel case, there are concerns over its practical implementation into current legislation.

Flexible working

Proposals for reform in relation to flexible working requests may see an abundance of changes impacting both employers and employees. If implemented, the following changes are on the horizon:

  • The right to request flexible working will become a day one right for all employees – i.e., it can be requested from the first day of employment;
  • Employers will be required to consult with an employee in relation to a flexible working request;
  • Employees will be allowed to make two flexible working requests in a 12-month period;
  • The timeframe for employers to respond to a request will be reduced from three to two months.

 Family leave and pay

The government has supported several Private Members’ bills relating to family leave and pay and protecting employees returning from family, if implemented we could see the following changes:

  • Protection from redundancy for pregnant employees and new parents returning to work from maternity, shared parental or adoption leave;
  • An extension to the redundancy protection period so that it begins when an employee informs her employer that she is pregnant and ends 18 months from the start of maternity leave. Similar provisions will apply to employees who are adopting a child or taking a period of shared parental leave;
  • Permitting parents to take up to 12 weeks of additional paid leave, on top of other entitlements (namely maternity and paternity leave) when their babies require specialist care after birth;
  • Providing paid leave for bereaved parents or for those receiving fertility treatment;
  • The introduction of unpaid carer’s leave – up to 5 days a year – for employees who have dependants requiring long-term care. In addition, protection from dismissal or detriment as a result of having taken time off.

Protection from harassment in the workplace

The government also supports a bill which, if it becomes law, would require employers to adopt a pro-active approach to prevent sexual harassment of their workers. It makes businesses responsible for the harassment of their employees by third parties. This new measure would permit workers to bring third-party harassment claims against their employers following an incident of harassment by, for example, a client or customer.

April 2023

There will be changes to National Minimum Wage and National Living Wage which will see an increase in April 2023, along with increases in statutory sick pay, maternity, paternity, adoption and shared parental leave.