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It is fair to say that 2022 has been something of a rollercoaster.  In the employment sphere, the dawn of the year saw HR teams continuing to grapple with Covid-19 testing and self-isolation requirements, as well as managing a shift towards more formalised home and hybrid working arrangements. More recently, the cost-of-living crisis has led to strained pay negotiations and increased trade union activity (including strike action). On top of this, HR have had to deal with travel chaos caused by transport strikes and various holiday and other issues thrown up by unusual national events, such as the Queen’s Platinum Jubilee and the State Funeral, and sports championships like the FIFA World Cup.  

Sadly, there appear to be more tricky times ahead, with the Government’s Autumn Statement on 17 November confirming tax rises and spending cuts and the Bank of England warning of a prolonged recession. So what employment law issues lie in store for HR during 2023?  Below, we explore some possibilities.

Brexit Freedoms Bill

There are various draft bills progressing through Parliament which could become law in 2023. One such bill is the Retained EU Law (Revocation and Reform) Bill (known as the 'Brexit Freedoms Bill' or 'REUL Bill') , which the Government first presented to the House of Commons in September 2022.  

The aim of the REUL Bill is to remove (“sunset”) from the UK statute book all retained EU law by 31 December 2023, except for those pieces of legislation which the Government specifically decides to preserve. (Retained EU Law is a category of UK law which was created at the end of the Brexit transition period and consists of EU-derived legislation that was kept in our domestic legal framework by the European Union (Withdrawal) Act 2018).

This bill is significant as there are over 2,400 pieces of retained EU law which need to be reviewed by the December 2023 sunset date and there is a risk that swathes of legislation could disappear without anything to replace them if the Government has not been able to review them and decide their fate in time. Make UK has prepared a response to the REUL Bill Public Bill Committee setting out the potential consequences this draft bill could have on the manufacturing sector.  For further details, please contact Jamie at [email protected].

Data Protection and Digital Information Bill

The Data Protection and Digital Information Bill, which the Government introduced to Parliament in July 2022, aims to ease the burden of data protection compliance and better regulate the use of digital information. It is currently going through the House of Commons.  Make UK has submitted a response to the proposed changes. For further information, please contact Bhavina at [email protected].

In other data protection news, two consultations by the Information Commissioner’s Office (ICO) - the first on guidance concerning monitoring at work and the second on information about workers' health - will close on 11 and 26 January 2023 respectively.  It will be interesting to see what, if any, changes the ICO chooses to make to its guidance in response to these consultations.

Government-backed private members’ bills

The long-anticipated Employment Bill has still not materialised. (In November, it was said in the House of Lords that this bill will be brought forward "when parliamentary time allows"). However, some of the measures that had been expected to be included in the Employment Bill appear instead in private members’ bills progressing through Parliament, which the Government is supporting, as follows:

  • The Employment Relations (Flexible Working) Bill aims to amend the process for requesting flexible working in various respects. For further details see here and the Government’s response to the consultation (published on 5 December) which confirm the Government’s intention to: 
    • make the right to request flexible working a “day one right”; 
    • introduce a new requirement for employers to consult with the employee when they intend to reject their flexible working request; 
    • allow two statutory requests in any 12-month period (rather than the current one);
    • require a decision period of two months in respect of a statutory flexible working request (rather than the current three months); and
    • remove the existing requirement that the employee must explain what effect, if any, the change requested would have on the employer and how that effect might be dealt with.
  • The Protection from Redundancy (Pregnancy and Family Leave) Bill aims to extend the redundancy protections that currently apply to employees on maternity, adoption and shared parental leave to employees who are pregnant or who have recently returned to work from such leave (see here).  
  • The Neonatal Care (Leave and Pay) Bill makes provision for up to 12 weeks of statutory leave and pay for employees whose children are admitted to neonatal care for at least seven days (see here).  
  • The Carer’s Leave Bill aims to introduce a statutory right to one week’s unpaid leave per year for employees with caring responsibilities (see here). 

We expect these changes to be implemented relatively soon although no timescale has been announced. Many of these bills will have their third reading in the House of Commons in January/February 2023.  We will of course keep you updated on key developments.

Other possible legislative developments

Other bills which are in the early stages of being debated in the House of Commons and are worth keeping an eye on during 2023 include: the Worker Protection (Amendment of Equality Act 2010) Bill (seeking to reinstate protections for workers from harassment by third parties, such as clients, customers and patients); the Employment (Application Requirements) Bill (to regulate the use of minimum qualification or experience requirements in job applications); the Fertility Treatment (Employment Rights) Bill  (to require employers to allow employees to take time off from work for appointments for fertility treatment); the Miscarriage Leave Bill (to make provision for three days of paid leave for people who have experienced miscarriage, ectopic pregnancy or molar pregnancy before 24 weeks); and the Working Time Regulations (Amendment) Bill  (to amend the Working Time Regulations 1998 to reduce the maximum working week from 48 hours per week to 32 hours per week and to provide for overtime pay).  

Increased statutory pay rates

The Government has confirmed that the rate of statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay will go up to £172.48 per week. This increase is expected to occur from 2 April 2023. (Note that, for statutory maternity pay and statutory adoption pay, the first six weeks are payable at the “earnings-related rate”, i.e. 90% of the employee’s normal weekly earnings, and the remaining 33 weeks are payable at the statutory rate or the earnings-related rate, whichever is lower. Statutory paternity pay and statutory shared parental pay are both payable at the lower of the statutory rate and the earnings-related rate.)

The rate of statutory sick pay will increase to £109.40 per week, from £99.35. This increase is expected to occur on 6 April 2023. 

To be entitled to the above statutory payments, employees’ average earnings must be equal to or more than the lower earnings limit, which will remain at £123 per week.

The various rates of the national minimum wage are also due to increase from 1 April 2023, as follows:

  • The National Living Wage (NLW), the statutory minimum for workers aged 23 and over, will increase by 9.7% to £10.42 per hour. 
  • The rate for workers aged 21 to 22 will increase by 10.9% to £10.18 per hour.
  • The rate for workers aged 18 to 20 will increase by 9.7% to £7.49 per hour. 
  • The rate for young workers aged 16 to 17 will increase by 9.7 % to £5.28 per hour.
  • The apprentice rate will increase by 9.7% to £5.28 per hour.  

The NLW, Real Living Wage and London Living Wage normally increase in November each year, but due to the cost-of-living crisis the announcement of this year’s Real Living Wage and London Living Wage changes was brought forward to September 2022. See here for further details. Living Wage Employers should implement the new rates as soon as possible (and by 14 May 2023 at the latest).

Statutory Code of Practice to address "fire and rehire" 

The Government intends to publish a new Statutory Code of Practice to address dismissal and re-engagement (“fire and rehire”) practices. Tribunals and courts will be required to take the code into account when considering relevant cases and have the power to uplift an employee's compensation (by up to 25%) where an employer unreasonably fails to follow the code. The Government intends to publish the draft in the "near future".

Possible changes to UK immigration rules

The Government has hinted that it might make changes to the UK immigration system, in particular the points-based system and the Shortage Occupation List (“SOL”), to address labour shortages.  The SOL is a list of jobs which the Government considers to be in short supply within the UK labour market. Currently, if job is listed on the SOL, lower application fees and reduced salary requirements apply to the sponsored worker’s visa application. It is possible developments may occur in 2023 to help UK businesses to recruit overseas workers more easily, although as yet no formal Government proposals have been announced.

Cases to look out for

The following important cases are due to be heard in the coming months:

  • Chief Constable of Northern Ireland v Agnew is a significant case relating to holiday pay and unlawful deductions which is due to be heard by the Supreme Court on 14 to 16 December 2022. The question is whether a "series" of unlawful deductions from holiday pay is necessarily broken by gaps of more than three months.
  • Fentem v Outform EMEA Limited is due at the Court of Appeal on 31 January or 1 February 2023.  Here, the employer invoked a clause in the employee's contract enabling it, once the employee had resigned, to terminate their employment immediately by making a payment relating to the unexpired period of the employee's notice. The Employment Appeal Tribunal (EAT) found that in these circumstances the employee had not, as a matter of law, been dismissed by the employer so a claim for unfair dismissal necessarily fails.
  • Two separate claims have been filed in the East London Employment Tribunal (Manjang v Uber Eats UK Ltd and other) alleging that Uber's use of a facial recognition system to verify drivers’ identity is indirectly discriminatory on the ground of race. This is an interesting issue, although the claims are only at tribunal stage.  
  • Dr Mackereth is seeking permission to appeal in the Court of Appeal in Mackereth v Department for Work and Pensions. See our e-alert on gender-critical beliefs for a reminder of the EAT’s ruling in this case.

How we can help

As it stands, 2023 is already shaping up to be quite a busy year from an employment law perspective, and there are likely to be plenty of other issues that crop up in the months ahead. As ever, Make UK are here to help you navigate the compliance challenges thrown up by new legal developments. 

We will provide updates on the ever-evolving HR and employment law agenda throughout the year. Dates for our popular Spring Employment Law Update will be released soon. 

For details of how we can support you with a thorough review of your HR handbooks and policies to ensure they are compliant as we head into 2023 (available at a discounted price if purchased in January), please email [email protected].

If you are a Make UK subscriber, you can speak to your regular adviser with any queries and to request further consultancy support. If you are not a Make UK subscriber, our expert HR and legal advisers can offer guidance on a consultancy basis. For further information, contact us on 0808 168 5874 or email [email protected].

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