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2023 predictions: what’s on the horizon for employment?

With the war, supply chain issues, rising energy costs and skills shortages, many employers will want to put 2022 firmly behind them. What does 2023 have in store? For the economy only time will tell, but for employment law things are a little clearer.

Employment Bill

The long-awaited Employment Bill is still to appear in draft form and it is doubtful this will materialise in 2023, at least in the early stages. That said, several of the reforms which the Employment Bill promised to deliver are now being progressed via Private Member’s Bills which have received backing from the government. These include:

  • Employment (Allocation of Tips) Bill: This provides that the total amount of tips, gratuities and service charges are allocated fairly between workers without deductions.
  • Protection from Redundancy (Pregnancy and Family Leave) Bill: This extends the right to be offered suitable alternative employment in a redundancy situation to the period from when the employer is informed of pregnancy or intention to take adoption leave or shared parental leave to up to 18 months after birth. The right will apply after periods of maternity, adoption or shared parental leave.
  • Neonatal Care (Leave and Pay) Bill: This introduces a right to a minimum of one week’s leave and pay for employees with responsibility for children receiving neonatal care. This will be available from the first day of employment.
  • Carer’s Leave Bill: This entitles employees to take one week’s unpaid leave in any 12-month period to provide or arrange care for a dependant with a long-term care need. This will be available from the first day of employment.
  • Employment Relations (Flexible Working) Bill: This introduces changes to the right to request flexible working, allowing employees to make two flexible working requests in a year and requiring employers to consult with the employee before refusing a request as well as to decide on a request within two months.

    The government has separately responded to its consultation on flexible working confirming that it will take forward several of the proposals including making flexible working a day one right and requiring employers to explore alternative options before rejecting a request. Employees would also no longer be required to set out who the employer might deal with the effects of their request.
  • Worker Protection (Amendment of Equality Act 2010) Bill: This creates employer’s liability for harassment of employees by third parties, creates a duty on employers to take all reasonable steps to prevent sexual harassment of their employees by third parties, and provides for a compensation uplift where there has been a breach of that duty.

For more detail on these Bills read our article here. HR teams should keep a close eye on the progress of these Bills and consider what policies and procedures need to be updated if the Bills are passed. 

Statutory rates of pay

The Department for Work and Pensions has published its proposed increases to the statutory benefit payments which are expected to apply from April 2023. In particular:

  • Statutory sick pay (SSP) will be £109.40 (up from £99.35).
  • Statutory maternity, paternity, adoption, shared parental pay, and statutory parental bereavement pay together with maternity allowance will be £172.48 (up from £156.66).

The increase normally occurs on the first Sunday in April, which would be 2 April 2023.

National Minimum Wage (NMW) and National Living Wage (NLW)

From 1 April 2023, the NLW for workers aged 23 and over will rise from £9.50 to £10.42 an hour.

NMW rates will also rise as follows:

  • Apprentice rate: £5.28 an hour.
  • 16–17-year-olds: £5.28 an hour.
  • 18–20-year-olds: £7.49 an hour.
  • 21–22-year-olds: £10.18 an hour.
  • Accommodation offset: £9.10 per week

Other developments

Last year, the government promised to publish a Statutory Code of Practice on dismissal and re-engagement. Originally due in Summer 2022, latest announcements suggest the draft Code will be published in the "near future" and representations, including from trade unions, will be considered. As and when implemented, Tribunals and courts will be required to take the Code into account when considering relevant cases and will have the power to apply an uplift of up to 25% of an employee’s compensation where the Code applies and the employer unreasonably fails to follow it. 

The Information Commissioner’s Office is in the process of consulting on monitoring at work and information about workers’ health, with the consultations due to close this month. HR teams should keep watch on any changes made to the ICO’s guidance following the consultation process.

There will be an extra bank holiday on 8 May 2023 to mark the Coronation of King Charles III. Whether workers will be entitled to take this extra day off will depend on the wording of their contracts.

The Retained EU Law (Revocation and Reform) Bill has the potential to have a significant impact on employment law. The Bill provides that EU-derived secondary legislation and retained direct EU legislation will expire on 31 December 2023 unless this date is extended (which the latest commentary suggests might happen) or the legislation is otherwise expressly kept by ministerial order. This would include many regulations that impact employment practices, such as the Transfer of Undertakings (Protection of Employment) Regulations 2006, the Working Time Regulations 1998, the Agency Worker Regulations 2010 and the Fixed Term Employee Regulations 2002. The Bill would also end the supremacy of EU law and make it easier for Courts and Tribunals to depart from existing EU-derived domestic case law. HR teams will need to closely monitor progress of the Bill and any proposed repeal, amendment or preservation of those regulations impacting employment law. Shoosmiths will, of course, provide you with regular updates on the key developments so watch this space!

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