Below is a summary of some of the changes to be expected in the coming months. Despite the fact that we have now entered into 2023, there is still a huge degree of uncertainty around what changes this year will bring to Employment Law.
The Retained EU Law (Revocation and Reform) Bill
This Bill is one of the more controversial ones to have been proposed as it seeks to abolish all EU Law that has not been specifically reinstated or replaced by Parliament by the end of 2023. This leaves a number of EU derived secondary legislation vulnerable, including the Working Time Regulations, TUPE and Agency Worker Regulations. Case law from EU courts will no longer have jurisdiction in the UK creating a new and uncertain landscape for Tribunals moving forward.
There are concerns as to whether the short deadline imposed by Parliament to reform these laws is achievable but there is provision for the deadline to be extended to the end of June 2026. Whilst the Bill has not been passed by Parliament, Employers will need to keep up to date on its progress for if it is passed, there is likely to be a significant impact on employment legislation.
The Employment Relations (Flexible Working) Act 2023
This Bill was passed in October 2022 and has passed its way through Parliament, now awaiting Royal Assent. Employees will now be able to make two flexible working requests in a 12-month period, rather than once. However, it is not a day 1 right. Employees will still need to have completed their 26 week qualifying period to make such a request. The government has indicated that making it a day 1 right to request flexible working will happen through secondary legislation but there is no sign of this yet.
Employers will need to respond to the request within 2 months of it being made, unless an extension is agreed, and engage in consultation with the employee. There is no guidance as to what level of consultation is required but this will undoubtedly develop overtime. Employees will no longer need to set out in their application the effect flexible working may have on the business and how it should be dealt with. The onus is on the employer to demonstrate why the request is not suitable.
Employers need to ensure their policies and procedures around flexible working are up to date to accommodate the change in legislation.
Protection from Redundancy (Pregnancy and Family Leave) Act 2023
Currently employers initiating redundancy procedures, must offer a suitable vacancy (if available) to an employee on maternity, shared parental or adoption leave ahead of others who may be at risk. This Act extends this protection from redundancy to pregnant women and parents returning to work from a relevant period of leave. It protects new parents and expectant mothers from workplace discrimination by offering greater job security at an important and vulnerable stage in their lives. This will come into force on 24 July 2023 so care will need to be taken by employers undertaking redundancy consultations.
Statutory Maternity, Adoption, Paternity, Shared Parental and Sick Pay
Statutory Maternity, adoption, paternity and shared parental pay rose from £156.66 to £172.48 a week. Statutory Sick Pay also rose, from £99.35 to £109.40 per week.
National Living/Minimum Wage Increase
There are wage increases year on year, and with the rising cost of living, it is important employers are aware of the statutory increases. The increase took effect from April 2023 as follows:
- Workers aged 23 and over increase by 92p (9.7%) to £10.42 an hour (National Living Wage)
- Workers aged 21-22 an increase of £1 (10.9%) to £10.18 an hour (national minimum wage)
- Development rate for workers aged 18-20 an increase of 66p (9.7%) to £7.49 an hour
- Young Workers rate for workers aged 16-17 increase of 47p (9.7%) to £5.28 an hour
- Apprentice Rates increase by 47p to £5.28 an hour
These increases may mean significant additional costs to some employers and will need to be planned for in advance of April.
Employment (Allocation of Tips) Act 2023
This received Royal Assent in May 2023, with implementation expect at some point in 2024.
The Act will see business unable to hold back service charge from their workers, and to fairly allocate tips between workers. A Code of Practice will be published in due course so the practicalities around ‘fair allocation’ are not yet known.
Employers will however be required to have a written policy in place on how it will deal with tips and also keep records of all tips and service charges received for three years. Guidance on how the policy and how to manage this will likely come with the Code of Practice.
This change is set to benefit more than 2 million workers across the hospitality, leisure and service sectors who tend to rely on tips to top up their salary with the rise in inflation and increase to cost of living. It is estimated this change to legislation will see over £200 million a year put back into the pockets of the workers.
A final change from 2022
At the end of 2022, a ban on exclusivity clauses in contracts came into force, extending the ban for those on zero hours contracts, to include those earning less than the lower earnings limit of £123 per week for the 2022-23 tax year. Those falling within this criterion cannot be restricted from taking additional work with another employer and are only enforceable if designed to protect a legitimate business interest. This coupled with the allocation of tips will seek to provide greater earning opportunities for those on low incomes.
The Government has also announced its intention to limit the restriction on non-competes in restrictive covenants to three months. It does not appear as though the law will affect non-solicitation clauses or confidentiality clauses.
If you wish to have greater details regarding any of the point set out within this article, please speak to a member of our team today.