Employment law: what to expect in 2023

2023 is here and there’s lots on the horizon in the employment law world. We round-up 10 developments that might shape the employment law landscape this year and beyond.

1. Retained EU Law

The Retained EU Law (Revocation and Reform) Bill could result in the most significant shake-up of employment law in a generation (or could turn out to be a damp squib). If brought into law, all retained EU law must be expressly transferred into UK law by 31 December 2023, or it will cease to be law in the UK. The Government may yet extend the deadline for implementation to 23 June 2026, the 10-year anniversary of Brexit. Little is known about the Government’s intentions for employment-related law. This could impact familiar legislation such as the Working Time Regulations 1998, the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), and Agency Worker Regulations. For more detail, please refer to Amy Wren’s blog here.

2. Flexible working

The Government has recently published its consultation response on “Making Flexible Working the Default”, giving its support to the Employment Relations (Flexible Working) Bill. Amongst other things, the Government supports the following measures: giving workers the right to request flexible working from day one of employment, removing the present 26-week qualifying period; requiring employers to consult with their employees before rejecting their flexible working request; allowing employees to make two flexible working requests per year; and requiring employers to respond within two months. For more information, see our blog Flexible working: a day one “right to request, not a right to have”.

3. Family leave and pay

The long-anticipated Employment Bill first mentioned in December 2019 appears to have dropped off the Government’s agenda. Instead, elements of the original Bill are found in several Private Members’ Bills which have received Government backing:

• The Protection from Redundancy (Pregnancy and Family Leave) Bill extends the rights of protection from redundancy for women during or after a protected period of pregnancy. It is thought this will cover the moment they inform their employer in writing of their pregnancy to six months after they have returned from maternity leave. Enhanced protection is also proposed following a return to work after shared parental leave and adoption leave.
• The Carer’s Leave Bill entitles employees who are providing or arranging care to one week’s unpaid leave per year and protection from dismissal or detriment as a result of having taken time off.
• The Neonatal Care (Leave and Pay) Bill provides parents with a new right to paid time off if their baby requires neonatal care.

It is also expected that the Miscarriage Leave Bill and the Fertility Treatment (Employment Rights) Bill will progress, providing a right to paid bereavement leave and paid time off for fertility treatment respectively.

4. Protection from harassment

The Worker Protection (Amendment of Equality Act 2010) Bill includes a new proactive duty on employers to take reasonable steps to prevent sexual harassment of their employees and makes employers liable for harassment of their employees by third parties. More detail of how employers can prepare for the implementation of this Bill can be found in our blog here.

5. Strikes

The second half of 2022 resulted in strikes across many sectors including rail, mail, and nursing and that pattern continues at the start of 2023. On 5 January 2023, the Government announced proposed strike laws to ensure minimum service levels for fire, ambulance and rail services, with the possibility that other sectors such as health and education could face similar action if they do not reach voluntary agreements. A copy of the draft Bill and information on its progress can be found here. For more information, including on how this might affect schools in particular, see here. 

6. Human Rights

On 22 June 2022, the government introduced the Bill of Rights Bill 2022-23 to Parliament. The Bill aims to repeal the Human Rights Act 1988 and to create a new domestic human rights framework. Although it was shelved by Liz Truss’ government, it is reported that it is back on the agenda and will continue its parliamentary passage in 2023, though the Government has not committed to a parliamentary timetable.

7. “Fire and re-hire”

In light of the mass dismissals involving P&O Ferries, in March 2022 the Government announced that a new Statutory Code on dismissal and re-engagement (so-called “fire and re-hire”) would be published. A draft copy of the Code of Practice was published this week (on 24 January 2023), and the government is consulting on it for 12 weeks until 18 April 2023. The draft Code sets out employers’ responsibilities when seeking to change contractual terms and conditions, including requiring employers to “consult with employees in a fair and transparent way”. It will also allow tribunals to apply an uplift of up to 25 per cent on employee compensation where the code applies and has unreasonably not been followed. The consultation document and information on how to respond can be found here.

8. Data protection

The Government has announced its intention to replace the UK GDPR with a British data protection system in the form of a Data Protection and Digital Information Bill and a further update is expected in 2023. In the meantime, the ICO is currently undertaking two consultations (closing this month), one about monitoring workers and one about processing workers’ health data. These are part of an ongoing project to replace the ICO’s employment code of practice with new guidance to help employers understand their responsibilities under data protection law. The aim is to create a one-stop hub where employers and employees can find answers to their data protection questions.

9. The Future of Work

On 1 September 2022, Matt Warman MP published his response to the Prime Minister’s Future of Work review. He invited the Government to consider four areas in greater detail: artificial intelligence and automation, skills, place and flexibility, and workers’ rights. It is understood that Government departments will now consider the issues he raised in more detail, though no timeline has been proposed.

10. Holiday pay

Hot on the heels of the landmark decision of Harpur Trust v Brazel (for details see our blog here), the Government has launched a consultation on calculating holiday entitlement for part-year and irregular hours workers. In a nutshell, the Government is proposing a reversal of the conclusions reached in Harpur Trust and, if implemented, would permit employers to revert to pro-rating holiday for part-year workers based on a 12.07 per cent method. For further information, see our blog Government consultation on holiday entitlement. 

Another holiday pay claim was also heard in the Supreme Court at the end of last year, and in 2023, we anticipate the outcome of Chief Constable of the Police Service of Northern Ireland v Agnew. This Supreme Court was asked to decide whether historic holiday pay claims can be brought where there are gaps of three months or more between periods of underpayment if the underpayments can be linked to form a series. An employee-friendly ruling could result in employers facing a greater exposure to historic underpaid holiday pay.

With many thanks to Emily Waterhouse, a current trainee in our employment team, for co-authoring this blog.  

If you require further information about anything covered in this blog, please contact Alice Kendle or your usual contact at the firm on +44 (0)20 3375 7000.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, January 2023