KNOWLEDGE

Employment law reform timeline

Morton Fraser Partner Innes Clark
Author
Innes Clark
Partner
PUBLISHED:
04 January 2023
Audience:
Business
category:
Blog

This blog sets out the key legislative and case law decisions expected in 2023 and beyond and will be regularly updated throughout the year.

 

EARLY 2023

Statutory code on dismissal and re-engagement

In the wake of significant publicity surrounding large employers using controversial "fire and re-hire" strategies to alter the terms and conditions of their workers, the Draft Code of Practice on Dismissal and Re-engagement was published on 24 January 2023.  The Code aims to set out good industrial practice when terms and conditions need altered, and when in force employment tribunals will take it into account when considering relevant claims.  Any employer being found to unreasonably fail to comply with it risks an uplift of 25% being made to compensation.

Paid holiday entitlement

The UK Government issued a consultation paper addressing the issues arising from the 2022 Supreme Court judgment in Harper Trust v Brazel in January 2023.  The judgment created a disparity where part-year workers are entitled to more paid holiday than part-time workers who work the same hours but spread over the whole year.  The consultation seeks to address this by amending the way entitlement is calculated and is looking for views on the implications this change may have on different sectors.  The consultation closes on 9 March 2023.

SPRING 2023

National living and national minimum wage

1 April will see the changes to national living and national minimum wage taking effect.  As of that date the new rates will be:-

  • NLW will increase from £9.50 to £10.42 per hour (for those aged 23 and over)
  • NMW 21 to 22 year old rate will increase from £9.18 to £10.18 per hour
  • NMW 18 to 20 year old rate will increase from £6.83 to £7.49 per hour
  • NMW 16 & 17 year old rate will increase from £4.81 to £5.28 per hour
  • NMW apprentices rate will increase from £4.81 to £5.28 per hour

Statutory benefits

Statutory sick pay will increase from £99.35 to £109.40 per week.  Statutory maternity, paternity, shared parental and adoption pay will increase from £156.66 to £172.48 per week. 

Tribunal compensation

The annual Employment Tribunal award limit changes will take effect on 6 April.  For cases involving dismissals, the figures will apply where the effective date of termination falls on or after 6 April 2023.  The current limit on the compensatory award for unfair dismissal is £93,878.  Currently the limit on a week's pay (used for calculating statutory redundancy payments and the basic award for unfair dismissal) is £571 meaning the maximum basic award and maximum statutory redundancy payment is £17,130.   The increases to take effect in April have not yet been announced.

Guidelines for injury to feelings awards

An award for injury to feelings is made to compensate for injury to feelings caused by discrimination. The award is separate from an award to compensate for financial loss and can be made even where no financial loss has been suffered.  To assist Employment Tribunals, the Court of Appeal previously set out guidance for quantifying awards for injury to feelings, known as the Vento bands. For claims presented on or after 6 April 2022 the bands are as follows:-

  • Lower band (less serious cases) - £990 to £9,900 
  • Middle band (for cases that do not merit an award in the upper band) - £9,900 to £29,600
  • Upper band (for most serious cases) - £29,600 to £49,300

Awards of more than £49,300 will only be made in the most exceptional of cases.

The bands that will apply to claims presented on or after 6 April 2023 are still to be announced.

Gender pay gap reporting

30 March will see the gender pay gap reporting deadline for public sector employers (using 31 March 2022 as a snapshot date).

4 April will see the gender pay gap reporting deadline for private companies and voluntary organisations with 250 or more staff.  The snapshot date of 5 April 2022 means that for the first time since 2020 furlough will not impact on the figures. 

LATER IN 2023 AND BEYOND

Rights originally proposed in the Employment Bill

Many of the rights originally introduced as part of the Employment Bill are now proceeding as UK Government backed Private Members' Bills.  They will all have a second reading in Parliament in or around February 2023.  It is expected they will continue their passage through Parliament during the course of 2023 although may not come into force until 2024.  The Private Members Bills' are:-

  • Neonatal Care (Leave and Pay) Bill - this will introduce a right to up to 12 weeks of leave for parents of children receiving neonatal care.  The leave will be paid if parents meet qualifying criteria;
  • Carer's Leave Bill - this will introduce a flexible entitlement to one week's paid leave for employees providing or arranging care for a dependent with a long term care need;
  • Protection from Redundancy (Pregnancy and Family Leave) Bill - this will extend the protected period during which employees on maternity leave must be offered alternative employment (in the event that their role is redundant) from the date that they advise their employer that they are pregnant to 18 months after the birth;
  • Employment (Allocation of Tips) Bill - this will require employers to allocate tips, gratuities and service charges to workers without deductions.

While a Private Members' Bill covering the right to request a more predictable contract has had a first reading in Parliament, it is not backed by the UK Government and is unlikely to progress.  The UK Government has confirmed that they still intend to proceed with a new single enforcement body for employment rights but there is currently no timescale for when that will happen.

For more detail on all of these Private Members Bills' see - Whatever happened to the Employment Bill?.

Employer duty to prevent sexual harassment in the workplace

Another Private Members' Bill that has received UK Government backing is the Worker Protection (Amendment of Equality Act 2010) Bill.  The bill will introduce a duty on employers to take all reasonable steps to prevent employees carrying out acts of sexual harassment.  It will also re-instate the potential for an employer to have liability for harassment by a third party. 

The Transport Strikes (Minimum Service Levels) Bill

Vehemently opposed by the unions, this Bill makes provision for minimum service levels during strike action relating to transport services.  If enacted, transport sector employees and unions would be subject to a duty to take reasonable steps to agree binding minimum service agreements.  If no agreement can be reached the Central Arbitration Committee would have powers to impose a minimum service determination.  Failure to take reasonable steps by the union to comply with the minimum service requirements could result in the employer obtaining interim injunction/interdict preventing the strike and leaving the union open to significant financial penalties. It remains to be seen whether this will ever come into force.

The Retained EU Law (Revocation and Reform) Bill 2022

As well as workers gaining new rights in 2023 there is the potential for a number of existing protections to fall away by virtue of the Retained EU Law (Revocation and Reform) Bill 2022.  Introduced by the short lived Truss Government, under the bill any retained EU law not expressly preserved and assimilated into domestic law will automatically expire by 31 December 2023, although this period may be extended to 23 June 2026.  Employment legislation that is most likely to be affected includes protections under TUPE and the Working Time Regulations as well as those relating to agency workers, part-time workers and fixed-term employees.

Misuse of non-disclosure agreements

"When parliamentary time allows" is the timescale for implementation of legislation to curb the use of Non-Disclosure Agreements (NDAs) in employment contracts and settlement agreements.  The UK Government's response confirmed legislation will ensure:-

  • Confidentiality clauses cannot prevent disclosures to police, regulated health and care professionals or legal professionals;
  • The limitations of the clause are clear to those signing them; and
  • Improved independent legal advice is available to those signing a settlement agreement.

Guidance on drafting requirements will also be introduced as will new enforcement measures for confidentially clauses that do not comply with legal requirements.

Modern slavery

A UK Government response to the consultation on Transparency in supply chains, which proposed changes to the Modern Slavery Act, was published in September 2020.  Amongst a number of other proposals, the Government response includes legislating on the content of statements, introducing a single reporting deadline (30 September each year) and requiring organisations to publish their statements on a UK Government website.  The legislative changes will be made when parliamentary time allows.

Data protection - Employment practices guidance

The Information Commissioner's Office had, by the end of 2022, issued two consultations on topic specific guidance on employment practices and data protection.  Drafts of the different topic areas are being released in stages.  Updated, more user friendly, online resources with topic-specific areas should be the outcome, hopefully later in 2023.

OTHER FUTURE DEVELOPMENTS

We also have something of a backlog of measures that have been proposed, consulted on, or confirmed but without any timescale for implementation.  These include:-

Consultation on workplace disability reporting

A consultation on disability workforce reporting closed in April 2022.  The consultation explored disability workforce reporting for larger employers with 250 or more employees.  It looked at both mandatory and voluntary reporting. The focus of the mandatory reporting was data showing the proportion of employees in a workforce that identify as disabled but respondents were also asked what, if any, other statistics could be reported alongside or instead of this.  The results of the consultation are still being analysed and the UK Government's response is awaited.

Reform of post-termination non-compete clauses

This consultation, seeking views on proposals to either limit or prevent the use of post-termination non-compete clauses, closed on 26 February 2021. The UK Government's response to the consultation is still awaited.

Extending the gap in employment required to break continuity

At present only 1 week is required to break continuity of employment and it has been proposed that this will be extended to 4 weeks. This measure was announced as part of the Good Work Plan, as was an intention to improve guidance on how the law treats temporary cessations of work. However, there have been no further developments since then and no timescale for implementation is known.

Senior Managers and Certification Regime (SMCR)

In early December the UK Government announced a review of the SMCR.  It remains to be seen what this will entail but the UK Government's call for evidence focuses on the effectiveness, scope and proportionality of the SMCR and seeks views on potential improvements and reforms. 

KEY CASES FOR 2023

Where we have covered these cases in the past, more details on the facts and the judgments that have been appealed can be obtained by clicking on the links below.

In 2023 we will see the judgment in the case of Chief Constable of the Police Service of Northern Ireland and another v Agnew and others being handed down.  The case was heard in December 2022 by the Supreme Court.  It is an appeal against the judgment of the Northern Irish Court of Appeal that a "series" of unlawful deductions from holiday pay would not be interrupted by gaps of more than three months.  Our commentary on the impact the Northern Irish Court of Appeal judgment may have on claims made in Scotland, England and Wales is available here.

There are also a number of high profile cases due to be heard in 2023, most notably:-

Fentem v Outform EMEA Ltd - this case is due to be heard in the Court of Appeal on 31 January or 1 February 2023.  It concerns whether the use of a PILON following a resignation only alters the date of resignation taking effect, or whether it turns the resignation into a dismissal.  Our summary of the EAT judgment is available here.

Associated Unions v Secretary of State for Business, Energy and Industrial Strategy is expected to be heard in March 2023.  It is a judicial review of the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022 which came into effect in autumn 2022.  The Regulations allow agency workers to fill in for striking workers.

Although we will need to wait until December 2023 for it to be heard (and therefore 2024 for the judgment), Kocur v Angard Staffing Solutions Ltd will progress to the Supreme Court.  The Court will hear an appeal against the Court of Appeal judgment that the right under the Agency Workers Regulations 2010 for agency workers to be notified of vacancies with the hirer does not imply a right to apply for any of those jobs.  Our summary of the Court of Appeal judgment is available here.

Hope v British Medical Association is due to be heard by the Court of Appeal on a date yet to be fixed.  It is an appeal against a finding that a claimant was fairly dismissed for bringing numerous vexatious grievances and then refusing to attend a grievance hearing.  Our summary of the EAT judgment is available here.

HMRC v Professional Game Match Officials Ltd ("PGMOL") is a tax case, but of some interest due to its subject being that of employment status.  The Supreme Court will hear the case on 26 & 27 June 2023, which is an appeal against a decision that certain football referees were not employees of PGMOL.

Confirmation of whether permission has been granted to appeal to the Court of Appeal in Mackereth v Department for Work and Pensions and another is awaited.  In 2022, the EAT held that the claimants belief that a person cannot change their gender was capable of protection under the Equality Act 2010, although the dismissal for refusing to use a trans person's chosen pronouns was not discriminatory.

A date is awaited for an appeal to the EAT in the case of Higgs v Farmor's School.  The case concerns an Employment Tribunal's judgment that a Christian employee's beliefs that gender cannot be fluid and that an individual cannot change their biological sex or gender were worthy of respect in a democratic society and could therefore be a protected belief under the Equality Act 2010.  An appeal to the EAT has also been lodged in the case of Bailey v Stonewall Equality Ltd and others against a Tribunal's judgment that the claimant was both discriminated against and victimised because of her gender critical philosophical belief.

Although we do not usually highlight cases that are yet to be heard by an Employment Tribunal, the case of Manjang v Uber Eats UK Ltd and others and Raja v Uber are likely to receive significant press coverage.  Both of these cases allege that Uber's use of a facial recognition system to verify the identify of drivers is indirectly racially discriminatory.  Both claimants are being supported by their unions.

Disclaimer

The content of this webpage is for information only and is not intended to be construed as legal advice and should not be treated as a substitute for specific advice. Morton Fraser LLP accepts no responsibility for the content of any third party website to which this webpage refers.  Morton Fraser LLP is authorised and regulated by the Financial Conduct Authority.