2023: Changes ahead for UK workplace law

We explore the key employment law developments which we think will impact businesses in the UK in the coming months.

For our selection of key issues which we believe will be significant for HR during 2023, see our update, Top 5 issues for HR in 2023.

Employment law reforms

There are a number of Bills progressing through Parliament which may become law in 2023, and HR are advised to keep track of the progress of these Bills.

Retained EU law

The Brexit Freedoms Bill includes provisions which allow certain retained EU law to be saved (by being reinstated) replaced or scrapped altogether by 31 December 2023. Significantly, the Bill includes a clause which means that, at the end of 2023, what’s left of certain retained EU law will simply disappear. Although this deadline can be extended to June 2026, the government must positively decide which laws this applies to, otherwise they will fall away. As yet, the government has given little indication as to what employment laws it wishes to keep, replace or scrap, so we simply don’t know yet precisely how the Bill will affect UK employment law. 

Private Members Bills replace the long-awaited Employment Bill

Although no progress has been made with the Employment Bill, some of the provisions expected in it are contained in Private Members’ Bills which the government is supporting. These Bills are making their way through the various stages of the legislative process - once again it isn’t yet known when they will come into force.

Flexible working requests

Proposed reforms to making flexible working requests are set out in the Employment Relations (Flexible Working) Bill and the government's response to the consultation, which include:

• the right to request flexible working will become a day one right
• employees will be allowed to make two requests within a 12-month period, and the time employers have to respond will reduce from three to two months
• if rejecting a request, the employer will have a duty to discuss alternatives to the request

What should HR do? Consider whether to introduce any of the proposals such as a day one right before any legislation is implemented if you think this will provide you with a competitive advantage in the market in the war for talent.

Sexual harassment

The Worker Protection (Amendment of Equality Act 2010) Bill is designed to encourage employers to prevent sexual harassment in the workplace, by:

• creating employer liability for harassment of their employees by third parties
• introducing a new duty on employers to take all reasonable steps to prevent sexual harassment of their employees in the course of their employment
• providing that the new duty will be enforceable by an employment tribunal where it has first upheld a claim for sexual harassment
• providing for a discretionary compensation uplift of up to 25% for breach of the employer duty in sexual harassment cases

What should HR do? Review the EHRC technical guidance on sexual harassment (already published) - and prevent and tackle harassment by using the guidance to update and revise your own strategy (including policies and procedures) so it will withstand future scrutiny.

Family friendly

The Protection from Redundancy (Pregnancy and Family Leave) Bill will extend redundancy protection to include pregnant women and new parents returning from family leave.

What should HR do? Review and where applicable change your policies to comply with the new law.

The Neonatal Care (Leave and Pay) Bill provides for additional paid leave to parents whose babies require specialist care after birth, and the Carer’s Leave Bill will introduce a new entitlement of one week's unpaid leave per year for employees providing or arranging care.

What should HR do? As it seems likely that these family friendly rights will be introduced, consider introducing these rights in your policies before the legislation is implemented.

Guidance, reports and consultation outcomes

Additional developments HR should watch out for are:

Diversity and inclusion

• Ethnicity pay gap reporting guidance and support for employers carrying out voluntary pay reporting was due to be published in summer 2022 and is now expected in 2023. There will be a process for voluntary ethnicity pay gap reporting - so those organisations that choose to publish ethnicity pay figures will be required to publish a diagnosis and action plan, setting out the reasons why any disparities exist and what will be done to address them.
• The government response to disability workforce reporting consultation, due in summer 2022, is still awaited.

What should HR do? To get ahead with diversity pay / workforce reporting, HR should consider starting the process of collecting diversity data, ahead of the government guidance and response being published.

Data protection

ICO consultations on the draft guidance on monitoring at work and draft guidance on information about workers’ health will close in January 2023. It is anticipated that these will be published during 2023.

What should HR do? Review and update policies to comply with any changes.

Hybrid and remote working

The Office of Tax Simplification (OTS) recently published a report of the findings from its review of hybrid and distance working suggesting that the large-scale move to UK based hybrid working presents an opportunity, and possibly need, for tax policy changes to the benefits and expenses rules, for instance home to office travel. Note that the OTS will not undertake any further work given the impending closure of the OTS.

What should HR do? Review the OTS report; look out for any proposals to change the benefits and expenses rules, and for new guidance on hybrid working and associated tax issues.

Non-compete clauses

The government response to the 2020 consultation on non-compete clauses is still awaited.

What should HR do? Ensure that employment contracts are updated in due course, if needed.

Hire and re-hire

A draft Statutory Code of Practice on dismissal and re-engagement is expected shortly.

What should HR do? Familiarise themselves with the law around hire and rehire as a last resort method for changing terms and conditions.

Employment law cases

Some significant employment tribunal and appeal hearings and decisions are expected in 2023, including:

Holiday pay – Overtime pay and series of deductions

In Chief Constable of the Police Service of Northern Ireland and another v Agnew, in an appeal from the Northern Ireland Court of Appeal, the Supreme Court will decide what is meant by a series of unlawful deductions and whether a gap of three or more months between underpayments of holiday pay will break such a series (amongst other issues). The Supreme Court’s findings could have a significant impact on how far back claims for unlawful deductions of holiday pay can go, although there is a two-year cap on such claims in England, Wales and Scotland. The appeal hearing took place on 14 / 15 December 2022.

Religious and philosophical belief discrimination – Transgender and chosen pronouns

In Mackereth v Department for Work and Pensions, a Christian doctor is seeking permission to appeal the Employment Appeal Tribunal's decision that he wasn’t subjected to discrimination on the grounds of religion or belief when he was dismissed for refusing to address transgender patients by their chosen pronoun.

Race discrimination – Artificial intelligence

Two separate claims, supported by two unions, have been brought alleging that Uber's decision to use a facial recognition system to verify the identity of their drivers indirectly discriminates on the ground of race. Manjang v Uber Eats UK Ltd.

Industrial relations – Agency workers

The High Court has granted permission for 11 trade unions to launch a legal challenge against regulations allowing agency workers to fill in for striking workers. The case is expected to be heard in March 2023.

Employment contracts – Duty of care

The Court of Appeal’s decision is awaited in Benyatov v Credit Suisse Securities (Europe) Ltd. The High Court dismissed Mr Benyatov’s claim for career loss earnings - brought after the former investment banker’s criminal conviction by a Romanian court in connection with a transaction he worked on - that Credit Suisse had breached a duty of care to protect him from criminal conviction in the performance of his duties and the implied duty to indemnify.