Looking ahead to 2023: Employment Law developments

As with 2022, there is hardly any new employment legislation expected in 2023. However, a flurry of Private Members’ Bills introduced last summer cover some key employment law topics such as carer’s leave, neonatal care and flexible working. Some of the Bills have Government support (which is crucial to their progress) and even if the measures are not implemented in 2023, we will at least have a better idea of what the final legislation might look like as the Bills go through the Parliamentary process in the months ahead.

Even though there is an absence of new legislation, staying on top of ongoing case law developments will keep employers busy. There are a number of eagerly anticipated decisions from high profile cases heard in 2022 and some key hearing dates in 2023.

Employment Law Developments:

• Data Protection
• Neonatal Care
• Allocation of Tips
• Carer’s Leave
• Protection from Redundancy
• Worker Protection from Harassment
• Flexible Working
• Non-Disclosure Agreements
• Statutory Rates
• Gender Pay Gap Reporting
• Additional Bank Holiday
• Retained EU Law
• Upcoming Judgments and Hearings in 2023
• Conclusion

JANUARY

Data protection

Thinking about data protection may not be everyone’s preferred start to the new year but important consultations launched by the Information Commissioner’s Office (“ICO”) on monitoring at work and the use of workers’ health data close in January 2023. Both topics already appear in the ICO’s Employment Practices Code the purpose of which is to help employers to comply with UK data protection legislation and to adopt good practice.

In relation to workplace monitoring, the shift from predominantly office working to hybrid and homeworking arrangements has created more ambiguities about how employers may lawfully monitor their workforce. Guidance on “non-traditional” forms of tracking technologies will be welcomed. The ICO issued draft guidance for consultation in October 2022 and is looking for views on the content before 11 January 2023. We can expect the final guidance to address the use of biometric data for monitoring purposes, as well as best practice when employers use third-party providers for monitoring purposes.

In October 2022, the ICO also produced draft guidance on information relating to workers’ health. Health data is “special category data” and there are additional rules that must be followed in processing it. The draft guidance provides details about lawful processing, how to handle sickness and injury records and the issues to consider in relation to medical examinations and testing. The use of health tracking technologies such as health and fitness tracking apps has become more widespread since the pandemic, with some employers keen to be proactive in monitoring the wellbeing and health of their workers. This can potentially be very intrusive however and such a step will need to be justified. The consultation period ends on 26 January 2023.

Neonatal Care (Leave and Pay) Bill 2022-23

This Private Members’ Bill, was introduced on 15 June 2022 and it is supported by the Government. Support from the Government is crucial as this increases the chances of the Bill becoming law. The Bill will introduce two new rights, neonatal care leave and statutory neonatal care pay.

The Bill will allow employees to take up to 12 weeks leave (in addition to other leave such as maternity and paternity leave) to spend more time with their baby at a very stressful time. Neonatal leave will apply to parents of babies who are admitted into hospital up to the age of 28 days, and who have a continuous stay in hospital of 7 full days or more. The right to leave will be a “day one” right, available to all employees.

Neonatal care pay, will be at a prescribed rate. The qualifying criteria is that the employee must have a prescribed parental or other personal relationship with the child, have a minimum of 26 weeks service with their employer and earn more than the lower earnings limit (this remains at £123 from April 2023). It has not been confirmed how much pay those on leave can expect but it is likely to be the same as other statutory family leave pay.

Regulations will need to be passed to implement the new rights which are unlikely to become law in 2023 as the Bill is still going through the Parliamentary process. The next step is the Report stage on 20 January 2023 at the House of Commons when MPs have the chance to discuss the Bill and any amendments.

Do these proposals relating to neonatal leave and pay sound familiar?

They were originally included in the Employment Bill 2019-20 and we mentioned them in our Looking Ahead To 2020 briefing!

Significantly, the Government is now supporting several Private Members’ Bills to bring forward legislation originally set out in the Employment Bill although there is no further information as to when the Employment Bill itself may be progressed.

Employment (Allocation of Tips) Bill 2022-23

The proposals were originally included in the Employment Bill and the purpose of this Private Members’ Bill is to make it unlawful for employers to take a percentage of tips, gratuities and service charges left by customers. They must be allocated to staff without any deductions and the distribution between staff must be fair. The Bill requires employers to have regard to a statutory Code of Practice (which is being developed) when complying with their obligation to allocate tips fairly.

It is suggested that employers will need to keep records of tips etc received and how they are allocated between staff. The records ought to be kept for a minimum period and staff will be able to request the records.

The Report stage of the Bill is on 20 January 2023.

FEBRUARY

Carer’s Leave Bill 2022-23 

This is another Private Members’ Bill which has Government support and carer’s leave also featured previously in the Employment Bill.

The Bill will provide one week of unpaid leave each year for employees (pro-rated for part-time employees) who are either arranging or providing care to dependants. The leave shall be a “day one” right and would be flexible. The week could be taken as five separate days or in one block to suit caring responsibilities. There will be no requirement of proof to show how leave is used or who it will be used for “ensuring a smoother process for both businesses and their employees” said the Government.

Those on carer’s leave will be afforded the same employment protections as other forms of family leave, such as protection from dismissal or detriment resulting from taking the leave. The Report stage is on 3 February 2023.

How effective will the new right be for those with caring responsibilities? It is reported that two thirds of carers use annual leave, often because they cannot afford unpaid time off. As carer’s leave will be unpaid, it may not be a feasible option for many carers especially in the current economic climate. Perhaps more helpful for carers is the extension of the right to request flexible working, see The Employment Relations (Flexible Working) Bill below.

Protection from Redundancy (Pregnancy and Family Leave) Bill 2022-23

This is another Private Members’ Bill which has Government support and the proposals also featured previously in the Employment Bill.

Currently, before making redundancies, employers must offer employees on maternity, adoption or shared parental leave a suitable, alternative role in priority over anyone else who is initially selected for redundancy. If the employer fails to do so, it is an automatically unfair dismissal. The Bill extends this redundancy protection so that it applies to pregnant women as well as new parents returning to work from a relevant form of leave.

The protections will apply for an extended period from when a woman tells her employer she is pregnant until 18 months after the birth. The 18-month window will ensure that a mother returning from a year of maternity leave can receive 6 months additional redundancy protection. This protection will also apply to parents who have taken adoption or shared parental leave up to 18 months after the child’s adoption or birth.

The Report stage is on 3 February 2023.

The Worker Protection (Amendment of Equality Act 2010) Bill 2022-23

As mentioned in our Employment Top Ten of 2022, allegations of sexual harassment occur across all types of organisations and sectors. The Government has already confirmed that it will introduce a duty on employers to prevent sexual harassment to make workplaces safer and it will support the Equality and Human Rights Commission (EHRC) in developing a statutory Code of Practice.

The Government is also supporting this Private Members’ Bill which was introduced on 15 June 2022. Its provisions include making employers liable for third-party harassment of their employees, introducing a duty on employers to take all reasonable steps to prevent sexual harassment of their employees and providing for a compensation uplift in those cases where there has been a breach of that duty.

The Report stage is on 3 February 2023.

Interestingly, on 7 March 2022, the Government ratified the International Labour Organisation (ILO) Violence and Harassment Convention. This is the first international treaty to recognise the right to a workplace free from violence and harassment including based on gender. As the Government stated, “this Convention is an opportunity to shape a future of work based on dignity and respect for all “. The Convention will come into force on 7 March 2023 but it will not provide any directly enforceable rights in the domestic courts.

The Employment Relations (Flexible Working) Bill 2022-23

The Conservative Party 2019 manifesto pledged to “encourage flexible working and consult on making flexible working the default unless employers have good reasons not to”. An extension of the right to request flexible working was included in the Employment Bill but there was relatively little progress. However, this Private Members’ Bill was introduced on 15 June 2022 and on 28 October 2022, the Government confirmed that it will be supporting the Bill.

The Bill’s proposals include allowing up to two requests a year rather than just one, and the period for dealing with requests to be reduced to two months from three months.

The Report stage is on 24 February 2023.

Significantly, on 5 December 2022, the Government issued its response to the consultation exercise on flexible working. A key announcement was that the right to request flexible working will be a “day one” right, currently 26 weeks’ service is needed. Consistent with the Bill, it announced that two requests a year will be permitted and the time period for dealing with requests will be two months. In addition, employees will no longer be required to specify how the employer might deal with the effects of the flexible working request. However, there is no timetable as to when these changes will take effect.

MARCH

Non-Disclosure Agreements Bill 2022-23

This is a Private Members’ Bill to make provision about the content and use of non-disclosure agreements and for connected purposes. There are no publications for this Bill yet which often happens in the early stages.

The second reading debate is scheduled to take place on 17 March 2023.

APRIL

Increase in Statutory Rates

From 1 April 2023, the National Living Wage (payable to workers aged 23 and over) and the National Minimum Wage will increase as follows for workers:

• Aged 23 and over from £9.50 to £10.42 an hour
• Aged 21-22 from £9.18 to £10.18
• Aged 18-20 from £6.83 to £7.49
• Aged 16-17 from £4.81 to £5.28

The Apprentice rate increases from £4.81 to £5.28

The increase in the National Living Wage rate to £10.42 represents an increase of 9.7%.

From 2 April 2023:

• The weekly rate of statutory maternity, adoption, paternity, shared parental and parental bereavement leave pay will increase from £156.66 to £172.48 or 90% of the employee’s average weekly earnings if this is less than the statutory rate.

From 6 April 2023:

• The weekly rate for statutory sick pay will increase from £99.35 a week to £109.40

The minimum weekly earnings threshold remains at £123 per week.

At this stage, we do not have the details of the new limits on statutory redundancy pay and Employment Tribunal awards which are expected to come into force in April 2023. Statutory redundancy pay is calculated taking into account length of service, the employee’s age and weekly pay which is subject to a statutory cap, currently £571.

Gender Pay Gap Reporting

Gender pay gap calculations are based on payroll data on the “snapshot date”.

For current reporting requirements in the private and voluntary sector, the “snapshot date” is 5 April 2022 and the deadline for reporting and publishing is 4 April 2023.

For the public sector, the “snapshot date” is 31 March 2022 and the deadline for reporting and publishing is 30 March 2023.

ONS statistics published on 26 October 2022, showed that among full-time employees the gender pay gap in April 2022 was 8.3% and it was 7.7% in 2021 and 9.0% in 2019. There remains a large difference in the gender pay gap between employees aged over 40 and those under 40 years (which has a smaller gap). However, the ONS recommends looking at the longer-term trend because of the impact of the pandemic and furlough scheme on gender pay.

MAY

Additional Bank Holiday

The Government has announced an additional bank holiday to mark the coronation of King Charles III next year. The UK-wide bank holiday will take place on Monday 8 May 2023.

As with the additional bank holiday in 2022, employers are likely to face an increased number of requests for holidays around this time with many employees wanting to take advantage of the four-day weekend by adding some extra days of annual leave. Employers will need to ensure that they have in place a clear and consistent procedure for dealing with holiday requests. They will also need to plan well in advance for potential staffing issues.

Employers should also look at their organisations’ contracts of employment as these are likely to determine how they approach the additional bank holiday of 8 May 2023. For example, the contract may state that employees’ annual leave entitlement includes “all bank and public holidays” or it may specify “8 days of bank and public holidays”. If the latter, employers will then need to decide whether or not to give the additional bank holiday and prepare accordingly.

DECEMBER

The Retained EU Law (Revocation and Reform) Bill 2022-23

The Bill featured at number one in our recent Employment Law Top Ten of 2022.

Just to recap, the Bill was introduced to the House of Commons on 22 September 2022. Its purpose is to end the status of retained EU law from 31 December 2023 unless it has been preserved before that date or the sunset provision has been triggered to extend the deadline to 23 June 2026.

Many of the UK’s key employment rights derive from EU law including rights in relation to working time, part-time workers, agency workers, fixed term employees and TUPE. A range of organisations including the CIPD, Institute of Directors and TUC have expressed their concern at the confusion and disruption for businesses that revoking EU laws and legal principles would cause. It was recently reported that there are in fact around 4,000 pieces of legislation that need to be reviewed rather than 2,400 and it was also reported that Members of the House of Lords have warned that there is no chance of the Bill passing by the end of the year.

There is no doubt that the Bill will be one of the most high-profile issues of 2023.

UPCOMING JUDGMENTS AND HEARINGS

We are still waiting for a number of important judgments from the Supreme Court and Court of Appeal relating to appeals heard in 2022.

Kocur v Angard Staffing Solutions Ltd

Mr Kocur was an agency worker and brought a claim under Regulation 13(1) of the Agency Worker Regulations 2010 on the basis that he could only apply for vacancies that were advertised externally. He was informed by the hirer that he was ineligible to apply for internal vacancies that were available to directly recruited employees.

In the Employment Tribunal, Mr Kocur was successful in five complaints made, which included the Regulation 13 complaint. Both parties appealed.

The EAT held that Regulation 13 does not provide agency workers with the right to apply and be considered for internal vacancies. The Court of Appeal agreed with the EAT and dismissed the appeal. It held that the Temporary Agency Workers Directive (from which the Agency Worker Regulations derive) merely provided a limited right to information. It concluded that if Parliament intended to provide a right to apply, it would have explicitly outlined the right in the legislation. Regulation 13 does not extend to the right to apply and be considered for internal vacancies on the same terms as directly recruited employees.

Mr Kocur appealed to the Supreme Court and the case was listed for hearing on 7 December 2022. We eagerly await the judgment which will confirm the scope of the rights conferred on agency workers.

Chief Constable of Northern Ireland v Agnew

Over 3,300 police officers and 364 civilian employees brought claims for unlawful deductions under the Employment Rights (Northern Ireland) Order 1996 (ERO) and claims for underpayment of holiday pay under the Working Time Regulations (Northern Ireland) 1998 (“WTR”). The case was brought by Unison on behalf of Mr Agnew, an employee of the Police Service of Northern Ireland (“PSNI”). Mr Agnew had been paid basic pay on annual leave instead of the normal pay he was entitled to including overtime.

Note that in Bear Scotland v Fulton, the EAT (2014) stated that any claims for historical backpay back to 1998 would not succeed where there had been a gap of three months or more between holiday underpayments.

An industrial tribunal upheld Mr Agnew’s claim going back to 23 November 1998. The PSNI appealed. The Northern Ireland Court of Appeal dismissed the appeal and ruled that a three-month gap in unlawful deductions will not necessarily break a series of deductions. This meant the employees collectively were owed approximately £30 million.

The PSNI appealed and the Supreme Court heard the case between 14 and 15 December 2022. The Supreme Court decision will provide further clarification on an important aspect of the complex holiday pay litigation.

Looking ahead to future hearings in the early part of 2023, there is the highly significant judicial review of the Regulations permitting the supply of agency workers to replace striking workers as well as a couple of interesting pandemic-related appeals.

Associated Unions v Secretary of State for Business, Energy and Industrial Strategy

In 2022 we saw industrial action across many sectors including health, education and transport. Attracting considerable publicity will be the judicial review of the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022. The Regulations came into effect on 21 July 2022 and permit the supply of agency workers during strike action to replace striking workers.

On 14 December 2022, the High Court granted permission for a judicial review of the Regulations. The proceedings have been brought by 11 trade unions (from a wide range of sectors) combined under the TUC and separate challenges brought by NASUWT and Unison. They allege that the Regulations are unlawful as the Secretary of State for Business, Energy and Industrial Strategy failed to consult the trade unions, which is required under the Employment Agencies Act 1973. Further, the trade unions argue that the Regulations contravene Article 11 of the European Convention on Human Rights, the right to freedom of assembly and association.

The TUC’s view is that the Regulations undermine the fundamental right to strike and could potentially endanger the public if inexperienced agency staff are required to fill safety critical roles.

The judicial review will be heard from late March 2023 onwards.

Accattatis v Fortuna Group (London) Ltd

Throughout March and April 2020, Mr Accattatis repeatedly asked to work from home or be placed on furlough as he was uncomfortable using public transport and working in the office. His employer explained that his job could not be done from home because of specific software that he needed and furlough was not possible because the business was so busy (it sold and distributed PPE).

All staff were told that they could take holiday or unpaid leave if they wanted to self-isolate and not come into work. Following his dismissal, Mr Accattatis brought a claim alleging that his dismissal was automatically unfair under section 100(1)(e) Employment Rights Act 1996 (ERA) as he had been dismissed for taking steps to protect himself from danger.

The Employment Tribunal dismissed the claim. The demands to work from home (on full pay) or be furloughed (on 80% pay) were not appropriate steps to protect himself from danger. Mr Accattatis had been offered to take holiday or unpaid leave and had declined.

There is a rule 3(10) hearing at the EAT on 9 February 2023. This arises where an appellant’s Notice of Appeal has previously been rejected and they then request an oral hearing before a judge under rule 3.10 of the EAT Rules.

Mhindurwa v Lovingangels Care Ltd

Ms Mhindurwa was a care worker who was made redundant on 13 July 2020.  She had provided live-in care to a vulnerable person who subsequently moved into a care home. In May 2020, Ms Mhindurwas asked to be furloughed but was told that she could not provide live-in-care any longer because of COVID-19 restrictions and she was subsequently made redundant. Her appeal against dismissal was rejected.

The Employment Tribunal held that although redundancy was a potentially fair reason for dismissal, the dismissal was unfair for two reasons. Firstly, the appeal process was inadequate. Secondly, the availability of the furlough scheme which the employer had not utilised. As the Employment Tribunal judge stated:

“The whole purpose of the furlough scheme was to avoid lay off of employees because of the effect of the COVID -19 pandemic by providing significant Government support to employers.”

The employer’s appeal to the EAT is due to be heard on 20 April 2023.

Union of Shop, Distributive and Allied Workers (USDAW) v Tesco Stores Ltd

The practice of “fire and rehire” or the technical term – dismissal and re-engagement, refers to when an employer dismisses employees and rehires them on new less-favourable terms.

This was the issue in the well-publicised Court of Appeal judgment from 2022. In USDAW,  the Court of Appeal overturned the High Court’s injunction to prevent Tesco from dismissing staff at its warehouses and then re-employing them to remove a pay supplement known as “retained pay”.

Significantly, on 22 December 2022, USDAW was given permission by the Supreme Court to challenge the Court of Appeal decision. There is no hearing date at the moment.

On 3 November 2022, the Government confirmed that a draft statutory Code of Practice on dismissal and re-engagement will be published in the “near future” (although it was originally expected in summer 2022) and representations, including from trade unions, will be considered. ACAS guidance was published in November 2021. Briefly, it says that an employer must first have made all reasonable attempts to reach an agreement on new terms through genuine and meaningful consultation with staff and their representatives. ACAS advised that the practice of fire and rehire is an extreme step that can damage staff morale, productivity, working relations and can also lead to industrial action.

CONCLUSION

The cost of living crisis, high levels of long-COVID and the practical and legal implications arising out of remote and hybrid working were all issues that employers and HR professionals dealt with in 2022 and they will continue to bring many challenges in 2023.

In addition to the developments outlined above, there are some key topics employers need to address and other developments to be aware of:

• Concerns about employees’ poor mental health and how to support staff, especially when working remotely, will continue to be a priority for many employers. The CIPD Health and Wellbeing at Work Report 2022 found that stress continues to be one of the main causes of both short and long-term absence with workloads being the most common cause of stress at work. Employers should ensure that sources of support such as employee assistance and counselling helplines are publicised as well as the details of any mental health first aiders.
• Menopause was very high profile in 2022 and this is unlikely to change in 2023. The physical and psychological impact can vary in severity and can have a huge effect on an individual’s day-to-day activities and ability to perform as usual in the workplace. Extensive research was published in 2022 about the impact of the menopause as well as the Government’s policy paper about its future strategy. See our article for further information on menopause in the workplace.
• Other Private Members’ Bills were introduced in 2022 which are at the early stages of the Parliamentary process. If brought into force, they will extend employment rights in relation to fertility treatment and miscarriage. The Fertility Treatment (Employment Rights) Bill will require employers to allow employees to take time off work for fertility treatment appointments and for connected purposes. An employee who has a qualifying relationship with a person receiving fertility treatment will also be entitled to take time off during working hours to accompany that person receiving fertility treatment. There will also be protection from detriment for taking time off. The Miscarriage Leave Bill will entitle employees to three days paid leave where they experience miscarriage, ectopic pregnancy or molar pregnancy that is less than 24 weeks gestation.
• The industrial action in 2022 affected many sectors. From nurses, civil servants, teachers, rail workers, ambulance staff and postal workers to the border force. Many of the disputes remain unresolved and with firefighters and control room staff currently balloting for strike action, we can expect to see high levels of industrial action throughout the early part of 2023 at least. But that’s not all. In October 2022, the Government introduced the Transport Strikes (Minimum Service Levels) Bill. This would have imposed obligations on employers and trade unions to provide for minimum transport service levels in connection with strike action. However, there have been significant developments since then. On 5 January 2023, the Government announced that it will introduce a Bill “in the coming weeks” to ensure that public services maintain a basic function and deliver minimum safety levels during industrial action. In fact, the Strikes (Minimum Service Levels) Bill was published today (10 January 2023). It has not been confirmed, but it is likely that today’s Strikes Bill supersedes the October Bill. The Strikes Bill enables the implementation of minimum service levels (MSLs) in certain services during strike action. The relevant services are health, fire & rescue, education, transport, decommissioning of nuclear installations and management of radioactive waste and spent fuel and border security. An employer will be able to issue a written work notice to the trade union to require the MSLs to be delivered. The work notice must identify the people who are required to work to secure the MSLs and the work they must do. Trade unions’ immunity from legal proceedings is removed if they fail to take reasonable steps to comply with the work notice. Significantly, there is no automatic protection from unfair dismissal for an employee who is identified in the work notice but participates in strike action contrary to that notice. In last week’s announcement, the Government stated that MSLs will be set for fire, ambulance and rail services and there will be consultation on what those levels will be. That was confirmed today. For the other services, the Government expects the parties to reach voluntary agreements on delivering a reasonable level of service when there is strike action.It will be interesting to see the progress of this very controversial Bill in the weeks and months ahead. Many see it as an attack on the fundamental right to strike and the TUC’s view is that if passed, the Bill “will prolong disputes and poison industrial relations, leading to more strikes”. The Government’s view is that whilst it absolutely believes in the ability to strike, it is “duty-bound to protect the lives and livelihoods of the British people“.

Even though we do not have definitive implementation dates for new employment legislation in 2023, it is clear from the range of Private Members’ Bills, especially those with Government support, that far-reaching changes will be introduced in the not too distant future. Employers can prepare for those changes by reviewing their current HR policies and procedures and identifying where updating will be necessary, for example in relation to flexible working. Employers can also consider what new policies and procedures will need to be prepared, (if they don’t already have them) in relation to carer’s leave and neonatal leave and pay, for example.

One thing is certain, 2023 will bring many challenges for employers and HR professionals.

Our first Employment webinar of 2023 will take place in March and further details of the date, speakers and topics will be sent in due course.

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