Employment law: key changes

11 / 01 / 2023

As we embark on a new year, we review key Employment themes from 2022 and what lies ahead in 2023.

Absence from work

Bank holidays and holiday pay

With the Queen’s platinum jubilee and her funeral, ten bank holidays were awarded in 2022 rather than the ‘usual’ eight. In 2023 an additional bank holiday has been announced for the King’s coronation (the bank holiday will be on Monday 8 May 2023, following the coronation on Saturday 6 May 2023). Whether an employee is entitled to leave and / or pay for any bank holiday will depend on their contractual terms; the right to paid time off is not absolute. Consideration should be given to the drafting of contractual terms, as well as custom and practice. Click here for our article on this topic.

Issues concerning the provision of holiday pay have once again hit the legal headlines following the Supreme Court’s decision in Harpur Trust v Brazel. Judgment has been given on the correct calculation of holiday pay for part-year workers. Calculations concerning holiday pay can be tricky – especially for atypical workers. Incorrect payments may lead to action (perhaps even class action) from aggrieved workers – where, depending on the circumstances, claimants can seek damages for backdated holiday pay (amongst any other possible claims), subject to limitation considerations. 

Family rights and leave

The government has announced that support (in the form of paid leave, subject to eligibility requirements) will be given to parents whose babies require neonatal care after birth. These parents will be allowed to take up to 12 weeks of paid leave, in addition to other leave entitlements such as maternity and paternity leave, so that they can spend more time with their baby at what likely is a hugely stressful time. These entitlements are scheduled to come into place in 2024 or 2025, although perhaps we can hope it could be sooner, once the bill has successfully completed the necessary approvals in parliament in 2023.

Menopause support at work is attracting more attention. However, calls for changes to the law to further address and support the rights of menopausal women at work have been considered unnecessary by the government, who deemed the current protection under the Equality Act 2010 ‘adequate’. A menopause policy at work is not a legal requirement, but the impact of the menopause on a workforce is a topic which more employers are embracing more publicly. Flexible working rights were amended and extended in 2022 – and flexible working is one way menopausal women may feel better supported in the workplace.

Sickness absence

On 1 July 2022 the government expanded the categories of healthcare professionals that can sign or issue fit notes to include nurses, occupational therapists, pharmacists and physiotherapists. Previously, fit notes were only acceptable if signed by doctors (most commonly a GP). A new version of the fit note was introduced in April 2022 and fit notes no longer need to be issued ‘in ink’. Fit notes still require an assessment of the individual before being issued; they cannot be issued on demand or over the counter.

Employment Tribunals are dealing with a backlog of claims and have seen a number of Covid related cases – such as dismissal owing to vaccination status and dismissal for failure to attend the workplace for fear of ‘serious and imminent danger’. Covid support groups are looking for Covid related illnesses to gain protection in the Employment sphere, with a campaign for a diagnosis of long Covid to be recognised as a disability for the purpose of the Equality Act 2010. Although we can hope the pandemic is something we can all ‘put behind us’, the aftermath of the past few years and the many changes Covid has brought to the workplace will likely continue to dominate the Employment area.

Strike action

Strikes have been a hot topic – particularly in the public sector with railway workers, nurses and members of the ambulance service striking. The government has introduced new legislation to provide minimum service levels during strikes and for employers to hire agency staff to provide cover during strikes in some circumstances. This was previously a criminal offence. That legislation also increases the maximum award for damages payable by trade unions for unlawful strike action to £1m. However, issues remain concerning the suitability of any agency workers (for example with regards to training and skills) to cover positions affected by strike action, particularly where replacement workers may be needed at short notice. Agencies may also be reluctant to supply staff where reputational damage and / or worker discontent may follow from any such recruitment exercise.

Pay and wider remuneration considerations

Cost of living

With inflation at the highest levels in decades and forecasts concerning the rising costs of energy attracting major headlines – the government has accepted the recommendations of the Low Pay Commission in full and rates of the National Living Wage and the National Minimum Wage will rise to over £10 per hour from April 2023.

National Insurance contributions were increased in April 2022 and the threshold for National Insurance payments was then increased in July 2022, meaning fewer workers were caught in the national insurance ‘net’. In November 2022 April’s increase was then reversed. April 2023 will see the lowering of the threshold for additional rate tax payers, meaning more people will be paying this higher rate of tax than before.

Tipping

New law is anticipated whereby service staff (including agency staff) will be entitled to receive tips, gratuities and services charges without deductions. Employers should maintain a written policy concerning the distribution of tips. New rules are expected with regards to enforcement of these tipping practices through the Employment Tribunal. This change does not necessarily render the use of tronc systems redundant or unlawful; the principle of fairness in any such arrangement will be paramount. Along with the new law in this area will be a new statutory code of practice – and so the detail in any such code of practice should add clarity on this area. Click here for our article on this topic.

Bonuses

The cap on bankers’ bonuses has been scrapped. In the aftermath of the 2007-2008 financial crisis, employees’ bonuses (who are ‘material risk takers’) were limited to no bigger than 100% of their fixed annual pay, or 200% with shareholder approval. The impact of this could be one to watch – especially where bankers have accepted higher fixed salaries instead of substantial bonuses; there could be some fall out if employers seek to impose detrimental changes to any contractual terms with regards to pay and benefits.

Brexit / European law

Over the course of 2023, the government will be considering retained EU law and it remains to be seen whether any substantive amends will be made to current law, such as any amends to the Working Time Regulations.

Redundancies

Finally, with a perfect storm of high energy prices, recession and inflation, we are seeing a significant rise in restructuring programmes as businesses seek to save costs and rationalise resources. As the economy contracts and employees find it more difficult to secure new employment, there will no doubt be more challenges by individuals seeking to avoid redundancy. It is important to take legal advice at the outset to limit the risk of claims and if businesses are contemplating making 20 or more redundancies within a 90 day period, they must comply with strict regulations to avoid significant compensation claims.

If you wish to discuss any of these topics, please feel free to reach out to any of the team.