Employment law: what’s on the horizon in 2023?

The year ahead could potentially see a variety of changes to UK employment law. We have set out below the expected developments that are likely be of interest to schools.

Proposed withdrawal of all European Union (EU) law

Schools may well be aware that a number of significant UK employment law rights are derived from the EU. To date, the UK’s transition out of the EU following Brexit has been eased significantly through retained EU legislation.

The government recently announced a new Bill, The Retained EU Law (Revocation and Reform) Bill, which, if passed, has the potential to have a significant impact on UK law. It plans to remove all EU-derived UK legislation by 31 December 2023, although this date can be extended until 31 December 2026, unless specific regulations are introduced to retain it. If not retained prior to this date, any EU-derived law will automatically expire.

Employees currently benefit from an abundance of rights that stem from EU law, including paid annual holiday and the 48-hour working week, in accordance with the Working Time Regulations. Other significant employment legislation – including TUPE, the Agency Worker Regulations and the Part-Time and Fixed-Term Worker Regulations – may also be impacted.

The Bill has many stages to go through before becoming law and it is impossible to know, for now, what approach the government will take if it does pass as drafted, in terms of the retention or otherwise of rights derived from the EU.

It is evident, however, that major changes to UK employment law could be on the horizon and schools should closely monitor any further details provided by the government. We will, of course, keep schools updated on any developments in this area to ensure they can appropriately plan ahead to ensure legal compliance.

‘Fire and rehire’ code of practice

Prompted by the mass dismissals implemented by P&O Ferries in 2022, the Government has recently published the long-awaited draft of its statutory Code of Practice on Dismissal and Re-engagement (the “Code”), otherwise known as ‘fire and re-hire’, as part of a consultation process.

The draft code sets out an employer’s responsibilities when seeking to change terms and conditions of employment. At the heart of the code is the importance of a “meaningful” consultation between employees, or representatives/trade unions as the case may be. It highlights that a legally binding contract, whether verbal or written, should not be varied unilaterally. The code provides guidance and recommendations as to how employers should deal with any disagreements that do arise, or steps to take if an agreement cannot be reached. In particular, it advises:

• If numerous changes are proposed, where possible, they should be implemented over a period of time rather than all at once (depending on the proposals in question)
• Employers should inform employees that proposed changes will be kept under review so that original terms might be reintroduced or further amended if appropriate
• Employers should re-examine their business strategy in the event agreement cannot be reached.

Whilst the code itself would not be legally binding, if implemented, employment tribunals would have the authority to increase compensation awarded to an employee by up to a 25% where they find that there has been an unreasonable failure to comply with the code.

The government consultation is set to close on 18 April 2023, and we will update schools further once the response has been published.

Strikes

The latter half of 2022 saw high-profile industrial action across many key sectors. This has continued into 2023 with many teachers now striking as a result of the ongoing dispute over pay.

The recent strikes have raised significant concerns about the total shutdown of key infrastructure. As a result, on 5 January 2023, the Government announced proposed new strike legislation to ensure minimum service levels for fire, ambulance and rail services, with the possibility that other sectors – such education and health – could face similar action if they do not reach voluntary agreements. A copy of the draft Bill (and its progress) can be found here.

For further advice on the possible impact on schools, please get in touch.

Holiday pay

Schools will no doubt be familiar with the judgment of the Supreme Court in the case of the Harpur Trust v. Brazel. The case confirmed that holiday entitlement for permanent, part-year workers should not be pro-rated to that of a full-time worker and, as such, they should be entitled to the full statutory holiday entitlement of 5.6 weeks. The background to the case and our detailed note on the judgment can be found here.

As a result of the decision, arguably unfairly, part-year workers are effectively entitled to a greater holiday entitlement than part-time members of staff who work the same number of hours over the course of the year.

On 12 January 2023, the government launched a consultation “seeking views on proposals to pro-rata holiday entitlement for part-year and irregular hours workers based on the annual hours they work”. Essentially, it is seeking to address the disparity outlined above by introducing a 52-week reference period for part-year and irregular workers that includes weeks in which no work has been performed –  which is in stark contrast to the current calculation method which excludes weeks not worked from the 52-week reference period.

We are aware that many schools have been taking steps over the last six months to ensure compliance with the Supreme Court judgment but, in the light of the recent government consultation and possible future legislative reform in this area, we recommend that they take legal advice on how best to proceed. Further details on the practical implications for schools can also be found here.

We also await the judgment of the Supreme Court in Constable of the Police Service of Northern Ireland v Agnew to determine whether historic holiday pay claims can be brought where there are gaps of three months or more between a series of underpayments. The outcome could have significant implications for schools and employers across the UK. If the Supreme Court agrees with the decision of the Northern Ireland Court of Appeal as commentators suspect, the three-month break rule which has been used to limit holiday pay and other unlawful deduction claims since the Bear Scotland v Fulton decision in late 2014, could be overruled. The result could be that UK employers could face new holiday pay claims – which they had previously assumed were out of time potentially dating back two years.

Flexible working

Following its consultation response on “Making Flexible Working the Default”, the government has given its support to the Employment Relations (Flexible Working) Bill. If implemented, it will result in the following changes:

• The right to request flexible working will become a day one right for all employees – i.e., it can be requested from the first day of employment, which is in contrast to the current 26-week qualifying period
• Employers will be required to consult with an employee before rejecting a flexible working request in order to discuss whether any alternative forms of flexible working are available
• Employees will be allowed to make two flexible working requests in a 12-month period, instead of one
• The timeframe for employers to respond to a request will reduce to two months from three.

Further details about the consultation and proposed changes can be found here.

Data protection reform and monitoring at work

Legislation has been announced to replace the UK GDPR with a new, British data protection framework by amending the Data Protection and Digital Information Bill which is currently going through Parliament.

The Information Commissioner’s Office (ICO) has also published two consultations:

• Workers’ health – the deadline for responses to the ICO consultation on draft guidance on information about workers’ health was 26 January 2023. This covers key topics such as processing health data, transparency and retention. It also provides guidance on data sharing, automated decision making as well as specialist topics such as sickness, injury and absence records, occupational health schemes, medical examinations, genetic testing and health monitoring
• Monitoring at work – the deadline for responses to the ICO consultation on draft guidance for employers on monitoring at work was 11 January 2023.

The outcome of these consultations is expected later this year.

Family leave and pay

The end of 2022 saw the government backing various Private Members’ Bills in relation to family leave and pay which are anticipated to become law in 2023, and will have widespread application to staff in schools:

The Protection from Redundancy (Pregnancy and Family Leave) Bill will:

• Widen the scope of redundancy protection to pregnant women and to new parents who have recently returned to work from maternity, shared parental or adoption leave
• Extend the redundancy protection period so that it begins when an employee informs her employer that she is pregnant and ends 18 months from the start of maternity leave. Similar provisions will apply to staff who are adopting a child or taking a period of shared parental leave.

Further details on the proposed changes and the impact on schools can be found in our article here.

• The Neonatal Care (Leave and Pay) Bill will allow parents to take up to 12 weeks of additional paid leave, on top of other entitlements, namely maternity and paternity leave when their babies require specialist care after birth
• The Miscarriage Leave Bill and the Fertility Treatment (Employment Rights) Bill will provide paid bereavement leave to parents and paid leave for fertility treatment respectively
• The Carer’s Leave Bill will entitle employees who are providing or arranging care for dependents to one week’s unpaid leave per year and protection from dismissal or detriment as a result of having taken time off.

Protection from harassment in the workplace

Another Bill which has received Government support is the Worker Protection (Amendment of Equality Act 2010) Bill which specifies a new proactive duty for employers to take reasonable steps to prevent sexual harassment of their workers. It makes businesses responsible for the harassment of their employees by third parties. Should the Bill come into force, it will allow workers to make third-party harassment claims against their employers following an incident of harassment by, for example, a client or customer.

Impact on schools

Although we do not have definitive implementation dates for the proposed legislative changes – which may be subject to change, it is clear from the number and range of Private Members’ Bills, especially those with government support, that far-reaching changes to employment law are likely to be on the horizon in 2023.

In due course, schools will need to prepare for the changes by reviewing and updating their existing staff policies and procedures – for example, in relation to flexible working – and implementing new ones, where required, for example, in relation to carer’s leave and neonatal leave and pay.

We will keep schools updated as and when we know more.