Upcoming employment law changes impacting SME’s 2023 / 2024 UPDATED September 2023

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2023 had looked to be the year in which major employment law changes were shaped and detail agreed.

This was due to the Post Brexit reform: the Retained EU Law (Revocation and Reform) Bill, which was created by the European Union (Withdrawal) Act 2018.

This act took a ‘snapshot’ of EU law as it applied to the UK at the end of the Brexit transition period on 31 December 2020 and provided for it to continue to apply in domestic law.

On 10 May 2023, the government scrapped the proposed sunset clause, which would have automatically revoked most retained EU law at the end of 2023.

This means that at the end of December 2023 there will be no amendments or withdrawal of the following EU legislation: The Working Time Regulations, TUPE, the Agency Workers Regulations, the Maternity and Parental Leave Regulations etc.

This is a relief to many HR / Employment Law professionals as well as business owners as It is rarely the case that quick law = good law!

Private members’ bills: The Employment Bill in all but name

Towards the end of 2022, the government announced that it was backing a series of private members’ bills, boosting their chances of making it through the parliamentary process and becoming law by summer 2023, whilst this hasn’t happened to this timescale, here are some areas to watch out for in the near future.

  • Changes to the flexible working regime to introduce a requirement for employers to consult an employee before rejecting a flexible working request, allow an employee to make two statutory requests in any 12-month period (currently one) reduce the employer’s decision period from three months to two months and remove the requirement that the employee must explain what effect the change would have on the employer and how that might be dealt with. Separately, the government has indicated that the right to request flexible working will become a day 1 right.
  • A new proactive duty to take reasonable steps to prevent sexual harassment and the re-introduction of employer liability for harassment of staff by customers or other third parties. The new duty to prevent sexual harassment is intended to shift the focus towards pro-active prevention rather than reaction.  The revival of liability for third party harassment is also intended to bring about a shift to a more protective approach. Employers will have a defence to a claim of third-party harassment if they can show that they took all reasonably practicable steps to prevent it. We can expect an increased focus on training not only managers but also staff themselves on how to handle unwelcome interactions with customers.
  • Extending redundancy protection beyond maternity, adoption and shared parental leave to cover any period of pregnancy and the months immediately following a return to work after family leave (expected to be 6 months). Protected employees can still be selected for redundancy but will have priority over other employees for any suitable alternative vacancies.
  • Introduction of 5 days’ carer’s leave each year, for employees who have dependants with a long-term care need. This new right will be unpaid, but employers will need to make decisions over whether to adopt a more generous policy.
  • Introduction of a new right to neonatal leave and pay giving new rights to paid time off to parents whose babies spend time in neonatal care units.
  • New laws on the fair distribution of tips and the introduction of a new statutory code of practice on tipping.

Most of these bills are enabling bills meaning that, if they pass into law, the government needs to introduce further regulations to enact the rights. Although some changes could be introduced late in 2023, most reforms are unlikely to take effect until 2024.

Other trends and policy areas to watch

We could see an increased focus on getting the long-term sick back to work, given the recent spotlight on the large numbers of working age people who are economically inactive due to health conditions. Legal reforms are possible in the longer term, although in the nearer term the government may focus on occupational health support and other softer initiatives.

Alongside the economic downturn, there is an ongoing skills shortage and battle to attract and retain good people so we can expect to see ongoing efforts to “do the right thing” and create the right culture. That might mean menopause policies becoming mainstream, fertility policies gaining traction, and employers under continuing pressure to embrace flexible and remote working including remote working from overseas locations. It might also result in employers becoming bolder in embracing positive action initiatives to improve on diversity & inclusiveness. Will climate and sustainability feature more highly on the employer agenda? We hope so.

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