Employment Legislation Update 2022
We recap the key employment legislative changes of 2022 and look ahead to 2023.
On Tuesday 6 December 2022 we hosted our Employment Law Brunch Briefing ‘What’s new in employment law?’ where we looked back at the key employment law cases and decisions and legislative changes of 2022 and looked ahead at what employment law legislation developments we can expect to see in 2023. If you missed this briefing, you can register on our website to view the recording at https://www.wrigleys.co.uk/events/recorded-webinars/.
Below we highlight the key legislative changes in 2022 and legislative expectations for 2023.
Labour Market Enforcement Strategy 2023 to 2024
At present, there are four main enforcement bodies: the Employment Agency Standards Inspectorate (‘EAS’), the Gangmasters and Labour Abuse Authority (‘GLAA’), the HM Revenue and Customs National Minimum Wage Enforcement Team (‘HMRC’) and the Health and Safety Executive (‘HSE’).
In December 2018, the government’s Good Work Plan announced the government’s intention to bring forward proposals for a new single labour market enforcement agency. In 2021, the government proposed to create an agency with increased powers to enforce employment rights and increase employers’ compliance with such rights. The agency would protect workers in relation to labour exploitation, modern slavery, the National Minimum Wage and holiday pay for vulnerable workers. Primary legislation will be required to set up the new agency. However, it is not yet known whether such legislation will be introduced.
In addition, there was a call for evidence by the Director of Labour Market Enforcement in March 2022 regarding the compliance and enforcement for GLAA, HMRC and EAS. At the moment the government appears to be suggesting these three agencies will be combined into a single agency whilst the HSE will remain distinct and separate.
It is not known when the Labour Market Enforcement Strategy for 2023 to 2024, which was due to be delivered to the government in the autumn of 2022, will be published.
Human Rights Act 1998 reform
In December 2020, the government launched an independent review into the Human Rights Act 1998 (‘HRA’). The review examined the structural framework of the HRA rather than the rights themselves (set out in the European Convention on Human Rights, to which the UK is a signatory (‘EHCR’)). Separately, the Parliamentary Joint Committee on Human Rights concluded in July 2021 that HRA did not require amendment.
However, in December 2021 the Ministry of Justice published the consultation ‘Human Rights Act Reform: A Modern Bill of Rights’ which considered replacing the HRA with a ‘Bill of Rights’. In June 2022, the government introduced the Bill of Rights Bill 2022-23 to Parliament with the aim of doing this. The Bill proposes a new domestic human rights framework based around the EHCR.
Despite having its first reading in June 2022, the Bill was dropped prior to its second reading by the Truss government. However, following his reappointment as Justice Secretary under Rishi Sunak, Dominic Raab has since confirmed that the Bill will proceed through Parliament in 2023.
The Social Security (Medical Evidence) and Statutory Sick Pay (Medical Evidence) (Amendment) (No.2) Regulations 2022
From 1 July 2022, the above Regulations expanded the groups of people who can sign statements of fitness for work for the purposes of Statutory Sick Pay and social security claims. The Regulations mean that registered nurses, occupational therapists, physiotherapists and pharmacists can now issue sick notes. The purpose of expanding the authorising groups for sick notes was to reduce GP workloads and therefore make it easier for patients to secure an appointment.
Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022
On the 21 July 2022, the above Regulations came into force making it easier for businesses to engage agency workers to replace workers on strike. However, in September, the Trades Union Congress (‘TUC’) reported the government to the International Labour Organisation alleging that the engagement of temporary workers to conduct the duties of workers on strike significantly damages the right to strike. The TUC also brought separate judicial review proceedings challenging the new legislation. On 14 December 2022, the High Court granted permission for a judicial review and the case is expected to be heard in March 2023.
Employment status consultation
In July 2022, the government published its response to a consultation on whether the three current employment statuses (that of independent contractor, worker and employee) were fit for the modern economy. Most respondents agreed that issues remain with the current model of employment status. However, overall there was little consensus on how these concerns should be addressed.
As a result, the government has not implemented any legislative changes on the matter. Instead it has published new non-statutory guidance designed to help clarify the aspects of the different employment statuses. This includes an explanation of how employment status determines the employment rights individuals are entitled to, the factors which determine an individual’s employment status and how employment status should be determined for different sectors.
The government also confirmed it will not seek to unify the definition of employee for tax and employment purposes. Presently, an individual can be declared to be an employee by the tax tribunal for tax purposes, but such a finding will not necessarily mean the same individual would be found to be an employee by an employment tribunal, or vice-versa. This position is set to continue.
Future of work review
During the Spring and Summer of 2022, Matt Warman MP led the first phase of the Future of Work review. The review consists of two phases: the first is a high-level assessment of the key strategic issues facing the future UK labour market and the second phase will provide a more detailed assessment of key areas.
On 1 September 2022, Matt Warman MP recommended that that the government consider four key areas in greater detail: artificial intelligence and automation, skills, place and flexibility, and worker’s rights. You can find the full response here.
At present, no timeframe for the implementation of the second phase has been given, but it is not unreasonable to expect further progress in 2023.
Disability workforce reporting
In December 2021, the Minister for Disabled People launched a consultation on disability workforce reporting, which had been promised as part of the National Disability Strategy in July 2021. The consultation aimed to explore disability workforce reporting for larger employers who employ over 250 employees, with a focus on publication of the proportion of employees who identify as disabled.
However, on 14 November 2022, the government announced it had no current plans to introduce mandatory disability pay gap reporting. A full response on the above consultation remains outstanding.
The Exclusivity Terms for Zero Hours Workers (Unenforceability and Redress) Regulations 2022
On 5 December 2022, the above Regulations came into effect meaning that employers cannot prevent workers who earn less than the ‘lower earnings limit’ (which for the financial year 2022-2023 is £123 per week) from seeking other employment if they wish.
If an employer dismisses an employee who currently earns less than £123 a week for breaching an exclusivity term, the Regulations give the employee the ability to bring a claim for automatic unfair dismissal. There is no minimum length of service required by the employee to bring this claim.
Looking ahead to 2023
We have highlighted in the above where more progress is expected in 2023. The following employment legislative developments are also expected.
A statutory Code of Practice on dismissal and re-engagement
The Code of Practice was proposed following the P&O Ferries redundancy affair in March 2022. This will seek to tackle controversial ‘fire and rehire’ practices sometimes used by employers to force through (often less favourable) changes to workforce contracts. Courts and tribunals will be required to consider the Code when determining relevant cases. In addition, they will have the power to award an uplift of up to 25% of an employee’s compensation where the Code applies and where the employer unreasonably fails to follow it.
On 3 November 2022, Lord Callanan confirmed that the government intends to publish the draft statutory code of practice in ‘the near future’, suggesting it will be further progressed in 2023.
Information Commissioner’s Office (‘ICO’) consultations
These consultations are expected to contribute to new guidance to replace the Employment Practices Code to better reflect changes in UK Data Protection law since GDPR and the Data Protection Act 2018. The guidance will aim to help employers consider the data protection issues surrounding recruitment and selection, employment records, monitoring at work and information about workers’ health.
Retained EU Law (Revocation and Reform) Bill
This Bill proposes that EU-derived secondary and retained direct EU legislation will become invalid on 31 December 2023 unless expressly preserved by ministerial order. This potentially means that many regulations impacting employment practices, such as the Fixed Term Employee Regulations 2022, the Working Time Regulations 1998 and the Agency Worker Regulations 2010, would no longer have EU Directive underpinning and that related European Court of Justice case law on those matters would no longer have effect in the UK judicial system.
This will make it easier for courts and tribunals to depart from existing EU-derived domestic case law. Legal commentators have raised concerns that if the Bill becomes law and legislation is allowed to lapse at the end of December 2023, significant questions will arise for employers on many aspects of employment law and enforcement.
The Bill is currently awaiting its third reading in the House of Commons.
The Employment Bill
This Bill was originally described in the Queen’s Speech to Parliament of December 2019. As described in the Speech, the intention of the then Johnson government was to wrap up several employment issues into this piece of legislation. This included ensuring workers got the tips they received, extending the protections for pregnant women and women on maternity leave against redundancy and making flexible working a default right and to create a single employment rights enforcement agency.
The Bill has not been set out since, though several private members’ bills and other consultations have sought to bring the issues the Bill was expected to cover forwards. Some of these have been highlighted above.
- Allocation of Tips Bill: will have its third reading early in 2023. The Bill ensures that tips, service charges and gratuities paid by customers are fairly allocated to workers.
- Paternity (Leave and Pay) Bill: will have its second reading early in 2023. It aims to extend eligibility to paternity leave and pay, and to make provision for more flexibility in the timing and notice period for paternity leave.
- Neonatal Care (Leave and Pay) Bill: is due to have its third reading early in 2023. It aims to make provision about leave and pay for employees with responsibility for children receiving neonatal care.
- Flexible working: on 5 December the government published its response to consultation on flexible working - Making flexible working the default. The government has confirmed it intends to introduce legislation to:
- Require an employer to consult with an employee if it is considering rejecting a flexible working request
- Permit employees to make two requests in a 12-month period instead of one
- Reduce the time an employer has to respond to a request from three months to two
- Remove the requirement on the employee to specify how the employer might deal with the effects of the request.
A private members bill setting out these changes is already being processed through Parliament and has the government’s backing.