UK Employment law 2023
Reflecting on 2022
Looking back on 2022, the employment scene has been dominated by the war in Ukraine, post-covid and post-Brexit reactions. Labour shortages, partly fuelled by covid early-retirees, have been exacerbated by Brexit’s ban on European’s right to work freely here. Recruitment vacancies climbed beyond a record 1.3m unfilled jobs.
Recession has arrived, but because of the record vacancies, the normal avalanche of job losses has failed to materialise – a return to previous recessionary unemployment may yet see an incremental half a million unemployed, but that would still be well below the numbers of previous recessions.
Hybrid working became a thing during Covid, and is probably here to stay. Most job applicants in 2022 expected some home-working where their industry can accommodate it, and this has shifted the employment geography, with many offices now housing fewer employees, or none at all on certain days of the week.
Rising inflation sparks wage protests
Rapidly rising inflation, largely due to increases in food and fuel, have sparked significant wage hikes in 2023, and the ‘winter of discontent’ saw more than a million days lost to strikes in the year, largely in traditional union strongholds – the public and transport sectors notably. It’s a fraction of the turbulence in the 1970s – when one month alone saw 12 million strike days lost.
Recession is likely to temper the risk of a wage-price spiral, making this recession very different to the actual Winter of Discontent in the 1970s, when inflation was pushed up by the strikes themselves. Early indications suggest inflation has already peaked. Ironically, covid and the subsequent surge in homeworking will have limited the impact of strikes on supplies & hence inflation– cancelling the trains will only affect those who aren’t able to work from home.
‘Doing a P&O’
Those of us with an interest in trade union employee relations will not forget P&O in hurry – In March, in an unprecedented move, the company dismissed 800 largely RMT union members in a move that effectively removed the RMT from their business.
It was reckoned that the P&O episode would bring legislation banning ‘fire and rehire’. We predicted it wouldn’t, and we were right. A new ACAS guide suggests the practice should be a last resort (generally it always was anyway), but the threatened legislation did not materialise.
After much huffing and puffing Parliament confirmed no action would be taken against P&O. The CEOs of every other strike-ridden industry will have very much taken note of how the ferry operator managed to rid itself of a militant union. We predict we’ll see more companies ‘doing a P&O’ in 2023.
Unions become more militant
The more militant union leaders could learn from P&O & adapt their approach to employers to make them a more palatable partner, but experience shows they probably won’t. Unions and employers can work productively and mutually beneficially together, but the return to 1970s style militancy is likely to alienate employers and, ironically, hasten the demise of trade unionism in the UK’s private sector.
Public sympathy is waning and union members themselves are reported to be tiring of the strikes and the impact on their income. Rail unions have traditionally cited ‘safety’ as a core reason behind disputes, despite evidence that automated systems (requiring less staff) increases safety. To illustrate the point, in February a Merseyrail train driver ploughed his train into a station at 40mph, having been distracted by Whatsapp. Whilst the RMT insists that Guards are necessary to open doors, other rail networks operate safely without even a driver on board.
Looking ahead to 2023
So, what’s in store for 2023? The recession will be a feature for sure, how deep it will be remains to be seen, but economists predict it will prevail for the entire year. This will to a large extent dampen wage inflation and we may see office working making a come-back, though we expect hybrid work patterns to prevail to some extent.
Post-Brexit we’re no longer bound by European employment legislative developments, though domestic legislators will have an eye on their European counterparts. As the current challenges and inequalities apply as much in the UK as in Europe, it is unsurprising that planned developments are similar.
Taylor Report & the ‘Future of Work’
The ‘Taylor Report’ in 2017 considered changes to the employment law landscape, new rights for workers & reduced opportunity for exploitation e.g. via exclusivity clauses in zero hours contracts. The Good Work plan carried forward some of the recommendations into law and, in 2022, the ‘Future of Work’ committee was set up by government to consider a similar agenda, and we will await to see what is recommended this time.
Greater changes will come from an incoming Labour government, who have promised, amongst other things, a day 1 right to bring an unfair dismissal claim – something today’s workers need to wait 2 years for. We’re unlikely to see an election in 2023 though.
Record increases in the national minimum wage
Increases will top 11% in the April 23 annual minimum wage pay review. This is another significant challenge for industries dependent on lower wages, although to some extent the ability to attract minimum wage labour has already disappeared due to the national labour shortage which has driven up wages across the economy. For more on April’s rises see: https://www.myhrdept.co.uk/latest_news/national-minimum-wage-rates-2022-uk-2/
Restrictive covenants in employment contracts
Consultation on this closed in 2020, but it is still not known when or what the government intends to do. Possible changes include banning them altogether (unlikely), or stipulating maximum periods. The courts are currently more inclined to uphold post-employment restrictions for shorter periods than longer, and are less likely to uphold blanket clauses that apply to all employees.
Non-disclosure Agreements in employment contracts & settlement agreements
The government has announced that they will curb the use of NDAs, often included in employment contracts and settlement agreements. To what extent these will be curbed, and when, is something of a mystery, but we include it in the list here as these are common employment practices.
Enhanced responsibility to prevent sexual harassment
Sexual harassment has been in the news regularly throughout 2022 – we remember the Angela Reynor events in parliament and MP Neil Parish watching porn in the view of Westminster colleagues. Countless celebrities have come forward to explain their experiences of being harassed. Sexual harassment is generally committed by senior old males on impressionable younger females who don’t want to rock the boat. Legislators have committed to toughening up the duty to prevent and tackle sexual harassment both in the workplace and via third parties, detail is awaited.
Enhanced rights for pregnant employees and new mothers
The government has said it will extend the time a new or pregnant mother has to bring an unfair dismissal claim to 6 months – the standard for most employees is to bring a claim within 3 months of their dismissal.
Also expected this year is the enhanced right to be protected from redundancy, which currently applies to women on maternity leave, to be extended to include a 6-month period after maternity leave ends. The existing legislation entitles an employee on maternity leave to be offered an available job in a redundancy situation. The argument is that this is often abused by employers, who will wait for the employee to return from maternity leave (thus losing the right to enhanced protection) before conducting redundancy proceedings.
European GDPR to be scrapped (in UK)
Hurrah? We doubt it, the GDPR will be replaced by a new British system which is bound to continue to require the same sort of data standards as the existing GDPR. Aspects of our data regulations, e.g. the right of employees to submit Data Subject Access Requests, are deeply unpopular with employers. Will new British regs change things materially? We’ll have to wait and see.
Neonatal care leave
The government is bringing in an enhanced right for up to 12 weeks leave and pay for parents of babies requiring neonatal care. We expect this to materialise in 2023.
Also expected in 2023 is unpaid carer’s leave, which will create a new right to a week’s leave for carers each year.
Continuity of employment
Continuity of employment can currently be broken by an employee leaving their employment for at least a week, which must include a continuous period from a Sunday to a Saturday. At some point this will extend to 4 weeks, though as yet, we don’t know when. This will limit employer’s flexibility in circumstances where, for example, an employee’s employment ends, but is followed by a period of contract work. To break employment properly, employees will (if the legislation is enabled) have to not work for their previous employer in any capacity for at least a month.
What won’t make it into 2023?
Amongst the suggested changes not making it into 2023 legislation is changes to discrimination legislation to accommodate menopause. Impacting 70% of women in the workforce, it was suggested that menopause be added to the list of protected characteristics in the Equality Act, effectively creating a 10th protected characteristic. In the last few weeks, the government confirmed it did not intend to create additional legislation for this purpose. Lobbying will continue.
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