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Employment law changes 2023: guide for HR and line managers

Happy new year to all our readers.

It looks as though the government has abandoned the long awaited Employment Bill. But that doesn’t mean 2023 is likely to be a quiet year. The government is pushing ahead with the Retained EU Law (Revocation and Reform) Bill which, if passed, will allow it to “set fire” to all employment and health and safety legislation derived from the EU by the end of 2023. 

It has also introduced legislation which will limit the rights of some employees to take strike action to minimise risk and convenience to the general public.

It’s also putting its weight behind several private members bills which are currently going through parliament which will deliver benefits to pregnant women, new parents, carers, victims of sexual harassment and those in hospitality where tips are given.

Retained EU Law (Revocation and Reform) Bill

Under the European Union Withdrawal Act most UK laws in existence on or before 31 December 2020 were preserved. 

The Retained EU Law (Revocation and Reform) Bill will repeal all EU derived laws by the end of 2023 (although the government will be able to extend that deadline to 2026). It will then be able to make sweeping changes to established laws in respect of working time and holidays, discrimination, TUPE, agency workers, part-time workers, fixed-term employees and new parents. 

The government will have to legislate to re-introduce (or adapt) the EU laws it wants keep before that very tight deadline. It doesn't look as though employment protections are a priority for the government and it’s possible that important rights will fall off the statute books without anything in place to replace them. This will create uncertainty and could result in an increase in staff dissatisfaction, industrial action and employment claims. 

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New law to limit disruption caused by strikes

The government has introduced new legislation which will require unions to take steps to ensure that certain members of staff don't take part in strike action in order to meet minimum service levels. The Strikes (Minimum Service Levels) Bill applies to a wide range of sectors: education, transport, health, fire and rescue, nuclear and border security. 

An employer facing a strike will be able to serve a ‘work notice’ on the union identifying the employees that it needs to meet the service levels required. Once notice has been given, the union is under a duty to take all reasonable steps to ‘ensure that all members of the union who are identified in the work notice comply with it and continue to work. Any union that doesn't comply will lose its immunity from being sued and, employees who refuse to turn up to work in breach of the notice can be fairly dismissed.

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New protection against redundancy

Pregnant women and new parents will receive additional protection from being made redundant under the Protection from Redundancy (Pregnancy and Family Leave) Bill.

Under current rules, before making an employee redundant who is on maternity leave, shared parental leave or adoption leave, employers are obliged to offer them a suitable alternative vacancy where one exists in priority to anyone else who is provisionally selected for redundancy.

The new Bill will extend protection so that it applies to women from the point they tell their employer they are pregnant and for 18 months from the start of their maternity leave. It will also protect new parents returning to work from adoption and shared parental leave from the point they start leave and last for 18 months.

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Paid time off for parents of sick and premature babies

The Neonatal Care (Leave and Pay) Bill will allow parents to take paid leave to enable them to spend more time with babies requiring care.

Neonatal care leave will be available as a “day one” right for parents of babies who are admitted into hospital in their first 28 days of life and who have been in hospital, without a break, for seven days or more. However, parents will only be eligible to receive paid leave if they have worked for their employer for 26 weeks. Separate regulations will set out how much time off they are allowed to take and the rate of pay they will receive.

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Carers leave

The Carers Leave Bill will introduce one week's unpaid leave to help employees with long-term caring responsibilities balance these with their paid work. It will be a “day one” right and leave can be taken in one single block or on individual days.

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New rules on combating workplace harassment

The government has ratified the International Labour Organisation's Violence and Harassment Convention which comes into effect on 7 March 2023. It has agreed to implement laws to ‘respect, promote and realize the right of everyone to ... work free from violence and harassment’ - including third party harassment. 

The ILO has published a practical guide for employers on how to prevent violence and harassment at work to help them to address, prevent and respond to violence and harassment at work.

Last year, the government said that it would introduce a new duty on employers to play an active role in preventing workplace sexual harassment. It has recently confirmed that it will support a private members bill - Worker Protection (Amendment of Equality Act 2010) Bill - which will:

  • Reintroduce liability for harassment caused by third parties
  • Put employers under an active duty to prevent sexual harassment
  • Allow tribunals to increase compensation by up to 25% where staff have been subjected to sexual harassment 

Employers will be able to avoid liability if they can show that they took all reasonable steps to prevent harassment. 

Once in force, employers will have to update their diversity and inclusion policies, consider what additional steps they need to take to prevent sexual harassment and ensure that the training they provide to their staff complies with the new law.

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Changes to rules on flexible working

The government has announced that it will make changes to the right to ask for flexible working. It will become a “day one” right, employees will be able to make up to two requests each year and the employer must deal with the application (and any appeal) within two months. Employers will still be able to turn down requests if they have a business reason for doing so on the same grounds as currently exist. 

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Extra bank holiday

To celebrate the coronation of the King, there is an additional bank holiday on Monday 8 May 2023. Your staff will only be able to take the day off if their contract permits this, your organisation closes on that day or they ask to take the day off as holiday. 

To find out if your contractual clauses allow your staff to take the day off click here.

Fair distribution of tips

The government is supporting a Private Members Bill -  Employment (Allocation of Tips) Bill which will ensure that tips, gratuities and service charges paid by customers are allocated to workers. 

The government has also said that it will publish a Statutory Code of Practice setting out how tips should be distributed to ensure fairness and transparency. 

National living wage and national minimum wage

There are some hefty wage increases employers will need to factor in. From April 2023, the following apply:

  • Rate for people aged 23 and over - £10.42 per hour [a 9.7% uplift to the current rate of £9.50]
  • Rate for 21-22 year olds - £10.18 an hour [a 10.9% uplift to the current rate of £9.18]
  • Rate for 18-20 year olds - £7.49 an hour [a 9.7% uplift to the current rate of £6.83]
  • Rate for 16-17 year olds - £5.28 an hour [a 9.7% uplift to the current rate of £4.81]
  • Apprentice rate - £5.28 an hour [a 9.7% uplift to the current rate of £4.81] 
  • Accommodation offset - £9.10 [a 4.6% uplift to the current rate of £8.70]

Increase in employment related statutory rates

From April 2023 the rates for:

  • Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay, Statutory Parental Bereavement Pay and Maternity Allowance will all increase from £156.66 to £172.48 per week
  • Statutory Sick Pay will increase from £99.35 to £109.40 per week 


We don’t yet know when most of these changes will come into force. In most cases, the government will need to introduce further regulations to enact the provisions set out in these bills. It’s therefore likely that some of these changes will roll over into 2024. 

Want to know more?

We want senior leaders and HR professionals to get up to speed as quickly as possible with changes to employment law and are hosting a series of free webinars in early February on various dates. Please contact me if you'd like to attend. 

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*This article was updated on 26 January 2023.