Employment law changes coming in 2023

In this blog we focus ahead on the 2023 employment law changes.  

1.  2023 Employment Law Changes: Rate Changes

The 2023 employment law changes will include the usual set of rate changes and these will take effect in April 2023. They include the following:-

Statutory maternity, paternity, adoption, parental bereavement, and shared parental pay is to increase from £156.66 to £172.48 per week or 90% of the employee’s average weekly earnings, whichever is lower as of 02 April 2023.

Statutory Sick Pay is to increase from £99.35 to £109.40 per week as of 06 April 2023.

The minimum weekly amount an individual must earn to be entitled to these payments will remain at £123.

New National Minimum Wage rates are as follows:

•          Workers aged 23 and over: £10.42 an hour (National Living Wage)

•          Workers aged 21-22: £10.18 an hour

•          Development rate for workers aged 18-20: £7.49 an hour

•          Young workers rate for workers aged 16-17: £5.28 an hour

•          Apprentice rate: £5.28 an hour.

2.  Government consultation on holiday pay

In the case of Harpur Trust vs Brazel 2022, the Supreme Court has concluded that 12.07% holiday pay calculation method is incorrect, this has resulted in Acas no longer advising on this calculation method.

The government have began to consult and the Government estimates that between 320,000 and 500,000 permanent term-time and zero-hours contract workers will receive more holiday entitlement. Approximately 37% of these are workers in the education sector, such as teaching assistants who are employed on part-year contracts. Some agency workers may also be affected by this judgment if they have contracts of employment with employment businesses or umbrella companies.

The consultation period ends on 09 March 2023 and a further update will shortly follow.

For the interim, we have set out a blog which is based on what the government advises you to follow until they have completed their consultations and revealed how holiday pay should be paid moving forward for contracts with irregular working patterns; https://thehrexperts.co.uk/are-you-calculating-holidays-correctly/.

3. 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.

In June 2022 the Government published the Retained EU Law Bill which will repeal all EU derived laws by the end of 2023, however the Government will be able to extend that deadline to 2026. The Government will then be able to make changes to established laws in respect of working time, 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 to keep before that very tight deadline. It doesn’t look as though this is a priority at present and likely the extension will be used.

Watch this space for any updates.

A much-anticipated part of the 2023 employment law changes is the Employment Bill, although there is no guarantees that one will appear, it is most likely the following will be introduced in 2023;

New Bill to introduce law to limit disruption caused by strikes

On 10 January 2023, the government introduced the Strikes (Minimum Service Levels) Bill to Parliament, superseding a previous bill on minimum service levels in the transport sector. The new bill allows the government the power to set minimum service levels for:

  • health services
  • education services
  • fire and rescue services
  • transport services
  • border security
  • decommissioning of nuclear installations and management of radioactive waste and spent fuel.

The bill, which applies to England, Wales and Scotland, will make a strike unlawful – thereby removing unfair dismissal protection from strikers and exposing unions to fines.

Paid time off for parents of sick and premature babies

The government backed new legislation to allow parents whose babies require specialist care after birth to be given additional 12 weeks paid time of work.

A baby who is born prematurely or sick will receive neonatal care in hospital or another agreed care setting – often for a prolonged period. This can leave parents in a position of having to use their existing leave entitlement or having to return to work while their baby is still receiving hospital care.

Carers leave

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

Flexible working

The government confirmed that potential new legislation could go ahead to enable employees more rights under flexible working.

The changes could include

  • making flexible working requests a day one right for employees (thereby removing the current 26 weeks’ service requirement)
  • allowing employees to make two requests a year (currently only one request is possible)
  • requiring employees to consult with the employee before rejecting a request
  • shortening the time employers must reply to a request from three to two months
  • removing the requirement for employees to set out the likely effects on the business of the change.

Extra bank holiday

To celebrate the coronation of the King, there is an additional bank holiday on Monday 8 May 2023. Employees 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.

Fair distribution of tips

The government is supporting a Private Members Bill for ensuring fair tips for all workers which has reached final stages in parliament. The Bill is to introduce the unlawfulness for employers to withhold tips from workers that have earnt them.  

This legislation will benefit over 2 million hospitality workers who the majority of are earning the National Minimum Wage.

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.

Redundancy protections

Redundancy protection for new and expectant parents to be extended to 18 months from the beginning of leave (maternity, adoption, shared parental) and throughout pregnancy.

The Government backed enhanced redundancy protection but this has been sat on the fence for two years.


GDPR will be replaced with a ‘common sense’ data protection system. Further details of the proposed new scheme are yet to be released. This could fall in line with the Retained EU Law (Revocation and Reform) Bill.

Rules on combating workplace harassment

The government has agreed to implement laws as of 07 March 2023 which are to ‘respect, promote and realise the right of everyone to work free from violence and harassment’ – including third party harassment.

The government 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 need 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.