You could say that 2022 saw its fair share of ups and downs for workers and employers, but what employment law challenges lie ahead in 2023?
Whether you have one employee or one hundred, you need to prepare your business for the upcoming changes which are on the cards over the next 12 months. From the wide ranging Retained EU Law Bill to revisions to the Equality Act 2010, I have highlighted five things to look out for…
The Retained EU Law (Revocation and Reform) Bill
This is the big one. In simple terms, any existing EU regulations still in force in the UK will expire on December 31, 2023. As we go through next year you will hear more and more about how the Retained EU Law Bill will affect your business and everyday life. The Bill was published in the House of Commons back in September 2022, and will revoke more than 2,400 EU rules which remain in UK law following Brexit.
The Bill will make it easier for individual Government departments to review or replace these existing EU regulations, without having to pass separate, and time consuming, Acts of Parliament. The Government is keen to point out the benefits of relieving businesses from EU red tape and restoring the power of UK law. However, a lot of employment legislation is due to expire.
For example, there could be amendments to the Transfer of Undertakings (Protection of Employment) Regulations 2006. Also known as TUPE, it is based on the EU’s Acquired Rights Directive and the pro-business Government may make it easier for employers to harmonise terms. I suspect this will face opposition from trade unions.
There is a further question mark over the Working Time Regulations. Currently the UK’s annual holiday entitlement exceeds the EU Directive. Will the Government reduce statutory leave entitlement from 5.6 weeks? What about the future of the 48-hour working week restriction? I also wouldn’t be surprised if the Agency Worker Regulations are revised, as there has been a trend to bolster the rights of agency workers.
Will all the legislation be rubber stamped into UK law, or will changes be made? This will soon be decided as the Bill is due to be debated in Parliament over the next few months. If no agreement is reached on certain areas, there is an extension mechanism which runs to June 2026. The Government will need to tread a fine line as the UK-EU Trade and Cooperation Agreement (TCA) states that EU fines will be imposed if changes to UK employment law affect trade and investment or reduce employment rights.
More redundancies
While tech giants and Amazon have hit the headlines over job losses, the cold winds of the recession are biting other industry sectors too. From retail to charities, organisations are planning to tighten belts which will inevitably mean slimming down their workforces. Many job losses will be directly down to the economic downturn as rising inflation and interest rates push up costs.
However, there is also evidence that some companies grew too quickly when times were good and are now adjusting to today’s post-pandemic world. Some economists believe that the full impact of the recession could be delayed to later in 2023 and beyond.
In fact, the Bank of England has predicted that unemployment will rise from its current level of 3.5% to more than 6% by 2025. The situation is different in every industry, with some sectors struggling to survive while a company across the road might be struggling to recruit. Which moves me nicely onto…
Skill shortages
According to the Office for National Statistics (ONS), there were approximately 1.1 million job vacancies open in September to November 2022, and experts predict the skills shortages are only set to increase.
The good news is that when the Recruitment and Employment Confederation (REC) published its Jobs Outlook for the third quarter of 2022, it said that employers were more likely to recruit in the short and medium term, rather than lose people. Poor decisions made during the first lockdown in 2020 are really starting to affect some businesses.
The employers who made use of the generous furlough scheme have been able to bounce back and meet customer demand, while companies that made job cuts continue to struggle. Since Brexit, skills shortages have always been closely linked to immigration issues. Home Secretary Suella Braverman has hinted at a tougher policy on immigration, so how will that affect recruiting overseas staff. Will it mean further skills shortages?
Reforms to the immigration system will likely centre around attracting highly-skilled workers and graduates, but there are calls for more visas (minus charges) for low-skilled jobs, particularly in the farming and healthcare sectors.
Hospitality
here is some much needed good news on the way for workers in the hospitality sector. The Government has made a pledge to bring in laws stating that employers are legally required to pass tips to workers without deductions.
There are also proposals to introduce an overarching enforcement body for the sector, which will support vulnerable workers around the issues of pay and employment rights. Trade body UKHospitality says that the King’s coronation, planned for Saturday May 6, has the potential to be a major boost for thousands of hospitality businesses.
It is also urging the Home Office to proceed with proposals to extend licensing hours in England and Wales over the coronation Bank Holiday weekend. UKHospitality Chief Executive, Kate Nicholls, said: “Any extra trading time for venues can make a vital difference as the sector looks to revive itself and drive wider economic recovery and employment.”
Equality Act 2010
There are moves to amend the Equality Act 2010 putting pressure on employers to take “all reasonable steps” to prevent sexual harassment. The Women and Equalities Committee wants new legislation to protect menopausal women, as well as a consultation on making menopause a new protected characteristic.
Other amendments being proposed in parliament include redundancy protection for pregnant women and new parents returning to work. Parents with premature babies could also receive extra leave and pay. Millions of workers juggle their career with caring roles, so the Government is supporting a move to give carers one week’s unpaid leave a year to provide or arrange care for their dependants.
Conclusion
Working in HR I am often seen as a harbinger of doom, but I consider myself a strategic business partner who can help with employment issues, such as the ones outlined above. As an HR professional, it pays to stay up to date with industry trends, economic predictions and legal judgements. Being prepared involves working closely with all departments, particularly the finance team who need to be made aware of business challenges.
In 2023 businesses will need to think positively and embrace changes, while coming up with innovative solutions to benefit their workers and customers. From health and safety to wellbeing, the environment needs to be right if a business is to survive adversity. When it comes to planning for the future, businesses need to ensure they have a robust, long-term strategy covering recruitment planning and people management.
