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04 Apr 23
Employment Law: Changes to Expect in 2023

Holly Hale of our Employment Law team highlights the changes to expect in employment law this year.

Spring normally heralds a great deal of activity in the field of employment law and this year is no different. We will deal with the annual increase to compensation limits and the minimum and living wage and outline 5 anticipated changes expected to shape the law in the workplace this year and beyond.

Employment Tribunal Compensation Limits Increase

From 6th April the Employment Rights (Increase of Limits) Order 2023 makes the following changes:

  • The maximum amount of a ‘week’s pay’ – used to calculate statutory redundancy pay and various other payments (e.g. the basic award for unfair dismissal) – increases from £571 to £643
  • The maximum compensatory award for unfair dismissal increases from £93,878 to £105,707 (the upper limit remains the lower of a year’s salary or the maximum statutory limit).
  • The minimum basic award in cases where a dismissal is unfair by virtue of health and safety, employee representative, trade union, or occupational pension trustee reasons increases from £6,959 to £7,836

Minimum Wage Increases

The new rates for the National Minimum Wage, Including the National Living Wage, came into effect from Saturday 1 April 2023 receive a pay increase as the National Minimum Wage and National Living Wage rise comes into effect. The new rate rises include a 9.7% increase in the National Living Wage, from £9.50 per hour to £10.42. this is the highest increase to the National Living Wage since its introduction in 2016, reflecting the cost-of-living crisis.

Here are the five big changes to employment law anticipated this year –

Strikes: Minimum Service Levels

This has been a very hot topic due to the number of sectors taking strike action across the country, which have included nursing, rail, mail, and education all taking to the picket-line. The Government has announced controversial proposed “strike laws” that they say will ensure minimum levels of service across the country for crucial sectors such as health, transport, education, and fire services.

The Parliamentary Bill, “Strike (Minimum Service Levels)” can be found here:

Extension of Employee Rights for Pregnancy, Family Leave and Pay

The Government has recently confirmed their support for several Private Members’ Bills relating to pregnancy, family leave and pay, providing for an extension of rights for employees –

  • The “Carer’s Leave Bill” proposes a one week’s unpaid leave allowance to employees who are providing or arranging care and protection from a detriment or dismissal for taking such time off. The bill can be found here:
  • The “Protection from Redundancy (Pregnancy and Family Leave) Bill” provides for an extension of rights for women for protection from redundancy after pregnancy. It is anticipated that the protection will be in place from the point a woman informs her employer of her pregnancy in writing until 6 months after she has returned from maternity leave. The bill can be found here:
  • The “Miscarriage Leave Bill” provides for a right to paid bereavement leave for employees who have suffered a miscarriage. The bill can be found here:
  • The “Neonatal Care (Leave and Pay) Bill” seeks to provide parents with rights to paid time off in the event their baby requires neonatal care. The bill can be found here:
  • The “Fertility Treatment (Employment Rights) Bill” proposes to provide employees with paid time off for undergoing fertility treatment. The bill can be found here:

Flexible Working: The New Default?

Undoubtedly, the Covid-19 pandemic has had a substantial impact on the way in which we work and has shown that employers can adapt by offering more flexible and remote working options. With more employees working from home than ever and many employers moving out of office spaces, the Government has sought to review the current legal requirements for employees to request flexible working.

The Government are supporting the “Employment Relations (Flexible Working) Bill”, which proposes:

  • Scrapping the requirement of 26-weeks qualifying employment service to be eligible to request flexible working, thereby allowing employees to make a flexible working request from day 1 of their employment.
  • A requirement for employers to consult with employees who make a flexible working request prior to deciding the outcome.
  • Requiring employers to respond to any flexible working request within 2 months.
  • Allowing employees to make 2 flexible working requests a year, as opposed to the current 1 per year restriction.

The Parliamentary Bill, “Employment Relations (Flexible Working)”, can be found here:

Holiday Pay

Following a recent land-mark decision on holiday pay, the Government has launched a new consultation into the way in which employers calculate payment of holiday pay to irregular hours or part-year workers. The current position, following the Supreme Court decision is that, regardless of hours worked, each worker is entitled to 5.6 weeks holiday pay per annum, where the weekly pay is worked out at an average of the past year’s earnings during the weeks that they worked and excluding those that they did not. It is anticipated the Government will seek to reverse this decision and allow employers to revert to using the previous pro-rata method or the conformity principle.

This is even more important as we are patiently awaiting the Supreme Court’s ruling on an important case relating to historic payments of underpaid holiday pay. Currently, if there is a gap of more than 3 months between periods of underpayments, the employee is considered to have lost the right to claim this back. This upcoming decision will determine whether the Courts will “do away” with this rule which is likely to lead to a surge in back dated holiday pay claims – and many commentators believe that they may.

Protection from Harassment

The Government has confirmed support for extending the protection of workers from harassment in the workplace in the “Worker Protection (Amendment of Equality Act 2010) Bill”. The Bill proposes to place a more proactive duty on employers to take “reasonable steps” to prevent sexual harassment of their employees by making employers liable for harassment by third parties. If implemented, the Bill will have a significant impact on sexual harassment obligations in the workplace.

The bill can be found here:

Overall, there are some ambitious changes on the horizon and, if implemented, will result in wider rights for employees and more strenuous obligations on employers to accommodate those rights.

This article is for general information only and does not constitute legal or professional advice. For further information and bespoke specialist advice contact our employment law team at or call 01495768932

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