Employment Law Updates

May 2023 saw four new laws be given Royal Assent, the final stage in the process to make a law. Whilst there will still be time until these laws will be given an implementation date (the date form which they will be effective), all four of these new laws represent a significant change in employee rights, and impose new duties on employers that they much now get to grips with the. 

The new laws are as follows: 

Carer’s leave – “Carer’s Leave Act 2023”

This Act give employees with caring responsibilities the legal right to take five days’ off each year to carry out those responsibilities for someone who is old, has a disability or an illness/injury lasting more than 3 months. The days will be unpaid and can be taken in full days or half days.

This is likely to be implemented in April 2024. 

Neonatal leave – “Neonatal Care (Leave and Pay) Act 2023”

This Act gives parents of babies who need to go in hospital, for at least seven consecutive days and in the first 28 days of their life for neonatal care, extra time added to their maternity, paternity and shared parental leave.

This will have the effect that for every week the baby spends in hospital, the parents will get an extra week added onto their leave, up to maximum extra 12 weeks. Due to the complex nature of shared parental leave, it remains to be seen how this will apply to that particular type of family friendly leave.

This is likely to be implemented in October 2024, as HMRC and employers will need time to adjust their payroll systems in order to accommodate a new type of statutory pay. 

Protection from redundancy for new parents – “Protection from Redundancy (Pregnancy and Family Leave) Act 2023”

This Act will require employers to offer pregnant employees, and those who have come back from maternity, adoption and shared parental leave until 18 months after the birth/adoption, a suitable alternative vacancy during a redundancy exercise. Currently in place for the duration of maternity leave, this is a significant extension of this right. 

The Act also creates new rights of unfair dismissal and discrimination if these employees are not favoured above all others in the redundancy exercise

This is likely to be implemented in April 2024, or sooner.

Tips – “Employment (Allocation of Tips) Act 2023”

This Act imposes a new duty on employers to pass over any tips/gratuities/service charges to workers. Employers will also be legally required to have a policy that says how they allocate tips, and this should be in line with a statutory code of practice (yet to be created), and 

 keep records on how tips are allocated. Workers will have the right to see the records employers keep on theses, and make a claim to tribunal should they believe that tips are not being allocated fairly by their employer. Employers will face a 

maximum £5000 compensation for doing it wrong.

This is likely to be implemented in April 2024.

Introduction of the Employment Bill:

The UK government has proposed the Employment Bill, which is expected to be introduced in 2023. The bill aims to address various aspects of employment law, including flexibility in working hours, improved support for working families, and measures to prevent workplace discrimination. Detailed information regarding the bill's provisions will be provided once it is enacted.

Rolled up holiday pay:

Currently this is unlawful, but it poses minimal risk as any pay under it will be offset against any holiday pay due by a tribunal if a claim was made. However, the outcome in Harpur Trust was to remove the ability to use the 12.07% method to calculate holiday entitlement, which is central to the calculation of rolled up holiday and means there is now a greater risk in using this method. However, the consultation on Harpur Trust (for which we are still awaiting a response) outlined the government’s plan to allow the 12.07% method, making rolled up holiday pay easier for employers should these reforms come in as proposed. 

The government plans to introduce rolled up holiday pay in law, so workers can receive holiday pay with their every payslip, rather than at the time holiday is taken. This means adding money onto every hour of pay to represent holiday pay, and then not paying the worker when they actually take leave.

What to do now 

• Employers will need new policies will be needed for carer’s leave and neonatal leave, and managers supplied with guidance to understand how the systems work. However, until the regulations that implement these new laws have been created by the relevant secretary of state, what must be included in these policies is unclear. 
• Related policies will need to be reviewed to include neonatal leave, such as the maternity leave policy and paternity leave policy, because they will be so intertwined with neonatal leave. As above, until the regulations have been published what may need to be changed remains unclear. 
• Current redundancy policies and procedures will need a review to include the extended protection, as changes may need to be made and introduced inline with the yet to be announced implementation date. 
• A new policy on tips for hospitality employers will be needed; it will be an absolute legal requirement. Once the Code of Practice has been released, employers will have more guidance on what this policy must contain. 
• Hospitality employers will need to know what the Government standard on ‘fair allocation’ of tips is and they may need to change practices to comply. Again, the new Code of Practice is expected to clarify this.