What’s on the employment agenda for 2023?

Upcoming legislative changes will require employers to approach flexible working requests differently - employees will have the right to ask for flexible working from day one of employment and, if an employer cannot accommodate such a request, they will need to discuss alternative options before they reject it. It is also likely that several private members bills relating to the extension of redundancy protection on the return to work from family leave, introduction of paid neonatal leave and a new (unpaid) carer’s leave will progress through Parliament, after the Employment Bill which originally included these proposed changes fell down the government’s agenda. We await clarification on the minefield of calculating holiday entitlement for part-year and irregular hours workers in light of the current government consultation on the issue. We also await the findings of the ICO consultations on monitoring workers and processing workers’ health data. We expect to see more consultations and reform proposals as the deadline for the automatic repeal of EU-derived law (unless it is replaced by, or restated in, national legislation) approaches at the end of the year. This deadline may be pushed back but, if and when it takes effect, this could lead to significant changes in areas currently governed by the Working Time Regulations, TUPE and the Agency Worker Regulations.

In addition to this legislative upheaval, we anticipate the below issues to be firmly on HR agendas in the coming months:

Industrial strikes

Companies and their workforces have been feeling the effects of national train strikes for a number of months already and it looks like these will stretch into 2023. In addition, many schools across the country will be closed again when teachers continue their strike action in March. Companies are likely to find that many employees may be unable to travel into work, or unable to work at all due to caring responsibilities, on affected days. What is the best approach for employers to take in these circumstances?

There is no legal requirement to provide paid time off, but employers may wish to consider their response in the wider context of the cost of living crisis and skills gap shortages. Employers will want to bear in mind:

• Employees with one year of service and who have, or expect to have, responsibility for a child are eligible for parental leave. However, this may be unattractive or unworkable for some employees as the leave is limited to 18 weeks per child in total (until they reach 18 years old) so parents with young children may feel they need to take such leave sparingly and, in any event, there is a limit of four weeks per year which may not cover all of the strike-related disruption. For parents of non-disabled children, leave must be taken in blocks of one week so an application for one day’s parental leave would lead to a deduction of a full week’s parental leave. In reality, uptake under the statutory scheme tends to be relatively low because many employees are not aware it exists or, if they are, the above restrictions and the fact it is unpaid are off-putting. However, employers may vary the statutory default scheme, for example, by introducing their own non-contractual policy or reaching a contractual agreement with individual employees.
• Other options include allowing employees to take annual leave (and perhaps reducing the usual notice requirements in order to accommodate such requests where it is not practicable for employees to request time off in advance), agreeing one-off changes to working patterns and permitting working from home.
• It will be important for employers to take a reasonable and fair approach to this issue across the whole workforce and try to ensure that policies do not inadvertently disadvantage a particular group of employees who may have, for example, a protected characteristic. In some circumstances, this may require dealing with certain employees on an individual basis.

Continued hybrid working

The effects of the Covid-19 pandemic will continue to shape ways of working in 2023 - the movement from traditional office based working patterns to more hybrid, or even fully remote, working models appears to be here to stay. Depending on your business and other issues such as real estate requirements and facilities overheads, this may be a blessing or a curse. In any event, employers may want to pause now to consider the below issues:

• Do your employment contracts and policies need to reflect this new way of working? For example, do you have a home-working policy that clearly sets out employee’s obligations in respect of confidentiality, health and safety and allocation of any associated costs? Employers will also need to be aware of their health and safety obligations and ensure that any access rights that they might require to discharge such duties are covered in any relevant policy.
• Now is the time to regularise any ad-hoc arrangements that were put into place during the pandemic. For example, do you have any employees who are still working abroad? If so, have you fully considered any immigration, tax and/or employment law risks this may create? If you want to change employees’ current working locations or patterns, is this just a matter of communication or is there a legal requirement to consult with employees and obtain their consent?
• The permissive approach to workplace and patterns that many employers had to take during the pandemic may have led to an attitude shift in your workforce, meaning that you are receiving more frequent requests to permanently change working patterns or locations, or apply for temporary authorisation to work from elsewhere in the UK or abroad. Do you have a standard approach in responding to such requests? Often requests to work temporarily from abroad or split time between countries will require a careful, bespoke assessment of the tax and employment law issues that this may create.

Cost of living crisis

As the cost of living crisis takes hold, employers may be wondering what they can do to help their workforce. In-work poverty is a serious issue in the UK, with 61% of working age adults in poverty living in a household with at least one working adult (statistic from Joseph Rowntree Foundation UK Poverty 2023 report Proportion of working-age adults in poverty who are in working and workless households | JRF). Financial worries can negatively affect work performance, productivity and employees’ physical and mental wellbeing.

We know this is on many employers’ radars. Some of the steps that employers are taking include financial interventions (e.g. pay rises, one-off bonuses, creation of hardship funds), improving benefits packages and considering other non-financial interventions (e.g. provision of drinks and meals, installing fridges and/or basic cooking facilities so employees can bring food from home, financial education such as alerting staff to scams and providing debt advice and financial counselling). In order to identify what changes might be most effective, employers may consider surveying employees to gain insights into their concerns and current financial wellbeing, subject to any applicable data protection principles. Employers will also need to carefully consider the tax and other regulatory implications of introducing new benefits or financial interventions. Employers will need to ensure any conditions linked to new benefits are made clear and, if they are intended to be temporary in nature only, this will need to be clearly documented to mitigate the risk of inadvertently creating contractual obligations.

Employers may also want to consider how changes to their working practices might alleviate financial pressures for their workforce. For example, employers who engage employees and workers with irregular hours may want to consider ways to reduce the unpredictability of their working patterns and reconsider any barriers that may prevent these workers taking additional jobs to supplement their income. Employers may want to revisit existing policies, or introduce new ones, including:

• Flexible working policies which permit working from home and/or flexible “off peak” working hours and provide homeworker allowances may cut commuting, childcare and energy costs.
• Employee financial wellbeing policies. These are likely to become more common as employees increasingly turn to employers for support. Such policies outline financial wellbeing resources on offer and help employees navigate ways in which they may be able to alleviate financial burdens and seek help if needed.

Employers can also consider how managers and HR can help:

• Increased focus on progression routes and training so that workers and employees are encouraged and incentivised to progress to higher paid roles
• Training to help spot changes in employees’ behaviour that may indicate they are struggling financially.

Concluding thoughts

Whilst managing a workforce naturally presents challenges, 2023 is already shaping up to be a significant year for employers in terms of legislative change and social pressures. With the above issues likely to continue for some time into the year, it may be worth employers taking some time now to consider how to react to these challenges and, where possible, proactively engage with these topics to ensure that policies, strategies and communications can be put in place to help employers and employees navigate these issues.