The World of HR in 2023 – What to expect
It would be fair to say that the end of 2022 was a turbulent time for the UK and our economy. An energy and cost of living crisis tagged on to the end of a worldwide pandemic was not really…
Blog10th Jan 2023
It would be fair to say that the end of 2022 was a turbulent time for the UK and our economy. An energy and cost of living crisis tagged on to the end of a worldwide pandemic was not really what we wanted or needed in our personal lives nor in business.
It would seem that we have experienced further changes in 2023 with some wide-ranging changes to UK employment law. We have looked at a few of the changes so far in 2023 below and will continue to update you throughout the year.
Brexit: Proposed Changes to Existing EU Law
As a consequence of Brexit, the UK government is seeking to address many of the EU laws we currently continue to live by. Introduced in September 2022, the EU Retained Law Bill proposes to remove thousands of individual articles of legislation by the end of December 2023. If passed into law this year there would be a significant impact on workers’ rights and employment law, as many EU laws protect these particular areas. Despite the significant impact and no clear solution in sight, the bill continues to move through the stages of parliament. Whilst there are no firm details as of yet, we will have to wait and see what will come of the proposed changes and the impact this will have on everyday workers and businesses across the UK. This is something we will be watching very closely over the next 12 months.
Proposed changes to UK Law: Flexible Working
The Employee Relations (Flexible Working) Act 2023 has successfully passed through Parliament and received Royal Assent on 20 July 2023. The UK government has announced legislative changes that will remove barriers for employees who wish to request flexible working. In this context, flexible working does not only refer to ‘hybrid working’ (splitting working time between the office and another location, generally the employees’ home), but also encompasses other flexible working options including, but not limited to, job-sharing, flexitime and working annualised or compressed hours.
The 2023 Act has made a number of changes to the current flexible working law. These are:
- Permitting employees to submit two flexible working requests within a 12 month period;
- Introduction of mandatory consultation between employer and employee to discuss flexible working request;
- Shortening response timeframe to to 2 months; and
- Removal of the requirement for the employee to explain the impact of the change on the employer and how that could be dealt with.
One of the key changes which was proposed is that employees will have the day one right to request flexible working whereas currently, the legislation states that employees must have at least 26 weeks’ continuous service before they can make a flexible working request. Although this was expected to feature, this has not yet been passed, and the Government has since confirmed that they will introduce secondary legislation to support this, which could take approximately one year.
The legislative changes are likely to impact millions of employees and should bring greater flexibility for both employees and businesses. Whilst the benefits to employees are clear, businesses will also benefit. Flexible working contributes to creating a more diverse workforce through the removal of invisible barriers, and a more diverse workforce and work environment has shown to have a positive financial impact on businesses.
Almost a 10% increase to the National Living Wage
As the cost of living is at the forefront of everyone’s mind, this increase came as a much-welcomed change for employees. The National Living Wage rate for 2023 went up by 9.7% or 92p to £10.42 per hour for people aged 23 and over. This represents an annual pay rise worth over £1,600 to full-time workers. The 9.7% increase is reflected in all other national minimum wage rates apart from 21-22 age rates which has increased by 10.9%. These changes took effect in April 2023.
This increase was commended by the Living Wage foundation as a benefit for the whole country, not just employees, with the Director of the foundation stating ‘employees earning a decent wage are likely to be more productive and able to spend in their local economies.’ This increase also reduces the gap between the National Living and the Voluntary Real Living wage, and could encourage more employers to become accredited Real Living Wage Employers.
The increase, although a much-needed boost for low-paid workers was yet another increase in costs for employers. Whilst no one could argue that employees need the rise to meet increasing costs, it has meant that employers are having to review their headcount and their hiring plans in 2023. Again, we would be happy to chat with any employer with concerns regarding pay increases and look at ways we could support you to move forward.
What lies ahead
To conclude, it’s fair to say we have had another unsettling year for employers. Whilst each of the above employment law changes is undoubtedly positive in many ways, there are ultimately be consequences for employers.
We will keep you up to date with the above and any other changes to employment law across the year. If you have any questions on the above, please do not hesitate to get in contact with or your usual AAB People contact.