Key Developments in UK Employment Law in 2023

As we near the end of the first month of 2023, we summarise they key developments in Employment Law we expect to see during 2023.

New Rules on Carrying Over Annual Leave During COVID-19 Crisis

New Rates for Statutory Employment Payments

On 28 November 2022, the Department of Work and Pension (DWP) published its annual rate increases for 2023/24. All of the new rates will take effect on or around the start of the tax year on 6 April 2023.

  • Statutory maternity, adoption, paternity, shared parental pay will increase to £172.48 per week on 2nd April 2023 (up from £156.66).
  • Statutory sick pay will increase to £109.40 per week on 6 April 2023 (up from £99.35).
  • The minimum weekly amount an employee needs to earn to qualify for these will remain at £123.

New National Living Wage and National Minimum Wage Rates

Having accepted the Low Pay Commission’s proposed increases to the national living wage (NLW) and national minimum wage (NMW), the new rates from 1 April 2023 will be:

  • Age 23 or over (NLW rate): £10.42 (up 9.7% from £9.50)
  • Age 21 to 22: £10.18 (up 10.9% from £9.18)
  • Age 18 to 20: £7.49 (up 9.7% from £6.83)
  • Age 16 to 17: £5.28 (up 9.7% from £4.81)
  • Apprentice rate: £5.28 (up 9.7% from £4.81

Retained EU Law (Revocation and Reform) Bill 2022-23

The intended purpose of the Bill is to repeal, amend or replace thousands of EU laws and regulations that were initially retained when the UK left the EU in January last year and will provide the UK Government with the means to update previously retained EU legislation via Parliament. Included in the Bill is a “sunset” provision that could potentially see all EU-derived subordinate legislation and retained direct EU legislation implementing EU law (regulations) scrapped entirely on 31 December 2023 unless otherwise preserved.

The introduction of the Bill could see changes to:

  • The Working Time Regulations
  • The Agency Workers Regulations
  • The Part-time Workers Regulations
  • The Fixed term Employees Regulations
  • TUPE (but only insofar as it implements EU law)
  • The Information & Consultation of Employees Regulations
  • Various Health & Safety regulations
  • The Maternity & Parental Leave Regulations

Trade unions and industrial action

The government is seeking to introduce measures to reduce the disruption caused by industrial action. The Transport Strikes (Minimum Service Levels) Bill 2022-23 was presented to Parliament in October 2022 and if passed, will require minimum service levels in transport services during industrial action (see Practice note, Transport Strikes (Minimum Service Levels) Bill). The government has suggested that it might extend the legislation to other services.

Employee data protection

The government has announced its intention to replace the UK GDPR with a British data protection system, which will be introduced by means of amending the Data Protection and Digital Information Bill.

Human Rights Act 1998

In June 2022, the government introduced the Bill of Rights Bill 2022-23, which aims to repeal the Human Rights Act 1998 and create a new domestic human rights framework around the European Convention of Human Rights (ECHR), to which the UK will remain a signatory. After being dropped by Liz Truss’s government, the Bill of Rights Bill is now reported to resume its passage through Parliament.

Employment Bill

It was previously announced that the Employment Bill would be the vehicle for introducing these long-awaited measures. However, in December 2022, the Business Secretary, Grant Shapps, confirmed that there is no Employment Bill “on the cards per se”.  Instead, the government is supporting Private Members’ Bills that reflect some of the commitments that were expected to be included in the Employment Bill.

Potential legislative developments that were expected to be in the Employment Bill that are reflected in these Private Members’ Bills include:

  • Flexible working
  • New duty to prevent sexual harassment
  • Extending redundancy protection for women and new parents
  • Tipping, gratuities, cover and service charges
  • Neonatal leave and pay
  • Leave for unpaid carers
  • Single enforcement body for the labour market
  • Confidentiality and non-disclosure agreements
  • Dismissal and re-engagement

We discussed some of these key developments in more detail previously in the following blog articles:

The Retained EU Law (Revocation and Reform) Bill Announced

 New National Living Wage & National Minimum Wage Rates from 1 April 2023 

 UK Government Confirms Flexible Working Will Become a Day One Right 

Do You Need Assistance?

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UK Employment Law Will Not Be Devolved to Scotland

The UK Government has confirmed that there are no plans to devolve UK employment law to the Scottish Administration.

UK Employment Law

Current Legal Position on UK Employment Law

Reserved matters are political powers – legislative or executive – that are held exclusively by a particular political authority, usually in multi-national states such as the United Kingdom of Great Britain and Northern Ireland, or in federal countries like the United States of America, Canada and Australia.

UK Employment law is currently a reserved matter in Scotland, under Schedule 5 of the Scotland Act 1998, covering employment (employment and industrial relations, health and safety, non-devolved job search and support).

Will UK Employment Law be Devolved?

On 6 September 2022, a House of Commons debate took place on the devolution of UK employment law to Scotland. Jane Hunt MP, Parliamentary Under-Secretary for Business, Energy and Industrial Strategy (BEIS) confirmed that the government has no intention to devolve legislative competence for employment rights matters to the Scottish Administration.

Key reasons included the following:

  • For the labour market to work most effectively across Great Britain, the underlying legislative framework concerning rights and responsibilities in the workplace needs to be consistent.
  • Devolution could create a two-tier employment rights framework, with Scotland adopting different policy and legislation to England and Wales. This would create a significant burden for businesses operating on both sides of the border.
  • Devolving employment rights could disadvantage workers by suppressing the free flow of labour between England and Scotland.

Will Employment Tribunals be Devolved? 

Devolution of employment tribunals is currently planned to take place and Ms Hunt confirmed that once the Order in Council drafting has concluded, the UK Government and Scottish Administration will look to agree a timeline for devolution of the first tranche of tribunals, but the Ministry of Justice has confirmed that devolution of employment tribunals will not happen before 2025.

What About the Employment Bill?

 Ms Hunt also confirmed that there is an “ambitious legislative programme” including a “comprehensive set of Bills” to enable the government to deliver on its priorities. She pointed to government support given to Private Members’ Bills on tips and neonatal care, legislation extending the ban on exclusivity clauses in contracts and guidance on employment status.  She also referred to the Carers’ Leave Bill, which received its second reading in the House of Commons on 9 September 2022.

When asked why the UK Government is not banning fire and rehire practices, Ms Hunt said that a ban would not be appropriate as in some situations this option can play a valid role and provides flexibility for businesses. She referred to the government’s “proportionate action” to address firing and rehiring by bringing forward a statutory code of practice but did not indicate a timescale for when a statutory code of practice might be introduced.


Confirmation that UK employment law will remain a reserved matter and that the current UK Government appears to have no desire to change that position will undoubtedly be welcome news to employers who operate sites across the UK, but following the recent introduction of the Brexit Freedom Bill (The Retained EU Law (Revocation and Reform) Bill and the significant transformation to workers’ regulations it will incur, the positives of UK employment law remaining a reserved matter will likely be overshadowed.