What’s happening in employment law in Northern Ireland in 2023?

04 January 2023

With the continuing lack of a functioning Executive and Assembly in Northern Ireland, employment law remains more or less in stalemate. That said, the active post-Brexit reform agenda impacts Northern Ireland and the decision in an important holiday pay case is expected. Here’s our annual round-up of what to expect.

Post Brexit reform: the Retained EU Law (Revocation and Reform) Bill

This is the most significant development on the horizon in Northern Ireland (NI). This UK-wide bill aims to speed up the removal of certain retained EU laws by giving ministers powers to revoke or replace them. Importantly, it also includes a “sunset clause” meaning that, at the end of 2023, many retained EU laws will disappear unless restated or replaced. This potentially affects a huge amount of employment law including the Working Time Regulations, TUPE, the Agency Workers Regulations, the age and sexual orientation regulations and more.

It is reasonably likely that the 2023 deadline will be relaxed before the bill passes. Even if the deadline slips, we expect to see government departments in Great Britain (GB) getting started on shaping the reform programme from early this year. This is likely to mean a wave of consultations and proposals for creating new laws to replace and potentially scale back existing EU-derived versions. How NI fits into this remains to be seen, given there is no functioning Executive or Assembly in NI. However, NI will be impacted by any changes to UK-wide law, like TUPE (insofar as it implements EU law).

The potential significance of this bill should not be underestimated; it could result in the biggest shake-up of employment laws across the UK in a generation. It’s also rarely the case that quick law equals good law, so expect to see plenty of troubleshooting and legal challenges as we get to grips with the new developments.

For more details, see What might the Brexit Freedoms Bill mean for employment law in Northern Ireland?

GB private members’ bills: impact in NI

A significant development across in the water in GB are the number of private members’ bills making their way through the parliamentary process, heading towards becoming law in 2023. Some of these bills introduce employment law reforms which were originally going to be included in the GB Employment Bill.

The proposed GB reforms include changes to the flexible working regime, the introduction of 5 days’ unpaid carer’s leave each year for employees who have dependants with a long-term care need and the introduction of a new right to neonatal leave and pay giving new rights to paid time off to parents whose babies spend time in neonatal care units. For more detail on these and other GB bills, see Government backs new laws on carers, sexual harassment, flexible working, redundancy protection and our GB article on what’s happening in employment law in 2023?

The bills introducing carer’s leave and neonatal leave and pay are intended to extend to NI. However, it will be up to the Assembly to decide whether to actually implement similar provisions to deliver each scheme in NI and there are no plans for these at present.

Modern Slavery Act: to be toughened up?

The UK government has previously said that it would toughen up the Modern Slavery Act (which applies to employers with a turnover exceeding £36m) to make existing reporting areas mandatory (rather than advisory), change the reporting deadline to 30 September each year, and require statements to be published on a new registry. A new bill, which includes some UK-wide provisions, was expected in the current GB parliamentary session but has not been brought forward yet.

Gender pay gap reporting

Legislation providing for gender pay reporting is in place in NI but hasn’t yet been brought into force. There won’t be any progress until the Assembly is restored and even then, some employers may be out of scope assuming that the requirement will apply to employers with 250 or more employees, as is the case in GB and not extend to employers with 50 or more employees, which is a 2025 requirement in the Republic of Ireland (ROI). Employers who are in scope should note that when the requirement does apply in NI, they will be required to carry out disability and ethnicity pay reporting, as well as gender pay reporting. For more detail, see gender pay gap reporting in Northern Ireland.

Parental bereavement leave

Since 6 April 2022, employees in NI have been entitled to two weeks’ paid leave (it is paid provided they meet certain eligibility criteria) following the loss of a child from the 24^th week of pregnancy, or the death of a child under the age of 18. Statutory parental bereavement pay is administered in the same way as existing family-related statutory payments such as maternity, paternity and adoption pay. This brings NI in line with the existing rights in GB. Following consultation (which concluded on 19 December 2022) and agreement on subsequent regulations, these provisions are to be extended to include working parents who suffer the loss of a child through miscarriage. We may see some movement on this in 2023. For more detail, see parental bereavement leave introduced in Northern Ireland.

Domestic abuse leave

Employees in NI who are victims of domestic abuse will be entitled to 10 days’ paid leave each year to deal with issues relating to the abuse. This is a ‘day one’ right meaning that no minimum period of service for qualification is required. This right is not yet effective (employers don’t currently have to provide this leave) as the commencement date of the new right remains to be confirmed. Regulations are also expected, which will set out details of how the leave will work. Employers can, however, take steps within their businesses to prepare for this by creating an environment where employees feel they can disclose that they are experiencing domestic violence. For more detail, see domestic abuse leave introduced in Northern Ireland.

Zero-hours workers

Draft legislation was introduced in the Assembly before it was dissolved providing enhanced protection for zero-hours workers (ZHWs) – these are workers on a contract where there is no guarantee that they will be given any work. The aim of the draft legislation is to provide a less precarious working environment for ZHWs. One of the key provisions is the banning of exclusivity clauses (terms in a contract which prevent ZHWs taking on other work). While the progress of the legislation depends on the Assembly being restored, it’s one for employers with ZHWs to keep an eye on. For more detail see consultation on banded hours contacts and enhanced rights for zero-hour workers in Northern Ireland.

School teachers

Previously, the recruitment of teachers in NI was exempt from legislation prohibiting religious discrimination. Practically, this meant it was not unlawful for schools to discriminate against someone in the recruitment process on the basis of their religious belief. This exception was repealed in May 2022. The change is to be effective by May 2024, unless it is brought into force earlier.

National Living Wage rises by nearly 10% and other increases to rates and limits

The National Living Wage (NLW) will rise to £10.42 from April 2023, an increase of 9.7%. This is the largest increase to the NLW since its introduction in 2016 and reflects the steep rise in inflation and cost-of-living crisis. Employers may find they employ more people on the cusp of NLW rates and therefore may need to pay greater attention to NLW compliance. The current rates for the NLW and the National Minimum Wage are set out here.

Statutory sick pay will go up to £109.40 in April (from the current rate of £99.35) and the weekly prescribed rate of statutory maternity pay (and pay for other types of leave) will be £172.48 (up from £156.66).

The increase in the weekly pay rate used for statutory redundancy payments and other purposes and the 2023 revised basic and unfair dismissal amounts have not yet been announced.

Extra bank holiday

There will be an extra bank holiday on Monday 8 May 2023 to mark the coronation of King Charles III. As with the extra day for Queen Elizabeth’s funeral, this does not automatically mean that everyone gets the day off. In NI there are 10 usual bank holidays, with a range of practice applying in relation to these holidays depending partly on the industry sector and partly on geography. Potentially, there may also be religious or political opinion discrimination issues associated with giving, or not giving, this bank holiday.

Caselaw decisions to watch out for

The most anticipated court decision in NI in 2023 is that in Chief Constable of the Northern Irish Police v Agnew. This relates to the calculation of holiday pay and whether a 3-month gap between underpayments of holiday pay extinguishes a claim. It will also address whether leave can be disaggregated as Working Time Directive, Working Time Regulations and contractual leave or whether all leave is a combination of different types of leave. The appeal was heard by the Supreme Court in December and a decision is awaited.

Keeping an eye on what’s happening in GB, some key cases employers should watch out for are as follows:

IWUGB v CAC (whether Deliveroo riders have freedom of association rights given their lack of employment relationship);
Bailey v Stonewall, Higgs v Farmor’s School, Mackereth v DWP (these all concern the rights of people to manifest so-called “gender-critical” views. The “clashing of rights” in the workplace looks set to continue as a theme for 2023, following high-profile cases last year, including in the Forstater case);
Manjang v Uber Eats (whether Uber’s usage of facial recognition system amounted to indirect race discrimination);
Kocur v Angard (the rights of agency workers to be considered for vacancies);
HMRC v Professional Game Match Officials (whether HM Revenue and Customs were right to have determined that match officials should be taxed as employees);
Mercer v Alternative Future Group (on whether an employer may take action short of dismissal against workers who have gone on strike);
R v Northern Derbyshire Magistrates Court (on the liability of administrators to file a Form HR1 in the context of proposed collective redundancies); and
USDAW v Tesco (whether employees may secure an injunction to stop them being dismissed and offered reengagement on inferior terms).

Other trends and policy areas to watch

In the meantime, employers are likely to remain focused on how to support their staff through the ongoing cost-of-living crisis. Strike action and threats of strike action are also likely to affect unionised employers, where NI hasn’t reformed industrial action law in the same way as GB. Many employers will be embarking on redundancy or restructuring programmes. However, alongside the economic downturn, there is an ongoing skills shortage and battle to attract good people, which James Davies, Partner at Lewis Silkin, referred to in his “Eight drivers of change – 2022 and beyond report”. We can therefore expect to see ongoing efforts to “do the right thing” and create the right culture, with menopause policies becoming mainstream, fertility policies gaining traction, and employers under continuing pressure to embrace flexible and remote working including remote working from overseas locations. Will climate and sustainability feature more highly on the employer agenda? We hope so.