Key employment law updates | March 2023

Crop person signing contract

Employment Tribunal Awards increase

On 10 March 2023, The Employment Rights (Increase of Limits) Order 2023 (the "Order") was published. The Order increases the amounts that can be awarded in the tribunal for various employment claims and will apply to all dismissals which take effect on or after 6 April 2023. The table below summarises the changes between the old limits and the new limits on certain tribunal awards and the statutory limit on a week's pay (relevant for both statutory redundancy pay and unfair dismissal basic award calculations).

Type of tribunal awardCurrent rateRate from April 2023
Statutory limit on a week's pay£571£643
Maximum compensatory award for unfair dismissal£93,878£105,707
Maximum basic award for unfair dismissal£17,130£19,290
Maximum basic award for certain automatically unfair dismissals£17,130£19,290

Reminder of increases to National Living and Minimum Wage

Further, and as a reminder, the annual increases to the national living and minimum wage rates will come into effect on 1 April 2023. The following table summarises the various increased rates:

CategoryCurrent rateNew rate from 1 April 2023
23 and over£9.50£10.42
21 to 22£9.18£10.18
18 to 20£6.83£7.49
Under 18£4.81£5.28

Employers should ensure that all employees are paid in line with the new National Minimum Wage rates.

Gender Pay Gap Reporting

A recent study has suggested that the gender pay gap for all employees stands at 14.9%. This means an average woman in paid employment effectively works for free for nearly two months of the year compared to the average man in paid employment.

Only those employers with 250 or more employees on the 'snapshot date' each year (31 March for public authorities; 5 April for other entities) are legally obliged to publish their gender pay gap data. Such employers are required to report their pay gap data within one year of the snapshot date, where enforcement action (in terms of court orders/fines) may be taken for a failure to comply with the same.

Therefore, whilst there is no obligation on smaller entities to publish their gender pay gap data, it may be beneficial to do so to both demonstrate the business' commitment to tackling this issue and, where applicable, celebrating any associated successes. Equality in the workplace and an employer's stance and credentials in respect of the same is becoming increasingly important in terms of recruitment and ensuring businesses are attracting the best talent.

The Government Equalities Office has published detailed guidance to assist employers in publishing their gender pay gap data, which can be utilised by both those who are required to comply and those who choose to report on a voluntary basis. The guidance covers what to include in the report, how to prepare the data and how to make the relevant calculations.

Should you have any questions in respect of the gender pay gap reporting obligations and/or require any assistance in drafting your gender pay gap report, please get in touch with your usual Foot Anstey contact.

Legislative protection against harassment in the workplace

The Worker Protection (Amendment of Equality Act 2010) Bill (the Bill), which proposes to extend the statutory protection for employees from harassment in the workplace, has recently had its second reading in the House of Lords. The Bill's proposals include:

  • Implementing a mandatory duty on employers to take all reasonable steps to prevent sexual harassment.
  • Reintroducing employers' liability for harassment by third parties.
  • Giving Tribunals the ability to award a 25% uplift on compensation where there has been a failure to take reasonable steps to prevent sexual harassment.

There is currently no active duty on employers to take steps to prevent sexual harassment in the workplace, however where an employer can show that it has done so, it may have a successful defence to any sexual harassment claim. Accordingly, employers should already have in place certain measures to prevent harassment; however, the nature and commitment of these measures will have far greater importance should the Bill become law, given that the benchmark for what constitutes "reasonable steps" is likely to be high to ensure the Bill has the intended effect.

The European Human Rights Commission's guidance confirms it expects all employers to have an anti-harassment policy in place which is effectively implemented and to have an appropriate procedure for dealing with harassment, including clear reporting procedures. It is likely that the Bill will expect employers to comply with the EHRC guidance as a minimum.

Employers would therefore be well advised to undertake a review of their current anti-harassment measures and ensure these are as robust as possible; the ability of a Tribunal to increase any sexual harassment compensation award by up to 25% could be significant, bearing in mind compensation for sexual harassment is uncapped.

In addition to the above, the Bill is also proposing to reintroduce an employer's liability for third-party harassment, that is where an employer has been subjected to harassment by, for example, a client/customer, supplier or visitor during the course of their employment. Previously, such liability was only engaged when the employer knew that the employer had been harassed by a third-party (albeit not necessarily the same third-party) on two previous occasions, however under the new proposals, an employer could be liable for a one-off or first act of harassment, unless it can demonstrate that it took all reasonable steps to prevent the same. This further demonstrates the importance of taking a pro-active approach to the prevention of harassment in the workplace.

We have partnered with the Retail Trust to develop a bespoke anti-harassment certification whereby we work with employers to review and improve the measures in place to protect their workers and deal with any complaints of harassment. Should you require any assistance in tackling and reducing harassment in your workplace and/or would like further information about our anti-harassment certification, please get in touch with your usual Foot Anstey contact.