Are flexible working rights about to change?

What will the new legislation mean for hybrid work?

The consultation document put forward five proposals, namely:

• making the right to request flexible working a ‘day one’ right;
• consider whether the current permitted business reasons for refusing a request all remain valid;
• consider the administrative process underpinning the right to request flexible working;
• requiring the employer to suggest alternatives to what has been requested by the employee; and
• requesting a temporary arrangement.

Rather than making flexible working the default position as was initially promised by the Government, the proposals would merely broaden employees’ rights to request flexible working, and employers will still retain the right to reject such requests on one or more broadly defined reasons.

What rights would it grant employees?

The proposals, if enacted, would not be the ground-breaking change that many were expecting. The main change would be that employees would have the right to make a flexible working request from day one of their employment, rather than first having to accrue 26 weeks’ service under the current legislative framework. But employees would still only have a right to make a request for flexible working, rather than a right to flexible working and employers will still be able to refuse the request on certain broad business grounds.

Unless there is a discussion between employer and employee about flexible working before employment starts, employees who want to work flexibly will have to start working on the basis of their original terms of employment while trying to change them, as there is no right to make a request before starting the job. This has the potential to put a strain on the employment relationship early on, particularly during a probationary period when job security is relatively low. In practice, it’s unlikely many employees will seek to exercise a right to request flexible working at such an early stage of employment.

What would it mean for employers?

Rejecting a request might become more difficult for employers, although this will depend on the extent of the changes made to the eight business reasons currently available to employers under the Employment Rights Act. Employers could be required to suggest, or at least consider, alternative arrangements to those requested by the employee.

The consultation also includes reforming the HR procedure of making flexible working requests. As it stands, employees can only make one request every 12 months and employers have 3 months to consider the request and make a decision. Potentially increasing how often an employee can make a request will somewhat reduce existing barriers to flexible working and would recognise that employees’ personal circumstances can quickly change. Where these changes are temporary, the Government suggests encouraging employees to request temporary arrangements. This option is already available in the current framework, but underutilised.

If a company is absolutely determined to reject a request, we envisage that it will be able to shoehorn its reasons into one or more of the permitted bases for rejection under the new legislation. But it must be prepared to face the consequences. For example, employees who see their requests refused may decide to terminate their employment, particularly as flexible working positions are readily available. Those who stay may grow resentful towards their employer, leading to lower output and quality of work.

What about employment tribunal claims?

Employees are still able to bring employment tribunal claims against their employer if their flexible working request is not handled in line with the ACAS Code of Practice on flexible working requests and/or the request was refused without a valid business reason. The maximum compensation that can be awarded by a tribunal for this type of claim remains distinctly limited, namely 8 weeks’ pay (max £571 per week), which would easily be exceeded by the legal costs of pursuing any claim.

Perhaps more concerning for employers is the potential of opening themselves up to the risk of discrimination claims, the compensation for which is unlimited. Studies have shown that the pandemic has led to women having to shoulder the increased childcare burden. This means that they will likely be able to show that they are particularly disadvantaged by a refusal of flexible working request, especially as they have demonstrated they can work equally as productively from home. The same could be said for those who are disabled who for example, find having to commute very difficult. This is a risk that employers have and will need to continue to be mindful of.

Striking the right balance

Whilst the proposals would increase the likelihood of employees’ requests to work flexibly being approved, it remains a mere right to make a request for flexible working. The proposals do not go far enough to deliver the Government’s promise to make flexible working the default position, and would not bring be a huge shift in the negotiation power balance between employee and employer.

As there is no draft Bill currently before parliament, we await to see the detail or any changes to be made. Narrowing the business reasons available to employers, allowing more than one request per 12-month period and requiring employers to suggest an alternative arrangement would all nudge the power balance very slightly in favour of employees. But it is clear that the proposed legislation means flexible working will fall far short of becoming the default under the Bill.

Many employers already have hybrid working policies in place, meaning that any reform is likely to have limited impact in practice. Whilst employers will clearly benefit form embracing flexible working in terms of recruitment and retention of employees, whether requests can be accommodated will very much depend on the requirements of the business and the nature of the employee’s role, and employers will have a broad range of reasons on which to reject any request if necessary.

From speaking to clients, it’s clear that there’s a balance to be struck between employers who want to see a return to the office and employees who have enjoyed the benefits of working flexibly during the pandemic. Many of our clients are keen to see their employees return to the office to some degree, to make use of the often-expensive office space that they pay for and to maintain the company’s culture, and other benefits of in-person collaboration.

Undeniably though, employers have benefited from flexible working. For example, by not having to relocate to a larger, more expensive office space despite the company’s growth in numbers. To stay competitive in recruiting and retaining the best talent, employers should acknowledge the benefits from hybrid working and enabling employees to work flexibly, such as time and money saved from not having to commute and more flexibility for those with childcare obligations.