Impact on employers
The government has released its long-awaited proposals for strengthening flexible working rights, but they do not amount to radical reform.
The Conservative Party's 2019 manifesto promised that the party would consult on making flexible working an employer's default position. Since then, of course, the pandemic has forced flexible working on many employers and employees, in particular homeworking and working around the needs of children whose school or childcare arrangements were disrupted. There is evidence of significant unmet demand for more flexible working, and concerns about talent and skills shortages in many sectors. Against that background, calls for more rights to work flexibly have been on the increase.
The government, however, plans only modest reforms. Under proposals released for consultation over autumn 2021, the existing "right to request" framework will be maintained, but employees will have the right to make a request from day one (rather than waiting for six months) and, potentially, the right to ask more often. The existing penalty for failing to deal properly with a request (currently capped at £4,352) will remain in place, although some employees whose requests are refused may be able to claim indirect discrimination, for which there is no upper limit on the compensation recoverable.
Employers will not be required to publish flexible working policies or specify in job adverts whether flexible working would be considered, both of which have appeared in previous proposals.
Under provisions set out in the Employment Rights Act 1996 (ERA), all employees who have worked with the organisation for 26 weeks have the right to ask to change their location, hours and times of work. They can make one statutory request for flexible working each year. Employers can say no, but the refusal must be based on one of eight business reasons set out in the ERA:
- extra costs that will be a burden on the business;
- the work cannot be reorganised among other staff;
- people cannot be recruited to do the work;
- flexible working will negatively affect quality;
- flexible working will negatively affect performance;
- the business' ability to meet customer demand will be negatively affected;
- there is a lack of work to do during the proposed working times; or
- the business is planning structural changes.
An employee can make a complaint to an employment tribunal (ET) where:
- the employer fails to deal with the flexible working application "in a reasonable manner";
- the request is not resolved one way or the other within three months (including time for any appeal);
- the employer has refused the application for a reason other than the statutory grounds;
- the employer's decision to reject the application is based on incorrect facts; or
- the employer has wrongly treated the application as withdrawn.
If the ET considers the complaint well founded it can order the employer to reconsider the application and make an award of compensation of up to eight weeks' pay, subject to the upper limit on the amount of a week's pay (£544 from April 2021).(1)
In the new consultation, the government:
- proposes to make the right to request flexible working a day-one right;
- asks whether the eight business reasons for refusing a request all remain valid;
- seeks views on requiring employers to deal with alternative arrangements when rejecting any request (for example, employers might have to say if they could or could not accommodate a slightly different working pattern to the one requested);
- is exploring whether employees should be allowed to make flexible working requests more often than once every 12 months and whether employers should be required to respond more quickly than the current three-month response time;
- asks if employers and employees are aware of the option for requesting a temporary arrangement (which has never been an explicit option although it is legally possible to agree a temporary request) and asks what would encourage employees to make time limited requests; and
- confirms it will not take forward proposals to require employers of large organisations to publish their flexible working policies on their websites or specify in job adverts whether flexible working would be considered.
The government proposes to reconvene its Flexible Working Taskforce to provide wider advice on best practice, with an immediate focus on the "where" of work, including hybrid working. It also says it will launch a call for evidence looking at the sorts of "extra" flexibility people may need to help them live their lives in the best way they can, exploring the need for "ad hoc" and informal flexibility.
The consultation is silent about the remedies for non-compliance, so these do not look set to change. It is also notable that the consultation says nothing about how refusing flexible working requests can amount to indirect discrimination against women (or other groups with protected characteristics) or, in some cases, a failure to make reasonable adjustments.
Some employers will welcome the government's decision to keep a "right to request" flexible working model rather than introduce "a right to have". Much of the recent media coverage has focused on the idea that employees should have the flexibility they want, with little attention given to whether this can realistically be accommodated across the board. The government itself has recognised in the consultation that a one-size-fits-all approach would not be workable, and that the type of flexibility that might be available will depend on the nature of the role and the needs of the employer's business.
Many campaigners, however, will say that tinkering with the existing regime does not go nearly far enough to make good on the pledge of flexible working as the default. Employers will still not be required to justify the underlying commercial reasons for rejecting the request, and remedies for non-compliance also remain relatively weak, unless the employee also brings a discrimination claim (see below).
Employees will also have to commence working on the basis of original hours, times and location while trying to change them. There is no scope under the proposed framework for employees to apply for flexible working in advance of starting the job, unless employers permit this. Without a discussion about flexibility prior to an offer being made, there is scope for conflict at an early stage in the employment relationship.
Despite the limited change to the "right to request" framework, it is important to remember that refusing flexible working can result in a discrimination claim. Although flexibility is increasingly being sought by both women and men, the evidence from the pandemic showed that women disproportionately shouldered the additional childcare burden. It is likely to remain the case for the foreseeable future that women will relatively easily be able to show that they are particularly disadvantaged by a refusal to allow flexibility because of childcare, opening up the possibility of a discrimination claim.
Perhaps most importantly, although the proposed new rights are limited, the reality is that businesses are already under greater workforce pressure to accommodate post-pandemic flexibility. Some organisations are already offering automatic unlimited remote working, and most other office-based employers are expecting to operate a combination of home and office working. In a recent survey on post-Covid employment policies,(2) none of the survey respondents said they would be requiring all staff to return to their normal workplace five days a week. Around half of the survey respondents are changing job adverts to explain or promote their approach to flexible, hybrid or remote working, which tends to confirm that companies already regard flexibility as key to recruitment. Nearly two thirds of the participants (63%) think flexibility over work location is increasingly important for incentivising staff, with a third (33%) thinking it is becoming just as important as pay/bonus.
Calls for legislative reform will no doubt continue. Tulip Siddiq's private members' bill relating to flexible working reform is due to have a second reading in November 2021. This covers day-one flexible working rights other than in exceptional circumstances, a requirement to offer flexible working in employment contracts, and advertising flexibility in job vacancies. It seems unlikely, given what is proposed in the consultation, that this will overtake what the government is already planning, but it will nonetheless keep up the pressure to go further.
The timing of the proposed reforms is unclear. The government could potentially make the right to request flexible working available from day one by simply issuing new regulations, although other proposals may require a change to primary legislation, so it seems most likely that all the changes would be made together via the long-awaited Employment Bill. The impact assessment published with the consultation suggests that April 2023 may be the earliest that any measures come into force.
For further information on this topic please contact Carolyn Soakell or Gemma Taylor at Lewis Silkin by telephone (+44 20 7074 8000) or email ([email protected] or [email protected]). The Lewis Silkin website can be accessed at www.lewissilkin.com.
(1) Further information is available here.
(2) Further information is available here.