Since March 2020, there has been a dramatic shift toward home working and flexible hours. This was initially born out of necessity in the context of the lockdown restrictions in response to COVID-19. However, as we enter 2022 it is clear that the clock cannot be turned back and that many businesses have now moved to flexible working for the long term.
In a sense, it is now for the legislation to catch up. On 23 September 2021, the Department for Business, Energy and Industrial Strategy published a consultation document, "Making Flexible Working the Default", which proposed various reforms to the right of employees to request flexible working. This included making the right to request flexible working a "day one" right, removing the requirement for 26 weeks' qualifying service. It is anticipated that a new Employment Bill, which we expect to see introduced in 2022, will make flexible working the default unless employers have a good reason not to allow it. This was on the agenda even before the changes wrought by the pandemic. Many employers will already be prepared for this change as they are embracing flexibility with hybrid working practices. It appears that for many workers the option to work flexibly is now an expectation. In a market with numerous unfilled vacancies, many employers perceive flexibility as an aid to recruitment, retention, wellbeing and performance so are not waiting for legislative change.
Another upcoming change within the proposed Employment Bill is the anticipated introduction of a right to one week's unpaid leave for unpaid carers. Regardless of any legislative change, employers should always ensure that they are making reasonable adjustments for both disabled employees and employees who are carers for disabled people, so that they are not exposed to claims of disability discrimination, which can include associative discrimination.
Reform on contractual terms
It is anticipated that the Employment Bill will also introduce a new right for all workers who have 26 weeks' service to request a more predictable, stable contract. This will include those who work variable hours (for example, those on zero hours contracts and agency workers) and is intended to provide these workers with more certainty regarding the number of hours or days they will be required to work.
The UK government has also consulted on a proposal to extend the ban on exclusivity clauses beyond zero hours contracts, so that it covers contracts where workers' guaranteed weekly income is less than the Lower Earnings Limit (currently £120 a week). This consultation closed in 2021 but no further action has been scheduled. It is expected that this may come back on the radar in the course of 2022.
Employers should be mindful of these potential reforms and try to stay in charge of the way any changes might affect their organisation. As formal legislative changes are introduced, employers should review their employment contracts, policies, procedures and training to ensure that they do not fall foul of any new requirements.
Employment and ESG
In recent years, there has been a noticeable shift in the way businesses approach social responsibility. Environmental, social and governance criteria (ESG) has made its way up the priority list for many employers over the last decade. This trend accelerated even further in response to the pandemic, which has shone the spotlight on the "S" or social measures against which companies are measured.
Pay equality and transparency is an important part of these social measures. In 2019, there was a UK government consultation on ethnicity pay gap reporting. In May 2021, the government announced that it was still considering its response which will be published in "due course" due to "genuine difficulties in designing a methodology that will produce accurate figures that facilitate analysis, interpretation and meaningful action".
It is not currently clear when (or if) legislative change to mandate ethnicity pay gap reporting can now be expected, especially against the backdrop of the continuing pandemic and pressures on parliamentary time. However, many companies are already voluntarily going wider than their strict legal obligations on pay reporting, including reporting their ethnicity pay gap as part of their ESG and diversity commitments. This transparency shows accountability and commitment to improvement, which can benefit reputation, employee satisfaction and productivity. Proactive employers who do not currently report on their ethnicity pay gap could consider their overall approach to this and how they might collect the relevant data, to ensure they are in control of the process and will be in a position to comply with any future legislation.