A more flexible workforce in the post-pandemic world? HMG thinks so.

Written by JMW LLP

Flexible working has been a hot topic ever since the pandemic hit in March 2020, and a large proportion of the workforce has become used to either full remote working or the concept of a flexible working pattern. Historically, many employers have set their working conditions and it is seen as a pre-condition of employment to comply with the business’ practices. More than ever, we are seeing employees want flexibility for a variety of reasons, whether it be in relation to their hours, days, or place of work. The Government consultation paper entitled ‘Making flexible working the default’ and the progressing Private Members Bill called the ‘Employment Relations (Flexible Working) Bill’ aims to modernise the current flexible working laws introduced in 2014.

What is the current regime?

The right to flexible working is contained within the Employment Rights Act 1996 and the Flexible Working Regulations 2014.

Under the legislation, any employee (apart from specifically excluded types of workers) who has 26 weeks’ continuous service can make a flexible working request. They can only make 1 request within a 12-month period, and they must detail the nature of their request as well as the expected effect on the business. Upon receipt of the request, employers have to reasonably consider the proposal and provide an outcome within 3 months of the request being made. If the employer denies the request, then they will need to specify the reason being on 1 of the following 8 grounds:

• the burden of additional costs;
• detrimental effect on ability to meet customer demand;
• inability to reorganise work among existing staff;
• inability to recruit additional staff;
• detrimental impact on quality;
• detrimental impact on performance;
• insufficiency of work during the periods the employee proposes to work; or
• planned structural changes.

There are also requirements in relation to the employees’ right to appeal the decision.

What has the Government suggested?

The Government has responded to calls for reform in the area. For example, the Chartered Institute of Personnel and Development (‘CIPD’) called for flexible working to be a ‘day one’ right at the height of the pandemic.

On 5^th December 2022, the Government released its response to the consultation on flexible working. They emphasised that the proposed reforms do not change the fundamental basis of the current laws, specifically that employees have a ‘right to request’ flexible working rather than a ‘right to have’ flexible working. Any change which allows employees a right to have automatic flexible working would be too weighed in favour of employee rights, and disregard many businesses’ needs to determine working hours, days, and times.

The Government’s response has stated the following changes to current regime:

1. The right to request flexible working will exist from day 1 – Instead of needing 26 weeks’ continuous service, employees can make a flexible working request from the first day of employment. This is the headline change of the Government response.
2. Employees can make 2 requests in any 12-month period – Currently, employees can only make 1 request within the 12-month period. The change reflects the fact that many employees’ circumstances may change more frequently than once a year.
3. Employers must respond to the request within 2 months instead of 3 months – Shortening the response time is a logical change, as many business will comfortably be able to meet with the employee to discuss their request, fully consider the proposal, and provide a detailed outcome within 2 months.
4. Employees will no longer be required to state the business effects resulting from their flexible working request – The Government understands that new employees requesting flexible working may not be fully aware of how their employer may deal with their request, and that it is not necessary for the employees to detail this. Moving forwards, this will be something that the employers should be considering.
5. Employers must consult with their employees regarding alternative options if the request cannot be accommodated in its proposed form – This is a rational change as the exploring of alternatives often happens in practice. Employers may not be willing to accept a request in its suggested form due to one of the 8 grounds above, but they may agree a certain change to the employees’ working pattern as a compromising measure. The Government response does not go as far as requiring businesses to outline the consideration of alternatives in writing to the employee.

Importantly, the 8 grounds for refusal of a flexible working request have not been changed. The Government likely concluded that businesses still require specified reasons to refuse requests, even if employees can bring such requests sooner and in a more simplified manner.

What effect do we think this will have on businesses?

We believe that employers will respond well to these changes. In practice, many businesses consider flexible working requests on an informal basis and provide response well within a 2-month period, and consider any alternatives which the business can accommodate. If the Government had instead introduced a more fundamental right for employees to have flexible working, then employers would have taken issue with such.

The Government has rightly considered modern practices in light of a post-pandemic mindset shift of many employees, and their desire to work on a more flexible basis. However, the changes are reasonable and do not place unnecessary burdens on businesses.

Interestingly, it seems that the Government response is likely to be implemented sooner than anticipated as is supporting the Private Members’ Bill entitled ‘Employment Relations (Flexible Working) Bill’. The Bill will reach the Report stage on 24^th February 2023 and includes nearly all of the Government’s conclusions. The only exclusion from the Bill is the day 1 right to making a flexible working request. Supposedly, this will be introduced through secondary legislation is the Private Members’ Bill passes.

In what way can the Government consultation paper and the Private Members Bill affect Employment Tribunal claims?

Under the current statutory scheme and outlined in section 80H of the Employment Rights Act 1998, employees can make Tribunal claims for procedural failings by their employer. They can bring complaints on the basis that the procedure was not followed in line with the statutory requirements, that the request was not given proper consideration, that the outcome was not provided on a true understanding of the facts, and that the outcome was not based on one of the 8 grounds. The compensation for failure of the employer to comply with the scheme’s requirements is 8 weeks’ pay. This is unlikely to change as a result of proposed changes.

With the proposed changes, the bigger risk still remains of claims of discrimination and claims for unfair dismissal if employees are dismissed or resign. Employees will be able to cite discrimination, unlawful detriment, and even automatic unfair dismissal resulting from their employer’s actions in handling their flexible working requests. If discrimination claims are successful then the compensation can exceed the statutory cap for unfair dismissal claims, as  well as an award for injury to feelings. It is therefore quite clear that the risk of unfair dismissal and/or discrimination claims is greater than the risk of employees bringing claims under the statutory scheme, where a maximum award is 8 weeks’ pay.

Should the changes go through, and employees will be able to make double the number of requests within a 12-month period, then this opens up the possibility of increased Tribunal claims and greater risks of not handling a request in line with the enhanced rights. The 8 grounds for refusing a request has not changed, so employers will still be able to rigorously defend their reasoning for the refusal and challenge Tribunal claims.