Stephen Morrall and Sophia Smout examine the new rules on flexible working in People Management

Stephen and Sophia’s article was published in People Management, 30 January 2023, and can be found here. 

Flexible Working: the new rules

Introduction

Since 2014, employees have had the right to apply to their employer to change the contractual terms of their employment relating to their hours, times and place of work.

The encouragement of flexible working was promised in the Conservative party’s 2019 manifesto. In September 2021, partly also in response to the COVID-19 pandemic, the government released a consultation entitled ‘Making flexible working the default’. The results were released in December 2021, with eighty-three per cent of responses coming from individuals, and the remaining seventeen per cent from 144 businesses of varying sizes. In December 2022, the government unveiled its plans for implementing the consultation’s proposals which involve the introduction of the Employment Relations (Flexible Working) Bill (which has reached the Report stage in the House of Commons), the publication of new guidance and a promise of further consultation.

What is proposed?

The proposed changes are as follows:

1. Making the right to request flexible working a ‘day-one’ right, rather than only being permitted after 26 weeks of work;
2. Prohibiting employers from rejecting an application without having discussed the flexible working requests and explored other options with employees;
3. Enabling employees to make two flexible working requests in any 12-month period, rather than just one;
4. Shortening the period for employers to respond to flexible working requests from three to two months;
5. Removing the requirement for the applicant to explain the potential impact on their employer and suggest ways these effects could be mitigated;
6. Raising awareness that the current law does not prohibit an employee applying for the right to work flexibly for a temporary period only. In due course, the government also plans a further call for evidence on how ‘informal flexibility’ (where ad hoc flexible working is permitted without formally changing the employment contract) works in practice.

What was the reaction?

Ninety-one per cent of respondents, including many large employers, responded favourably to the ‘day-one’ right proposal. However, some notable business figures, including entrepreneur James Dyson and Gail’s Bakery chairman Luke Johnson, have been vocal in their opposition, criticising the apparent foregone conclusion that flexible working should be the default, and saying that it will reduce productivity and deter investment.  Kevin Hollinrake, the small business minister, told Parliament on 5 December 2022 that the proposed ‘day-one’ right would ‘encourage early conversations’ between employers and employees.  A number of mostly smaller- and medium-sized businesses objected that such ‘early conversations’ could instead cause early friction between parties, if the employer denied a request or was forced to reopen contract negotiations immediately after someone had started work. The government’s response has been to put the onus on employers, advising them to consider flexible working ‘in the job design, recruitment and appointment phases’, rather than during the employee’s first days but it is not proposing to introduce a rule about this. Also, the rules do not apply to job applicants, so an employer is not required to consider an applicant’s request for flexible working, but will be faced with a problem if it receives one on the first day.

In line with Confederation of British Industry recommendations, the proposals aim to enable those with care responsibilities or disabilities to return to work or change jobs more easily.  Abolishing the current 26-week qualifying period facilities this. In addition, allowing an employee to make two flexible working requests in any rolling period of 12 months will also benefit employees whose personal circumstances have changed. The decision to scrap the requirement for the employee to make a business case for the change is also sensible and acknowledges concerns raised by the Equality and Human Rights Commission that certain employees, such as those who are junior or have learning difficulties, would be at a disadvantage if required to do this compared with those who are more senior or skilled.

It is important to remember that employees have a ‘right to request’, and not a ‘right to have’, flexible working and the employer is still able to reject a request on one of the eight existing business-related grounds. Sixty-three per cent of employer respondents felt that this was the correct approach, whilst others felt that the reasons should be extended, to allow greater protection in the event that individual and business needs clash. Dyson’s concerns, published by The Times on 8 December 2022, centred largely on the loss of collaboration and sheer inefficiency which remote working during lockdown caused for his company. His criticism of the proposals was echoed in August 2022 by JPMorgan CEO Jamie Dimon, who commented that remote working in particular ‘slows down honesty and decision-making’. Furthermore, there have been apparently few considerations of the impact which flexible, and in particular remote, working has on transport and catering providers, who rely on commuter footfall to boost their revenue.

Conclusions

Flexible working should be regarded as a good thing to have, but there seem to be two problems in the mix. One is the need for the government to frame employment law so as to promote efficiency in the workforce, reduce barriers to entering work or changing jobs, and encourage employers to allow people with a genuine need, such as working parents, carers, the disabled and other disadvantaged groups, to work flexibly without imposing additional onerous administrative burdens. The other is what Dyson called the superficial attractions for individuals in the short term of working from home and the potential damage that having a dispersed workforce can have on a business. It remains to be seen how businesses will embrace the changes in the flexible working rules and how the government will balance their needs with those of individuals.