Changes on the horizon – Government consultation on flexible working

In its 2019 Conservative Manifesto, the Government committed to promoting flexible working and, subject to consultation, introducing measures to help ‘make flexible working the default’ unless employers have good reasons not to offer flexible working.

Now the government has published its consultation paper seeking views on a range of measures intended to imbed greater flexibility across all workplaces, including opening up the right to request flexible working to all employees regardless of length of service. We look at the proposals and what they may mean for employers.

What changes is the government considering?

The key proposals outlined in the making flexible working the default consultation are:

• making the right to request flexible working a day one entitlement – instead of requiring 26 weeks’ continuous service as is currently the case
• looking at whether the eight business reasons employers can give for refusing a request all remain valid
• if an employer cannot accommodate a request for flexible working, requiring the employer to think about what alternatives they could offer
• considering whether employees should be allowed to make more than one flexible working request a year
• considering whether to cut the current 3-month period that an employer has to consider any request to a shorter period
• how to encourage more employees to utilise their ability to request a temporary flexible working arrangement.

Under the plans, it is estimated that around 2.2 million more people would be given the right to request flexible working.

The consultation will look at a range of flexible working methods such as job-sharing, flexitime, compressed, annualised and staggered hours, as well as phased retirement – not just working from home.

Many employers will be relieved to see that the Government’s proposals are less prescriptive and wide-ranging than might have been anticipated, but nonetheless, if some of these proposals become law employers are likely to see an increase in both the number of flexible working requests they receive and the administrative burden of dealing with them. This is against a background of employers already seeing a greater demand for flexibility from employees brought about by the pandemic.

A recap on the current position on flexible working

The current position (as discussed in our article ‘COVID-19: Post-pandemic flexible working’ earlier this year), is that there is no automatic obligation on employers to allow employees to work flexibly. Despite the title of the consultation, the consultation does not propose to change this fundamental position.

Employees with at least 26 weeks’ continuous employment can make a request to work flexibly under the current flexible working regime. The request must be in writing, explain what change to the employee's working arrangements is being requested and explain the potential impact on the business. Employees are only able to make one request within a 12-month period.

These requests must be dealt with in a reasonable manner which includes giving reasonable consideration to the request and notifying the employee of the employer's decision within a reasonable time and no later than 3 months after the date of the request. If an employer wishes to reject a statutory request, it can only do so on one or more of the following grounds:

1. the burden of additional costs;
2. detrimental effect on ability to meet customer demand;
3. inability to reorganise work among existing staff;
4. inability to recruit additional staff;
5. detrimental impact on quality;
6. detrimental impact on performance;
7. insufficiency of work during the periods that you propose to work; or
8. planned changes.

Although compensation for non-compliance with the rules, or for a decision based on incorrect facts, is capped at eight weeks' pay (up to a maximum of £544 per week), an employer who refuses a request may also face the risk of unfair dismissal, sex discrimination and/or victimisation claims (with compensation for discrimination claims being uncapped).

Looking at the proposals in more detail

Making the right to request flexible working a day one right

Currently, an employee with less than 26 weeks’ continuous service is not entitled to make a statutory request for flexible working. The proposal is to change this so that all employees can make a statutory request for flexible working from the first day of their employment.

Looking at whether the eight business reasons employers can give for refusing a request all remain valid

The current law provides a specific but wide-ranging set of eight business grounds on which employers can reject statutory requests to work flexibly. The government does not see a case for fundamentally changing these grounds, but is seeking views on this.

Requiring the employer to suggest alternatives, where possible

To encourage a culture where employers give full consideration to requests for flexible working and what might be possible – rather than simply rejecting the proposal which has been put forward – the government is exploring how practical it is to ask employers to set out, when rejecting a request, that alternatives have been considered. For example, if an employer cannot accommodate a particular part-time working pattern, they might consider an alternative.

Possible changes to the rules around how often flexible working requests can be made and the deadline for employers to consider them

Currently an employee may make one statutory request every 12 months and an employer has three months to consider whether that request can be accommodated.

The government is considering allowing employees to make more than one request for flexible working per year. This is to ensure that the legislation is not placing unnecessary barriers to accessing flexible working among those whose personal situation may have changed within twelve months.

The government is also seeking views on whether the three-month deadline for employers to respond to requests is still suitable or should be cut. The consultation paper invites views on a range of possible timeframes from ‘less than two weeks’ to the current three-month period.

Requesting a temporary arrangement

The current flexible working regime already provides for a temporary arrangement to be agreed between the employee and employer. However, the government believes that this ability to request a contractual change for a defined, time-limited period is under-utilised.

For example, it would be possible for a parent to request a change in working pattern so that they could support their child’s transition from early years care into school. Such contractual changes would be considered a request under the legislation as long as the start and end of the period was defined at the point of making the request. The government is seeking views on what would encourage employees to make time-limited requests to work flexibly.

What could the proposed changes mean for employers?

1. It is important to note that these proposed reforms do not give employees the right to work flexibly and do not change the fundamental position that the right is merely a right to request, rather than right to work flexibly. The government’s clear position is that employers should continue to be able to reject requests where there is a sound business reason to do so.
    

2. Although employers are required to handle requests reasonably, there is no proposal to introduce a reasonableness test when it comes to looking at the employer’s decision on whether or not to grant a request. The Acas Code of Practice can be taken into account by a tribunal when considering relevant cases, but this only requires employers to handle a request in a reasonable manner, rather than imposing a test of reasonableness in deciding whether or not the employer should grant it. 
   
   Had this consultation paper contained such a proposal, this would have been a significant change for employers, since they would have to show that the reason(s) they relied on to turn down the request  was reasonable.  Instead, the position remains that the real teeth lies in the ability for employees to bring discrimination claims should an employer pay lip service to their obligations. A point highlighted below.
    

3. The changes – if they go ahead – would likely place a greater administrative burden on employers by increasing the number of flexible working requests they receive, given there will be a greater number of employees entitled to make statutory flexible working requests and they will potentially be able to make more than one request a year. A day one right may also mean employers considering statutory flexible working requests from employees who are still in their probation periods (which tend to be three to six months’ long) and whose suitability of ongoing employment is still being considered.
    
4. The possibility of employers having to deal with requests in a shorter timeframe and explore alternative options will similarly increase the burden on employers. However, many employers already explore alternative options as part of considering a request. The risk of indirect discrimination claims being brought where a request is refused mean that employers will want to ensure they can demonstrate objectively the business reasons why the job must be performed in a particular way – and doing so is likely to involve some consideration of the viability of alternatives where the original request cannot be accommodated.
    
5. Given that employees have a statutory right to appeal a refusal of a flexible working request, they are less likely to appeal (and to pursue an employment tribunal claim) if a compromise is found, or a trial of the requested flexible working arrangements undertaken. This may also put the employer in a better position to defend any claims as it will be able to refer to live examples to support its case.

Be aware of the discrimination risk

All flexible working requests – whether under the current or proposed regime - need to be handled carefully and given proper consideration by employers. The recent case of Mrs A Thompson v Scancrown Ltd T/a Manors is a stark reminder that irrespective of the proposals, the potential exposure in respect of a successful indirect discrimination claim related to a flexible working request can be significant.

Mrs Thompson was a highly remunerated Sales Manager at an independent estate agent. Following a period of maternity leave, Scancrown Ltd refused her request to work flexibly to suit her childcare needs; specifically, to work four days a week, and to finish at 5pm instead of 6pm. Despite Scancrown citing five of the statutory grounds for refusing a request and conducting an appeal process, Mrs Thompson’s indirect sex discrimination claim was successful. Her employer was unable to evidence that refusal of the request on the grounds relied on was proportionate to the business need to maintain successful relations with customers.

Mrs Thompson was awarded over £180,000 in compensation. The total sum was significantly more than an employee can receive for a breach of the right to request flexible working legislation (which is capped at eight weeks’ pay (and up to a maximum of £4,352).

Proposals not going ahead

The government does not believe that now is the right time to introduce a statutory requirement for employers to say in job adverts whether flexible working is available, which is something that was under consideration. Also, plans to require large employers (250+ employees) to publish their flexible working policies appear to have been shelved.

Responses to the consultation can be submitted by 1 December 2021, either:

• Online at: https://beisgovuk.citizenspace.com/lm/flexible-working
• By email to: labourmarketparticipation@beis.gov.uk

Please speak to a member of the employment team or your usual Clyde & Co contact if you have any questions or would like advice on flexible working requests.