28 September 2023
The government is introducing a ‘day one’ right for all employees to request flexible working. This has come at a time when business demands have returned to pre-pandemic levels and hybrid working models may no longer be appropriate for some employers who require their staff back in the office.
Facing a forced return to the workplace may encourage employees to exercise their legal right to request flexible working so that they can continue to manage their personal commitments. This means that employers will need to prepare for an increase in flexible working requests and this will require employers to conduct a review of their flexible working processes, building them into the recruitment process in readiness for the proposed ‘day one’ right.
In this article, we address the upcoming changes to flexible working legislation, the key legal considerations for employers and how they can best prepare for the changes.
What’s changing and when?
In addition to the ‘day one’ right to request flexible working, the Employment Relations (Flexible Working) Act 2023 (‘act’) introduces further changes which could make it easier for employees to secure flexible working arrangements. They include the following:
- employees will have the right to make two flexible working requests in a 12-month period (rather than just one);
- employers will have a reduced period of two months to decide on a flexible working request (currently they have three months to communicate their decision to employees);
- there will be an active requirement on employers to engage in meaningful consultation with employees before making a decision on a flexible working request (which is not currently a legal requirement); and
- there will no longer be a burden on employees to explain the impact their flexible working request will have on the business and how they might overcome it.
Currently there is no set date for the act to be passed and for the new legislation to be implemented however we expect this to take place in 2024.
Can employers reject a flexible working request?
An employer can only refuse a flexible working request if one or more of the eight prescribed statutory grounds apply and as mentioned above, they will soon be legally required to consult with employees prior to rejecting a flexible working request.
These are all business-related reasons and are set out below:
- the burden of additional costs;
- a detrimental effect on ability to meet customer demand;
- inability to reorganise work amongst existing staff;
- inability to recruit additional staff;
- detrimental impact on quality or performance;
- insufficiency of work during the periods the employee proposes to work; and
- planned structural changes.
Under the current regime, the burden is on the employee to account for how their employer might deal with the effects of their flexible working pattern. However, under the new upcoming legislation this burden will shift to the employer, putting additional pressure on businesses to justify the rejection of a flexible working request.
In preparing for the changes, employers should carefully consider those roles within the business that can be performed flexibly and those that can’t. Clear objective justifications should be noted for those roles that can’t be worked flexibility and they must correspond to the eight prescribed business grounds. Employers should be prepared to explain those reasons in consultation meetings. Being prepared for flexible working requests and having justifications on record for flexible working in certain roles will put employers in a stronger position to address multiple flexible working requests and ensure that decisions taken are consistent and fair. Failure to do so exposes the employer to several risks.
What are the legal risks?
If an employee’s flexible working request is rejected, they may feel they have been treated unfairly. This could occur where another employee is performing a similar role flexibly or if the employee feels their request wasn’t considered properly and the reason given to reject the request doesn’t align with one of the eight business grounds. In this situation, an employee could pursue a grievance alleging a breakdown in trust and confidence and/or discrimination.
Why could this potentially amount to discrimination?
Where employees of the same sex, race or religion are disadvantaged because of an employer’s practice or decision when compared to those who are not of the same sex, race or religion, this amounts to indirect discrimination unless the employer can objectively justify it. For example, women who statistically are more likely to be responsible for childcare, could argue that a rejection of their flexible working request puts them at a disadvantage when compared to men.
Mitigating the legal risks
Having clear processes in place for managing flexible working requests, properly considering which roles can be performed flexibly and applying this rationale consistently across the business will help employees understand why their request has been rejected and reinforce a defence against allegations that an employee has been treated unfairly. This may also avoid appeals and grievances, mitigating the legal risks if an employee chooses to pursue breach of trust and confidence claim.
To mitigate the discrimination risks, employers should also ensure that they have objective grounds for refusing the request, that those grounds can be justified, and they have been balanced alongside the potential discriminatory effect of the rejection. This is likely to require further consultation with the employee to consider other ways of supporting them with flexible working.
How can employers best prepare for the new ‘day one’ right?
The introduction of a ‘day one’ right for all employees to request flexible working means new recruits could immediately make a flexible working request, causing a huge administrative burden for employers.
To prepare for this change, employers should consider whether flexible working is applicable to a particular role at the recruitment stage by evaluating the business need for the role and how it fits into the wider business. Reviewing internal recruitment processes to build in this assessment and openly addressing them during recruitment, will help employers to manage ‘day one’ flexible working requests quickly and effectively.
Expectations for the role and whether it can be performed on a flexible or hybrid working basis should also be discussed with the employee during the recruitment process. This will help build a common understanding at the outset and limit any early speculative flexible working requests.
In preparation for the change, policies will need updating to ensure they remain fit for purpose. Controls over who can approve flexible working requests should be considered to ensure there is consistency and fairness across the business.
What are the global mobility considerations?
The pandemic and advancement of technology has accelerated global remote working and many businesses have taken advantage of hiring from a much wider talent pool. Employers may also be allowing employees to work abroad for extended periods. Whilst there are several advantages to a global workforce or offering employees the flexibility to work abroad, employers should be aware of the tax implications when employees work abroad. This was explored in the Office of Tax Simplification report on hybrid and distance working published in December 2022. We explain the tax risks with global remote working in our article 'Global remote working and global business travel: how do organisations manage the risks'.
If employees are based abroad for an extended period, they could also be entitled to employment rights in the jurisdiction they are working in alongside any employment rights they have in the UK. There could also be immigration, data security and health and safety considerations.
Employers with employees overseas should always seek appropriate legal and tax advice to manage the global mobility risks.
In preparation for the changes, it would be sensible for employers to review their current procedures on flexible working and train their managers on how to deal with requests fairly and consistently. This will mitigate the legal risks and will ultimately help reduce the administrative burden on employers. When the ‘day one’ right is introduced, this will require fundamental changes to businesses recruitment processes to manage the additional administrative burdens.
If you are an employer and would like support on managing a flexible working request or preparing for the upcoming changes, please contact Jennifer Mansoor.