20 Dec 2021

Back in September, the UK Government launched a public consultation exercise on “Making Flexible Working the Default”, which included suggested areas for reform to the statutory flexible working regime.

In this article, Dominic Holmes, Harry Abrams and Shelley King examine the proposals and set out an alternative approach for making the system work better for employers and employees.

What are the rules right now?

Currently, employees with at least 26 weeks’ continuous service have a right to request flexible working arrangements. They are limited to one request per 12-month period. The employer should consider the request in accordance with the principles set out in the ACAS Code of Practice: Handling in a Reasonable Manner Requests to Work Flexibly. It must provide a formal response within three months (unless a longer period is agreed) including any appeal if offered.

If a request is rejected, it must be for at least one of eight specified business grounds: (i) the burden of additional costs; (ii) detrimental effect on ability to meet customer demand; (iii) inability to re-organise work among existing staff; (iv) inability to recruit additional staff; (v) detrimental impact on quality; (vi) detrimental impact on performance; (vii) insufficiency of work during periods the employee proposes to work; or (viii) planned structural changes.

If the request is accepted, the employee’s contract is amended accordingly. In practice, it is common for employers to agree to flexible working on a trial basis, before any permanent changes are made to the employment contract.

Some employers will have flexible working policies or guidelines that go further than the statutory regime.

In addition, many businesses now operate a hybrid working model (subject to Government COVID guidance), with varying degrees of autonomy for their staff to perform work either in the normal workplace or remotely. They may take a relaxed approach, allowing employees to choose when and where they work, as long as business need is met. Others provide more limited flexibility, with presence at work expected or mandated for a certain minimum period (say, at least 2 days per week in the office) or during core hours. Those who wish to operate outside of those parameters need to make a formal flexible working request in the normal way.

The Government proposals

The Government’s stated objective is “encouraging conversations that support genuine two-sided flexibility, which can bring benefits to both individuals and businesses through greater employee motivation, a reduction in staff turnover and recruitment costs, and increased productivity”.

Read the full public consultation here: Making Flexible Working the Default.

With that in mind, it has sought views on four possible areas for reform:

  1. Day 1 rights: Should employees be entitled to make a request from the first day of employment, rather than having to wait 26 weeks?
  2. 8 business reasons: Does the current list of business reasons available to an employer for refusing a flexible working request remain valid?
  3. Duty to suggest alternatives: Should an employer be obliged to put forward possible alternative flexible working arrangements, if the employee’s request is refused?
  4. Process reforms: Should an employee be permitted to make more than one request in any 12-month period? And does the 3-month period for an employer to respond to the request remain appropriate?

Our view

Overall, we consider the Government’s proposals well-intentioned. However, we believe that some of the proposals could be modified to encourage the best quality dialogue at the right time, without placing undue burdens on employers.

There is certainly merit in refining the current system, to meet the needs of employers and employees in a working environment that has been re-shaped by lockdown restrictions.

In our experience, many employers have already embraced greater flexibility, in light of the mass compulsory working from home experiment that millions of us undertook last year. They rightly see it as an increasingly valuable tool in attracting and retaining the best talent. However, this is not universal and a minimum base-line statutory regime that is fit for purpose is still needed.

It is also important to remember that flexible working is not defined by our COVID experience. It extends beyond questions of where and when we work. It can encompass a wide range of other arrangements including compressed hours, job-sharing and phased retirement plans.

Our main conclusions are as follows:

  1. Flexible working should be open for consideration at the recruitment stage, rather than on Day 1 of employment.

We agree that the minimum qualifying period of 26 weeks’ continuous service should be removed. However, we think that a better approach is to develop a framework under which flexible working arrangements can be considered pre-employment, rather than waiting until employment starts.

We are concerned that a Day 1 right may have unintended consequences, to the detriment of both employer and employee. Some individuals may accept a role with working arrangements that do not suit them – and then make a request on Day 1 to have them changed. This places undue burden on an employer to consider a request that will disrupt the business planning they have put in place, based on the original terms agreed with the employee. It makes it more likely that the request will be refused, when it might well have been accepted if raised earlier.

Under our proposals, a job candidate should have the right to request flexible working during the recruitment process. If accepted, there should be the option of a three-month trial period. The employer can still reject the request if at least one of the eight business grounds applies, but could be required to reconsider it after three months of employment.

Once employment has started, the right to request flexible working should be suspended for three months.

A job candidate should also have a legal remedy, if they can show that they have been rejected for a role because they made a flexible working request. An employer would be able to defend any claim if it can show that it complied with the ACAS Code and at least one of the eight business reasons applied.

  1. Employers should not have a legal duty to suggest alternatives, but can be required to go further in demonstrating why they have refused a request

We think an appropriate balance needs to be struck between allowing the employer to maintain relative freedom in how it operates its business and providing an appropriate framework for proper consideration of flexible working requests.

In our view, placing a positive duty on employers to suggest alternative flexible working arrangements goes too far. Equally, we recognise the current regime only requires an employer to cite one of the eight broadly-defined business reasons, without doing much more. This does not set the right tone for encouraging constructive dialogue about flexible working, when such arrangements may be mutually beneficial in many cases.

We suggest that an employer should be asked to demonstrate that its decision was rational by pointing to some evidence to support it, at the time the request is refused. It would also be reasonable to expect the employer to explain the factors it took into account or disregarded, as part of the decision-making process. If an employee indicates that they would be interested in a discussion around possible alternatives, this can be included in the overall process.

  1. One request per year is an appropriate limit, although there should be an exception where the employee’s circumstances have materially changed.

There is nothing wrong in principle with a limit of one request in any 12-month period. It provides an employer with appropriate certainty and avoids them being inundated with repeated requests.

However, we recognise that some employees may be prevented from making further requests, even where they have an urgent (or perhaps temporary) need for flexibility due to a material and unforeseen change in their personal circumstances. This may result in a valued employee needlessly struggling on (with a detrimental impact on their performance or productivity) or perhaps leaving employment altogether, where this could have been avoided.

Therefore, it seems reasonable to allow one further request per year in such cases, on an exceptional basis. Such “material changes” could relate to childcare arrangements, wider caring responsibilities or the employee’s own health.

  1. Employers should aim to consider and respond to a request within two months, but with the option to extend to three months if it can demonstrate that more time is needed.

Setting a standard time limit for responding to a flexible working request is difficult.  In some cases, a sudden change in an employee’s personal circumstances may mean that a request needs urgent consideration. Conversely, three months does not seem unreasonable where an employer may be minded to grant the request but needs time to make other business arrangements to accommodate it.

In our experience, most sensible employers will seek to expedite the process where they can. However, a three-month period does give scope for an employer to delay considering the request, rather than engaging with the employee promptly and using the full period to explore its viability (and any alternatives).

Therefore, we have suggested a requirement for employers to respond as soon as reasonably practicable but no longer than two months, with flexibility to extend to three months if it can demonstrate that it needs more time to engage with the employee and consider the request fully. This is analogous to the rules that apply for responding to data subject access requests (although the time limits themselves are different).

A full copy of our response to the consultation is available here.

Dominic Holmes is a Partner and Head of the Employment Team at international law firm Taylor Vinters. He writes and presents regularly on a range of strategic employment issues and has a particular interest in the future of work. Alongside Harry Abrams and Shelley King, he prepared Taylor Vinters’ response to the UK Government’s consultation on flexible working reform.