The current legal framework
Currently, the Employment Rights Act 1996 and the Flexible Working Regulations 2014 govern flexible working requests.
Under these legal frameworks, employees can make a statutory flexible working request provided that they have 26 weeks' continuous service with their employer. To do so, the request must (i) be written and dated, (ii) state that it is an application made under the statutory procedure, (iii) set out what change is sought and its intended start date, (iv) explain what effect (if any) the employee believes the change would have on the employer and how the effect could be dealt with, and (v) state whether the employee has previously made a flexible working request and when. Relating to this final condition, only one flexible working request can be made in any 12 month period.
Once such a request has been made, an employer has three months to make a decision, although this time frame can be extended with the employee's consent. Under the existing framework, there is no legal requirement for an employer to consult with the employee (rather the employer must deal with the request in a "reasonable" manner). However, the Acas Code of Practice (the "Code") does suggest that a discussion with the employee should be held in the event the employer does not intend to approve the request. Whilst the Code is not a piece of legislation, it is a statutory code and Employment Tribunals must consider it when hearing related claims.
An employer can only refuse a flexible working request for one or more of the following 8 reasons:
- 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
- Planned structural changes
If the statutory process is not followed, employers risk Employment Tribunal claims being brought against them and successful claims can result in a compensatory award equalling up to eight week's pay (subject to a statutory cap which is currently £643 per week totaling a maximum of £5,144.00).
However, changes to flexible working are on the horizon. This comes as no surprise, given that recent years have seen a notable shift in ways of working and attitudes towards traditional working habits, together with an increasing desire for a better work-life balance and a drive to improve diversity and inclusion across industries.
Reform to legislation
The Government has introduced the Employment Relations (Flexible Working) Act 2023 (the "New Act") which received Royal Assent on 20 July 2023 and will therefore become law, likely in 2024 to enable time for employees and employers to become aware of the changes and prepare for them.
The New Act brings changes to the flexible working request processes. Such changes are:
- Employees can make two requests, as opposed to one, in any 12 month period.
- The time frame for employers to make a decision on a request is reduced from three to two months (as before, employees can agree to an extension).
- Employees must consult with the employee about their request before refusing it (what constitutes a "consultation" for these purposes remains unclear).
- The requirement for the employee to state what effect the change would have on the employer and how the effect could be dealt with is removed.
What has not changed is the requirement for employees to have 26 weeks' service in order to make a flexible working request. It is expected that secondary legislation will be introduced in due course which would allow employees to make a flexible working request from day one of their employment.
In light of the changes in legislation and modern ways of working, Acas are in the process of updating the Code regarding how employers handle statutory flexible working requests made by employees. The consultation period closed on 6 September 2023 with Acas now reviewing responses. As such, we anticipate the updated version of the Code along with Acas' non-statutory related guidance.
Employers should familiarise themselves with the updated Code and related guidance, alongside the New Act and any secondary legislation, to ensure compliance with new flexible working processes and can access the draft Code here.
It should be remembered that flexible working is not a right in itself, rather the right is to make a request for flexible working. Employers will remain entitled to reject a request provided that one of the eight reasons for refusal, as set out above, are satisfied. Nonetheless, the new laws aim to provide employees with more flexibility over their working practices and the updated Code "seeks to encourage a more positive approach to flexible working" as confirmed by Acas.
Despite the changes in this area, opinion on flexible working remains divided. Many employers and employees note the benefits of flexible working such as better workplace morale, higher productivity levels and a more diverse and inclusive workplace. Some even believe that the New Act does not go far enough to reflect modern working practices. Whilst others favour more traditional ways of working and believe that being physically present in a set environment alongside colleagues improves team morale and allows for easier and more frequent communication. Those who take this latter viewpoint may not welcome the New Act and intended updates to the Code.
Whatever your viewpoint, should you require our advice or support with any flexible working matters, please do not hesitate to contact us.
Authored by Megan Dickenson