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‘Flexible Working’ feature by Russell Brown

“It’s ironic that the greatest threat to the work/life nirvana, known as flexible working, is equality and inclusion. As The Daily Express warns that at least five mm of snow may settle somewhere or other in the Outer Hebrides, the Marketing Manager may elect to stay at home, tucked up in his Captain Pugwash pyjamas, to “crack on with 2013 budget forecast” whilst a senior counterpart will be trudging through the forecasted flurry, blown in via the “Beast from the East”, to open up a high-street branch for customers. Both will be on, by and large, the same contract of employment and yet one will be able to flex his flexy rights with far greater alacrity than the other. Still in the early stages of what has been widely and warmly welcomed as the idyll, only time will tell how it will play out in terms of engagement, not to mention potential unrest and potential litigation. Practically speaking, how should employers set the framework for flexible working, to ensure that equality is achieved across the diversity of a multi-faceted workforce?”

In May 2011, the Government announced a four-stage plan aimed at creating a “culture of flexible, family friendly employment practices”. As part of this, it launched the ‘Modern Workplaces’ consultation to look at potential changes to the flexible working regime to make it more accessible to employees.

At the moment flexible working is restricted to parents and carers and the Government believes extending it to all employees, irrespective of their caring responsibilities, will help encourage a culture of flexible working across companies. It believes that this will give employees the opportunity to contribute more widely to society and help employers to recruit, motivate and retain their workforce.

The consultation closed last summer and the Government’s response was published in November 2012, confirming its decision to extend the right to all employees from 2014.

In this article Russell Brown, partner and head of employment at Glaisyers Solicitors examines the current flexible working regime and looks ahead to the new system, highlighting the keys changes employers need to be aware of and potential pitfalls they need to avoid.

Current system

At the moment employees with responsibilities for caring for certain children (those aged under 17 or, in the case of disabled children, aged under 18) and adults have the right to request flexible working and can apply for a change in their hours, times or location of work. In order to qualify, employees must have 26 weeks’ continuous service on the date the application is made and have, or expect to have, caring responsibilities for a qualifying adult or child. Employees are limited to one application in any 12-month period in order to limit the burden on employers.

Employees who want to make a flexible working request must follow the statutory request procedure, which imposes obligations on both employees and employers. Employees must set out in writing the change in work pattern they are seeking, the effect the change may have on their employer’s business and how the change might be accommodated.

Upon receipt of a request, employers have 28 days to meet with employees to discuss it. Following this meeting, employers must write to employees within 14 days to confirm the outcome of the request. If the employer agrees to the change, it must confirm the date when the change will take effect. If the employee rejects the application, it must confirm its reason(s) for doing so (see below) and notify the employee of their right to appeal the decision.

Employees then have a further 14 days to appeal and if they choose to do so, employers must meet with them within 14 days of receiving the appeal letter. Following the appeal meeting, employers have 14 days to confirm their decision in writing.

It can be difficult to comply with these time limits, for example if a manager is off sick or on annual leave, so both parties can agree to extend these time periods. In this situation, it is advisable to record the employee’s agreement in writing. Employers cannot unilaterally impose extensions regardless of their reasons for doing so.

As outlined above, employees have the right to request flexible working but not a right to demand it. As a result, there are eight prescribed reasons employers can rely on to legitimately reject an employee’s request:

  • The burden of additional costs
  • Detrimental effect on ability to meet customer demand
  • Inability to re-organise 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.

In Glaisyers’ experience, employers reluctant to agree to requests have not struggled to rely on one or more of the prescribed reasons. As a result, whilst the statutory request procedure may seem a little bureaucratic, in practice it has worked well for employers and any fears they had over their ability to reject requests when the regime was first introduced, have proven to be ill-founded.

New system

As discussed, the Government believes the current right is too restrictive and, in publishing its response to the Modern Workplaces consultation, has confirmed its intention to extend flexible working to all employees from 2014.

It believes the new system will “enable businesses to access a labour pool of experienced and skilled staff, who in turn will be able to find work that fits around their other commitments”.

Under the new regime, the requirement to be a carer or parent will be removed but employees will still need to have 26 weeks’ continuous service to qualify and will be limited to one request in any 12 month period. The Government considered removing or reducing the qualifying period but rejected the proposals on the basis employees will not necessarily have the required understanding of an employer’s business on day one of their employment that would be needed to make a request. They also decided to retain the restriction on the number of requests that can be made in a 12 month period to limit the burden on employers. Proposals were also put forward to exclude micro-businesses (that is businesses with fewer than 10 employees) and start-ups from the extension but this was rejected as the Government did not believe it imposed any additional burden on them and felt they also experienced the same benefits of flexible working as larger employers.

The real changes from an employer’s perspective relate to the procedure for considering requests. Currently employers and employees have to follow the statutory request procedure but, given Government concerns that the system was overly burdensome, it will be replaced with a new duty on employers to deal with requests in a reasonable manner and within a reasonable time period. The Government believes this principle-based approach will give employers more flexibility and reduce the administrative burden on them.

To help employers understand their obligations, a new code of practice is going to be produced. The code will explain the meaning of ‘reasonable’ and give employers guidance and support on flexible working. It will have a statutory basis which means tribunals will have to bear in mind when considering complaints.

The Advisory, Conciliation and Arbitration Service (ACAS) will consult on the detail of the code later this year and will also produce an accompanying best practice guide for employers so they know what the Government considers to be reasonable and how they can meet their obligations. The guide will also include case studies and will sit alongside the code but will have no statutory status.

It is unclear at this stage whether the existing prescribed reasons for refusing a request will be replicated in the new code. It seems from the Government’s response that businesses will still be able to refer back to the reasons when making decisions under the new regime although we will have to wait for the code to be published to be sure.

Concerns have been raised about the new principle-based approach as it relies on a subjective interpretation of ‘reasonableness’ which could easily lead to disputes about exactly what this means. In addition to this, potential difficulties may arise when employers are faced with multiple requests for flexible working from employees with differing circumstances i.e. those with childcare responsibilities and those without. In that situation, employers will need to tread very carefully when refusing a request to avoid potential claims from disgruntled employees that their request was refused because of a ‘protected characteristic’ such as their age, sex, disability etc.

The Government has acknowledged these concerns as part of its consultation process and considered whether additional legislation was needed to enable employers to prioritise requests. In doing so, it looked at the existing legislation governing flexible working and discrimination and decided it was sufficient to enable employers to prioritise requests based on both business needs and individual circumstances. However, it has confirmed that ACAS will create additional guidance to support employers in these situations. This guidance will need to be very detailed to ensure employers do not inadvertently discriminate against employees when dealing with flexible working requests.

Conclusion

The Government’s aim is to encourage a culture of flexible working across UK plc and by moving away from a process-driven approach, reduce the bureaucratic burden on employers. While this is something employers will no doubt welcome, it does give rise to its own potential problems and increases uncertainty for both employers and employees.

For larger employers the changes may have minimal practical impact as they already offer flexible working outside the scope of the statutory right. For smaller employers however, the changes may present more of a challenge. That said, in the current economic climate employees looking to take advantage of the new right to ’contribute more widely to society’ may be limited and therefore employers may not see a significant increase in requests. Ultimately, as with the current system, employers will only be obliged to consider requests and will still be able to rely on genuine business reasons to refuse them.