Flexible working: is more legislation needed?

Laura Chamberlain examines the conflicting responses to the Government’s Modern Workplaces consultation on whether or not the right to request flexible working should be extended.

There has been much debate about Government proposals to extend the right to request flexible working to all employees. Both unions and employer groups seem to agree on one thing: flexible working is good for business. The problem is that, when it comes to how flexible working should be regulated, they don’t quite see eye to eye.

In response to the Modern Workplaces consultation, different groups offered their own unique stances on the proposal to extend the right to request flexible working, which currently applies to parents of children under the age of 17, or 18 if the child is disabled.

The Chartered Institute of Personnel and Development (CIPD) warned against exempting micro-businesses from the legislation and the TUC said that the proposals would actually water down employee rights, while manufacturers’ organisation the EEF argued that introducing legislation would be unnecessarily burdensome for employers.

Risks of extending the flexible working legislation

So what are the risks of extending the legislation on flexible working and is the benefit worth the pain?

The main argument against extending the right to request flexible working to all employees is that it will put an extra administrative and financial burden on businesses, especially smaller ones.

The EEF says that introducing a universal right to request flexible working would increase the burden on employers without delivering any significant benefit to either businesses or employees.

This was echoed in a recent survey by the British Chambers of Commerce (BCC), which found that two-thirds of business owners expect the extension to be detrimental to their business.

And, far from being worth the additional burden, David Frost, former director-general of the BCC, argues that extending the regulation on flexible working is simply not needed.

“Flexible working is already a reality in the UK business community,” says Frost. “If conversations are already taking place in the workplace, and most requests for flexible working are accepted, additional regulation around this is entirely unnecessary.”

Frost adds that this would be the fourth extension to the right to request flexible working since its original introduction in 2002 and it would dent business confidence if introduced.

Work-life balance

However, work-life balance organisation Working Families has a different take on the effect that the extension will have on employers. Rather than denting business confidence, the organisation argues that it could bring multiple benefits, including financial ones, to many firms.

Chief executive Sarah Jackson comments: “Far from costing the earth, the simple extension of flexible working rights to all employees could bring real benefits to families and to business.

“The consultation paper suggests the extension of the right to request flexible working will lead to an estimated £222.5 million net benefit to employers.”

Jackson feels that this figure should be widely publicised in order to help reassure businesses of the benefits of flexible working, which include a reduction in the cost of absenteeism and stress, decreased recruitment and retention costs, and increased performance levels from staff allowed to work flexibly.

While the relative costs or savings arising from flexible working may be in question, there is still much concern over the extra administrative burden the extended Regulations could cause for organisations, especially smaller businesses.

Eight business reasons for refusing an application for flexible working

  • Planned structural changes.
  • The burden of additional costs.
  • A detrimental impact on quality.
  • The inability to recruit additional staff.
  • A detrimental impact on performance.
  • The inability to reorganise work among existing staff.
  • A detrimental effect on ability to meet customer demand.
  • Lack of work during the periods that the employee proposes to work.

Micro-businesses and start-ups

One of the areas looked at in the consultation was whether the extension to the right to request flexible working should apply to employees who work in micro-businesses or start-ups during the moratorium on business regulation for firms with fewer than 10 employees.

The CIPD says that, rather than helping these companies grow by reducing the burden, exempting them from the extension would act as a “perverse disincentive” for them to take on employees.

Mike Emmott, employee relations adviser at the CIPD, explains: “We are concerned that the Government has even considered exempting micro-businesses and start-ups from the proposals – particularly when the Regulations will come into effect after the current three-year moratorium.

“Excluding businesses of any size from the application of employment regulation would tend towards the creation of a two-tier labour market and could be a perverse disincentive for small businesses to expand.”

Emmott adds that the flexible working Regulations are a “great example of light-touch legislation”, and so, he argues, there is no case for excluding micro-businesses and start-ups from the extension of the Regulations.

TUC concerns

But while the CIPD sees the “light touch” of the proposals as a plus, the TUC has raised concerns over plans to replace the existing statutory process for considering requests with a new code of practice; the idea being that employers will be able to be flexible with how they deal with requests, integrating the extended right to flexible working into their current management systems.

The TUC says that this could weaken current flexible working rights and encourage employers to reject requests without proper consultation.

Brendan Barber, TUC general secretary, argues: “Weakening the right to request flexible working will give bad employers the wrong message and is the excuse they’ve been looking for to ignore requests. The Government should remember how successful and popular this right has been for parents over the last decade and put their needs ahead of the same old carping from business lobbyists.”

Flexible approach?

Vanessa Hogan, senior associate at law firm Hogan Lovells, disagrees. She says that letting employers take a flexible approach would support flexible working for employees as it would allow employers to adopt a system that works with their business, while workers’ rights would be underpinned by the code of practice.

“Our view is that the code of practice would be a good move because the reality is that the principle-based system would give employers the flexibility to adapt their approach so that it’s appropriate to their size and to their sector,” Hogan comments.

However, she adds that clear guidance will be needed from the Government. “At the moment, the way the proposals are drafted, I think the Government has underestimated the difficulties that employers will actually face dealing with it. The key going forward will be guidance on how the right to request flexible working might be applied.”

Risk of discrimination claims

Another concern that has been voiced among businesses is that employers could face a higher risk of discrimination claims by turning down flexible working requests.

At a TUC/BCC debate in July on flexible working, Jo Lloyd, non-executive director of small business Z-Card, painted a worrying picture of the fear around dealing with flexible working requests in small companies.

“I’m very averse to turning down requests without checking with our employment lawyer first,” she says. “I always check with the lawyers as I don’t want to end up in court.

“Additional red tape is a huge hurdle for us. We don’t have time to keep track of every bit of legislation that’s coming through.”

Also, according to Hogan, employers could potentially face an increase in indirect discrimination claims following the extension if clear guidance on prioritising requests is not provided by the Government.

“The reality is you don’t get flexible working requests all in one go. Therefore, you’d end up having accommodated a number of people who do not have childcare or caring responsibilities and the employer would be in a position where they would have to turn down someone who does have those responsibilities.

“As a result, they could be faced with an indirect sex discrimination claim, because, of those employees who are covered now, it’s mostly women who make flexible working requests.”

Employers already willing to consider flexible working

Another point that the CIPD, the EEF and the BCC all seem to agree on is that many employers are already willing to consider flexible working requests, regardless of legislation.

Tim Thomas, head of employment affairs at the EEF, says: “Flexible working is already widespread in manufacturing given the need to respond rapidly to changes in markets and customer needs as well as employees’ desire for greater flexibility in how they work.”

However, he acknowledges that some effort has been made to ease the burden on employers. “We believe further regulation is not needed but the Government has at least tried to keep the new measures as simple as possible,” he says.

Although the CIPD supports extending the right to request flexible working to all employees, it also admits that flexibility is already a part of many businesses.

Emmott says: “The truth is that many employers – large and small – have anticipated the Government’s proposal and are willing to consider requests from an employee. They see the business benefits of helping employees balance their work with their lifestyle and personal commitments, at a time when organisations need to be driving a competitive edge through their people.”

With this in mind, it is understandable that business groups say additional legislation in this area is unnecessary, but the problem is that not all employers will adopt an attitude that is flexible-working friendly without the extra regulatory push.

So, while some groups argue that the changes are not needed and others argue the proposals do not go far enough, the Government will need to arrive at a compromise between ensuring flexible working rights for all employees and making sure businesses do not suffer too greatly from the extended regulation.

And, though both sides are unlikely to be entirely happy with the outcome of the Government’s consultation, the bottom line is that employers will still be able to refuse requests where one of the Government’s eight business reasons apply.

Employers can find additional resources on the right to request flexible working, such as contract clauses, model policies and line manager briefings, on XpertHR.


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