Legal opinion: Flexible working in the age of austerity

For many years there has been a general consensus that Europe and the UK have different approaches to employment law.

This consensus is that the UK tends to emphasise individual rights whereas Europe favours a more collective agenda. This is often allied with the idea that the collective approach is damaging to business. This contrast between collective and individual rights raises questions about how the UK will cope with the recently implemented austerity measures and whether or not a more collective approach might benefit the UK economy.

The employment relationship is governed by a contract of employment, which is an arrangement between an individual and the employer. The individual employee is entitled, in law, to insist on his or her individual rights under the contract regardless of the impact on the business or the workforce generally. In some cases employers introduce a “flexibility” clause into the contract. This might say something like “you will perform job A and any other duties that may reasonably be required of you”.

It might be thought that this would allow the employer a wide degree of latitude in assigning the employee to other duties. However, a clause in these terms has been held (in Land Securities Trillium Ltd v Thornley [2005] IRLR 765 EAT) to mean that the duties required of the employee must be reasonable solely from the perspective of the employee and not reasonable in terms of weighing up the needs of the business and the interests of the employee. That is to say, the court adopted a very strict interpretation of the contract in order to protect the individual employee’s rights.

Of course, in practice, many employers have been able to persuade employees to work part time, take a sabbatical or even take a pay cut in order to protect jobs. The extent to which the public sector might be willing or able to do this in the way the private sector has in the past is unclear. However, it is still possible, in theory, for individual employees to hold out against any change to their individual contracts of employment.

A similar issue arises in relation to retirement. In most cases of discrimination, the individual right not to suffer direct discrimination trumps any business interests. In the case of age discrimination, the position is different because it is possible to justify direct age discrimination. This means that it is possible for an employer to compel an employee to retire (even after the abolition of the default retirement age (DRA)) if it can show that retirement is a proportionate means of achieving a legitimate aim. This might include, for example, the needs of the business and succession planning. However, the way justification has been interpreted by the UK courts has been very strict.

It has become clear that in the UK it is necessary to produce detailed evidence to support any argument of justification. So, for example, it has been held that it was not justified to require the holder of judicial office to retire at the age of 65 and it was not justified to require a professional football referee to retire at the age of 48. In contrast, the European Court has not only allowed the compulsory retirement of dentists at the age of 68 but also upheld a requirement that those who join the fire service in Germany must be under the age of 30 years.

One issue that may become prominent in the coming years is the extent to which offering an employee at, say, the age of 65 a different job, with perhaps lower pay or reduced hours, may be justified. It is not yet clear whether or not it may be possible to justify requiring older workers to work differently and accept lower pay in the interests of the business as a whole. While the CBI has lobbied the Government to delay the abolition of the DRA, one idea that has not yet been considered is the possibility of a statutory mechanism to allow for a more flexible approach to older workers.

In both Europe and the UK collective bargaining has, traditionally, been highly confrontational. The experience in the private sector in the recent recession was that a more collaborative approach did enable many jobs to be saved, albeit at the expense of other benefits and rights. This benefited not only the employees but also employers who have saved on redundancy costs and retained skills in the workforce. While the trade unions in the UK have, on occasion, shown themselves to be open to discussions about flexible working to save jobs, there is also some responsibility on employers to think creatively about the use of flexible working.

While it would, in theory, be possible to legislate to allow for the imposition of flexible working, with suitable protections, it currently seems unlikely that the coalition Government will attempt this. Nonetheless, it seems probable that employers may be able to make increasingly sophisticated use of a variety of forms of collective bargaining to persuade employees to accept more flexible ways of working.

Paul Lambdin, partner, Stevens & Bolton LLP

Related information

Guidance and FAQs from XpertHR

Comments are closed.