Flexible working changes: what impact will they have on employers?

With the news that the the Employment Relations (Flexible Working) Act 2023 (“the Act”) received Royal Assent on 20^th July 2023 , Employment Law specialist Katy Wedderburn breaks down the key questions and misunderstandings relating to the new provisions. The introduction of these changes is expected to boost employee satisfaction and productivity, benefiting employers by helping to attract and retain staff.

What are the main changes that will be introduced by the Act?

Firstly, there is no set date for the changes being made – the Government has said it anticipates they will be made when amending regulations are introduced to bring the changes into place next year.

• There is good news for employees in that the decision period for flexible working requests will be shortened to two months from three (subject to any agreed extension).
• Employees will no longer have to give the employer an explanation of what effect, if any the employee thinks making the change requested would have on the employer and how that might be dealt with. This will make it much simpler for employees to make a request.
• The Act includes a duty on employers to consult with the employee before refusing a flexible working request. Unfortunately, there is no guidance as to what is expected in terms of consultation so I can see room for debate/dispute.
• No right of appeal or duty on employers to give an appeal against a refusal has been introduced – however, employers should note that in the ACAS Code of Practice on handling in a reasonable manner requests to work flexibly | Acas (the “Code”), says if an employee appeals, the employer is encouraged to listen to the appeal to try to resolve the issue.
• It is also worth noting that ACAS is currently consulting about updating the Code. The consultation is open until 6^th September 2023.
• Finally, the Act increases the number of applications that can be made by an employee in a 12 month period to two.

What does this mean for HR policies?

HR professionals should review and update their flexible working policies to reflect the changes in terms of the decision period in good time for the changes becoming effective. If appropriate, they should consult with trade unions or employee representation bodies about the proposed changes to policy.

In the policy, for once the changes are effective, they should remove any requirement for the employee to explain the effect of the requested change and how it should be dealt with. They should also include that managers will consult with the employee about their request before they refuse it and provide for a right of appeal.

Also, for once the changes are effective, the number of applications which can be made in a 12-month period should be updated to 2.

Employers should also keep an eye out for the update about “day one” rights coming in – currently employees need at least 26 weeks’ continuous service to make a statutory applcatoin and the Government intends to make that a “day one” right when the changes become effective. Employers should be prepared to make that change to their policy too.

There’s plenty of time to prepare as the changes are anticipated to be effective in summer 2024.

How will this impact hybrid working practices?

Employers will need to review their policies and related managers’ guidance in light of the changes to ensure the information is up to date. It is possible they will result in an increase in flexible working applications. The changes mean it is a less cumbersome process for employees and they don’t need to make suggestions about how their requested change could be managed. It leaves that to the employer.  They can also apply more often.

And how should organisations prepare for the new law?

Employers should make sure their HR team and managers are trained in the updated policies and understand the updated framework for applications before the changes take effect. They should engage with trade unions and employee representatives, if appropriate, about policy updates before introducing the changes. They should make sure the updated policies are shared with the employees at the appropriate time.

They should remember that the current regime (without the changes to decision making period, the requirement for the employee to explain the effect of the requested change and how it should be dealt with under the current scheme) continue to apply until the changes are made by the regulations.

Employers will still need to consider the possibility of indirect discrimination claims in terms of how they decide applications; as well as considering the permitted statutory reasons for refusal. If there is a particular policy, criterion or practice (“PCP”) in granting or refusing requests which puts people who share an Equality Act “protected characteristic” at a particular disadvantage by the PCP e.g. employees with child or other caring responsibilities (often women), or who have other protected characteristics such as disability, or age, and the applicant is put at a disadvantage, they will need to be able to justify the arrangements as a “proportionate means” of achieving a “legitimate aim” to be able to defend an indirect discrimination claim.

They should consider applications from employee(s) with disabilities fully, to make sure any unfavourable treatment arising from their medical condition  – e.g. refusing an application to work fewer hours, or from home can be justified as a proportionate means of achieving a legitimate aim. They should also consider whether the duty to make reasonable adjustments applies.

We can provide flexible working policies, and updates to policies already in place.

To contact Katy, or read more about her practice, click here.