What impact has the Employment Relations (Flexible Working) Act 2023 had since it came into force in April 2024?
What changes has the act introduced and how it has affected employers?
The Employment Relations (Flexible Working) Act 2023 came into force on 6th April 2024 and it made a number of key changes to the rights to request flexible working. The biggest change was that this became a day one right removing the requirement for employees to have 26 weeks’ service. The second biggest change was that employees can make two applications in a 12 month period not just one. These two changes meant that many more employees were in scope to make such a request or that employers would potentially have to deal with a larger number of requests. As set out below this increased applications.
Some more minor changes also brought in from April 2024 were that employers have to consult before declining a request as opposed to merely meeting with the employee to discuss the request. Consultation is more of a two way discussion. The default period for dealing with a request reduced from three to two months. Employees no longer had to explain in their application, the effect of the proposed change on the business and how that may be dealt with. These are more procedural changes. In reality many employers dealt with requests promptly and well within two months anyway but for some this may have presented more of a challenge. I have always encouraged my employer clients to consult and discuss in the meetings and if they cannot accommodate to explore alternatives in any event so this was not a big change. I personally think that the decision to remove the requirement on the employee to consider the impact of the proposed change on the business and ways this may be dealt with as part of the application was not a wise move as it encouraged them to consider the consequences of the request on the team and the business. I would always encourage my employer clients to discuss this as part of the formal meeting.
Finally, a new ACAS Code of Practice on Flexible Working was introduced by ACAS in April 2024 which provided welcome guidance for employers on the process and procedure. Further changes are on the horizon with the recently published Employment Rights Bill on this topic. The Bill proposed that the statute will mandate employers to not only rely on a stated reason to turn down the request (unchanged) but to also explain the reasons why that ground applies. Again in practice, I have always advised my employer clients to do this. The other larger change coming is that when the Bill is passed it would need to be reasonable for the employer to refuse the application on those grounds. This would in my view change the test from a subjective one of the employer believing it applies to an objective test in that that employer will need to demonstrate it is reasonable.
Have many had to amend their non-statutory flexible working policies to comply?
99.9% of employers will have had to make amendments to their policies or handbooks as many provided for service requirements to be eligible, limited the number of applications to one and specified that the application needed to explain the effect on the business and ways it could be dealt with as a formal requirement. These changes all therefore needed to be reflected in the policy and whilst there may be some smaller employers who had no written policy but merely dealt with the application within the legal parameters when it was made, many did and the changes needed to be updated. As there were many changes in April 2024 for employers this was only one area which needed to be rewritten but when any changes take place it does create an administrative burden for employers.
Have they seen many more requests from employees to change their patterns of working?
In reality since COVID the number of flexible working requests made to employers have grown exponentially. The number of requests has from my experience increased by 150% and employers are also having to make changes to retain staff and recruit staff as employees are looking for flexibility. Those employers with good flexibility, for example, ability to work from home, are more favoured by employees. The changes from April 2024 followed this pattern of more requests but it is difficult to say whether this was because of the legal changes or a continuation on the wider changes within the workplace and the desire for flexibility post COVID. It certainly put more employees in scope as they could make more requests within the 12 month period and could make such a request from day one rather than after 6 months service so will undoubtedly have contributed to the number of requests.
How can employers ensure they are inclusive while also complying with legal requirements?
An employer has a duty to consider the request but also a refusal to grant the request can mean that the employer faces an indirect discrimination claim. Typically this is a sex or disability discrimination claim as the requests are often to accommodate caring responsibilities or conditions of the employee or others. For others, it is a life style choice but where employees are inflexible then they can find it difficult to both retain staff or recruit. The difficulty can arise in the order in which requests are made as all employees have the right but they are typically dealt with in order of receipt so if there are two members of a team and one makes the request for desire rather than need and then this is granted, this can make it harder for the other team member to have the request granted even if there is a need as the first employee has had a permanent change to their contract and the impact is assessed at the time of the second request.
The best employers are those that recognise that flexibility will lead to a more inclusive workforce but for some roles flexible working can be harder. For example for office based roles there is often the ability to have some form of hybrid working to include an element of working from home – location flexibility. In a manufacturing or warehouse role this is simply not possible but the flexibility can come in other ways such as hours of work.
Do many go over and above the act, and embed flexible working options in their corporate cultures?
There is definitely a shift in the way we work accelerated by COVID. Having been an employment lawyer for over 21 years, back then, people simply rarely offered working from home and advice wasn’t sought on this issue. It wasn’t the norm. Even when I joined Excello in 2013 being a solicitor who could be hybrid working or work from home totally remotely was revolutionary. Nowadays, it is what many employees demand and expect. Employees want a corporate culture which embraces flexibility. Many of my employer clients offer different types of flexible working for all which is optional but the take up is high for example the three day in the office two days working from home policies or in manufacturing where they finish earlier on a Friday without a pay cut. For these organisations you can formally request something different for flexible working, of course as is your entitlement, but you do not need to formally request the standard flexibility offered for all.
In June 2022, a national pilot study was undertaken where 60+ businesses trialled a four day week with no loss of pay for six months to measure its success. Most participating businesses found this to be a success. At the end of the six month trial 56 extended the trial further for another six months and 18 made it a permanent change. The trial found extensive benefits for employee wellbeing for the almost 3000 staff taking part including less stressed, better work life balance and better sleep. Sick days fell by 2/3 and 57% fewer staff left the companies compared with the same period the year earlier. Concerns were raised however that it was not possible for all as front line workers may find this more difficult and concern was expressed about the two tier workforce, driven by the nature of the role. The Workers Union have also announced that they are conducting their own trial to launch this month to present the findings to the Government in the summer of 2025 to influence policy in this area.
What additional benefits can employers offer to further support flexible working requests, such as emergency childcare, eldercare, etc?
Employers must also allow employees time off for dependants in an emergency but lots of employers offer additional benefits alongside the flexible working statutory policy. As set out above many have a more flexible arrangement for the whole work force or certain areas of it. Many will consider sabbaticals or temporary changes to working hours to accommodate life events for example supporting a relative with a short term care need whereas a formal flexible working request is a permanent change. Many offer other types of leave beyond the statutory (more carer related leave) or additional holiday, recognising that these matters are very high on the employee’s agenda when looking for a role. Many are looking at reward more holistically rather than a pay rise but other options such as employee benefits in kind or flexibility etc.
Many benefit from working for only for a few hours as part-time workers when they return to work after a period of childcare or are older and wish to not fully retire or want to job share with one or more colleagues. It is however concerning that the Government has decided to increase NI contributions and lower the threshold and the impact this will have on the workers who would have previously been exempt for the employer to pay NI as they earnt less than £9000 but will now be caught and whether this will impact on the availability of such roles or their continuance. This could be a negative change for the smaller part -time roles which may disproportionately impact on women and the older generations. Time will tell as the measures do not come into force until April 2025.
This article was published in the People Management website on 14th February 2025 and can be found here.