The Employment Relations (Flexible Working) Act 2023 – are you ready?

On 14 July 2023 the new Employment Relations (Flexible Working) Act received its final reading in Parliament. On 20 July 2023, it received Royal Assent and has now become law.
According to their press release published on 20 July 2023, the government believe that“ Millions of British workers will have more flexibility over where and when they work” and businesses are “set to benefit from higher productivity and staff retention as a result”.

Furthermore, research has shown that increased flexibility could open up more work opportunities for millions of people including carers and people with disabilities.

The Government expects that the measures in the Act and secondary legislation should come into force in July 2024, giving employers adequate time to prepare for the changes.
However, critics argue that the act has fallen short of meeting the needs of the modern workforce, claiming the legislation exposes employees to uncertainty and still leaves them facing the same rigid arrangements as they currently face.

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What is flexible working?

Requesting flexible working means asking the employer to alter the way you as an employee works. If the employer agrees to the change, this creates a permanent change to the terms and conditions of employment.

Flexible working is not only working from home or working part-time. Examples of kinds of flexible working include:

• Reducing the number of hours worked
• Changing start and finish times
• Having flexibility with start and finish time (sometimes known as ‘flexitime’)
• Working the contractual hours over fewer days (‘compressed hours’)
• Working from home or elsewhere (‘remote working’)
• Sharing the job with someone else (‘job share’)

What stays the same?

It had been widely reported that Flexible Working would become a day one right. However, this has not been included, and the government will develop secondary legislation to accommodate this in the future.

Employees will, therefore, still be required to have 26 weeks of service before they are eligible to make a request.

However, some employers are enabling this right sooner than required to give equity across their workforce and support their recruitment and retention strategies. Research from the CIPD in May 2023 found that 39% of employers already offer this as a day one right, and 14% of employers now plan to introduce this before the legislation takes effect.

What is new in the employment relations act?

There are some key changes that employers need to consider. Firstly, the employee handbook or flexible working policy documentation should be updated to reflect these changes, with your people managers being briefed to manage requests in line with the new requirements. Ideally, employees should also be made aware of the updates:

• Employees will be able to make two flexible working requests in any 12 months – employees are currently only able to make one request in any 12 months.
• Employers must deal with requests within two months unless an extension is agreed upon. This means that employers will need to consider requests more quickly.
• Employees will not have to explain within their application the effect that acceptance of their request might have on the business, or how such effect could be minimised. This requirement intends to remove barriers from employees who may find it difficult to write a compelling business case.
• Employers will be required to consult with employees before they are able to refuse a request.

When can a flexible working request be rejected?

Employees have the right to request a change, not a right to flexible working, and the employer must consider the request – this will not change. There is a balance to be achieved between the commercial and operational requirements of the business and the needs of individual employees; some requests will not be viable.

Employers are still able to reject flexible working requests for several business reasons; for example these currently include:

• If flexible working will have a detrimental impact on performance and quality of work;
• When the work cannot be reorganised among other staff;
• If extra costs that will damage the business;
• If people cannot be recruited to do the work;
• If it will negatively impact the ability to meet customer demand;
• When there is a lack of work to do during the time the employee has requested to work; or
• If the business is planning changes to the workforce, the request will not fit these plans.
• Support for employers

Best practise before declining a request for flexible working would be to consider whether there is any negotiation on the request to ensure the needs of the business can be met whilst accommodating the employee, as well as giving consideration to trial periods. Should either of these options be utilised, you should document this and ensure that the employee agrees. Trial periods should be for a reasonable period of time to allow you to fully assess the arrangement, with clear information of what may happen if the trial is deemed unsuccessful.

What next?

ACAS guidance regarding flexible working was published in 2014. The world of work has been changing with an accelerating pace since then in terms of technology and the way in which many people work since the pandemic, and so the guidance needs to reflect 2023 and beyond employer and employee needs.

Acas opened further consultation to develop their guidance following the introduction of the act to encourage open dialogue with employers about what may be workable. This consultation closed on 6th September 2023 and the responses are currently in the process of being reviewed. Further details will follow in due course.

Once finalised, the updated code should provide a roadmap of best practices for managing flexible working requests.

All employers should ensure their existing policies and procedures are reviewed and be ready to meet the new standards by July 2024.

In a market with strong demand for flexible working and where recruitment and retention remain challenging, it is worth considering a wider commercial lens beyond the statutory duties when dealing with flexible working requests to benefit from a more diverse workforce. Employers may inevitably have to deal with a greater number of, and more frequent, requests, and must ensure that they consult with employees and consider requests properly before opting to reject them.

The Government believes that the measures will be good for employers, with research showing that embracing flexible working can attract more talent, improve staff motivation, reduce staff turnover and boost productivity.

Our expert HR Consultants can support you by updating your flexible working policy or employee handbook and finding the appropriate balance for your organisation.