The way we work has permanently changed post-pandemic
According to the latest figures from the Office of National Statistics (ONS), one in five UK businesses are now either using or intending to use increased home working as a permanent business model1.
The most recent research from the Chartered Institute of Personnel and Development (CIPD) found that 65% of employers provide some flexibility to their employees. However, it was also discovered that there’s a significant unmet demand from workers for more flexible arrangements. For example, the research found that 17% currently work flexitime, but 29% would use it if offered and possible in their role. Only 4% have compressed hours, but 18% want to work this way2.
Changing legislation
The Employment Relations (Flexible Working) Act 2023 received royal assent in July 2023 and came into force on 6 April this year. Nevertheless, a survey published by ACAS on 28 March found that only 70% of employees were aware of the law change, while 43% of employers also said they did not know the law had changed3.
Under the new legislation, the government has said that millions of British workers will have more flexibility over when and where they work4.
There is no longer a qualifying period for flexible working requests, meaning that employees can request flexible working from day one – as soon as they start working for their employer. Employers must now decide on a request within two months and consult with their employees before they refuse an application. The Act no longer expects an employee to explain the impact they think their flexible working request will have on their employer.
Rising litigation
New ways of working have already been a source of increased employee litigation. The number of employment tribunals citing remote working increased by 50% in 2022, and data available for 2023 suggests that numbers have increased further, according to court records analysed by HR consultancy Hamilton Nash5.
More widely, recent Gallagher research found that 72% of business leaders believe that litigation against UK businesses has increased over the last five years. Of the legal threats respondents had received in the same period, 38% related to employee disputes.
Employers may reasonably anticipate an increase in flexible working requests following the new legislation. Could this increase the number of employment tribunals further? Not necessarily, if employers manage this emerging risk carefully.
Managing risk
Findings from Flexa’s Flexible Working Report ’23-’24 show that what flexible working means to employees is becoming more nuanced. Flexible working extends far beyond location and also includes job sharing, part-time, compressed hours, flexible hours, annualised hours, staggered hours, and phased retirement. The report found that workers care more about where they work than when – just over half of respondents said they didn’t mind whether an employer offers flexible hours, but flexible working locations were a huge priority6.
Therefore, businesses need to be clear on what flexible or hybrid working means within their organisation, and a distinction may need to be made between the two. For example, employers may decide to adopt a company-wide hybrid working pattern but manage flexible hours working requests on an individual basis.
Whatever the approach, it must be clearly communicated to employees in a set of accessible, up-to-date and easy-to-understood policies and procedures to help manage expectations.
How many people are currently working flexibly when their contract states they are full-time in an office location? This could be problematic from a claim or dispute perspective, and employers may need to update contracts to reflect this change in circumstances so that everyone is operating from a clear legal standpoint.
Employers are not required by law to make value judgments regarding flexible working requests. An employer may be more likely to face a claim for sex discrimination from the parent population, but it could also face a claim of indirect discrimination by non-parent and carer employees if it consistently gives more weight to requests from parents. Therefore, each request must be considered in isolation and handled carefully and consistently in line with company policy.
How can we help?
Andrew Marvin, Gallagher Client Service Director, North Division, said: “If your business is worried about potential issues related to flexible working, the first step is to mitigate the risk. Policies and procedures need to be updated to align with the new legislation. These rights must be clearly communicated, and every request should be assessed on its individual merits, but within the new two-month deadline.”
Regarding insurance protection, Employment Practices Liability (EPL) insurance helps protect businesses against claims made by employees when they believe their rights have been violated.
Global businesses tend to buy EPL in isolation, but for most UK companies, it will likely be a subsection of their management liability suite, along with Trustee Liability and Directors’ & Officers’. SMEs may be more vulnerable to EPL claims relating to flexible working as large corporates tend to have in-house legal support to ensure decisions and actions do not expose the company to potential claims.
Andrew continues, “You can take steps to protect your business with Employment Practices Liability insurance. This type of insurance can offer peace of mind by covering legal costs and many types of tribunal awards if your business is taken to an employment tribunal. The amount of coverage will depend on the limit of indemnity you choose. Speak to your local Gallagher representative to learn more about the different options available.”
