Where next for flexible working?

Flexible working is a topical issue in today’s workplaces, especially following the changes to many working patterns that were brought about by the Covid pandemic. Many employers grapple with getting the balance right when it comes to ensuring their employees benefit from both the immersive, collaborative atmosphere that in-person office work can bring and the flexibility and opportunities for focused productivity that working from home can provide. In this article we explore recent legal developments in flexible working and provide some food for thought on implementation for employers.

Changes to flexible working and the ACAS draft Code of Practice

The flexible working regime is changing in April this year, with the introduction of the Employment Relations (Flexible Working) Act 2023. Although this doesn’t go as far as the Government’s original intention to make flexible working the default, the changes still have the potential to significantly impact requests and how they are handled. In particular:

• The right to request flexible working will become a day one right (ie workers will no longer need any service requirement to make a request).
• Employers will have two months to respond (down from three months) and must consult with employees before coming to a decision.
• Employees will be able to make two flexible working requests in any 12-month period instead of one.
• Employees will no longer have to explain the impact of their request.

To complement this, Acas has recently published a revised draft Code of Practice on requests for flexible working (the Code), also expected to come into force in April 2024, with non-statutory guidance to follow. A failure to comply with the Code does not in itself make an organisation liable to legal proceedings, but Employment Tribunals will take it into account.

The Code clarifies that:

• If an employer decides to agree to an employee’s written flexible working request in full, they do not need to consult the employee.
• If an employer cannot meet an employee’s request in full, the employer and employee should discuss any potential modifications to the original request or alternative flexible working options. It may also be helpful to discuss whether a trial period would be appropriate.
• While there is no statutory right for an employee to appeal against a flexible working decision, it is good practice to allow one (using a different manager to hear it wherever possible).
• If an employee fails to attend a meeting and a rearranged meeting without good reason, “the employer may consider the request withdrawn”.

A push to return to the office

Interestingly, while the Government’s intention is to give “millions of British workers more flexibility over where and when they work” (see its press release), at the same time it appears many employers are pushing for a return to greater office attendance.

A KPMG 2023 CEO Outlook Survey found that 64 per cent of CEOs surveyed anticipate a full return to the office within three years, with 87 per cent of CEOs saying they are more likely to reward employees who come into the office. Recently law firm Slaughter and May hit the headlines for reportedly planning to monitor staff office attendance and "naming and shaming" those who don’t comply. They are not alone: EY, Citigroup and JPMorgan are all said to be tracking employees in a move towards stricter office attendance. 

The Employment Tribunal considers office attendance

Against this backdrop, employers will be interested in the case of Miss Wilson v Financial Conduct Authority (FCA). In this case an Employment Tribunal considered the FCA’s refusal to allow a senior employee to work fully remotely. 

By way of brief background: the FCA rejected a request made by Miss Wilson in December 2022 to work entirely from home because they believed there would be a detriment to the quality and performance of her work as a senior manager. The Employment Tribunal was asked to consider whether the FCA had based their decision on incorrect facts. The ET found that the FCA genuinely considered Miss Wilson’s request and was not incorrect in concluding that if Miss Wilson worked from home full time this would be to the detriment of her ability to supervise and support colleagues, take part in in-person events and meetings in the office and welcome new members of staff, among other responsibilities.

This decision is helpful in confirming that flexible working decisions remain that of employers. Provided an employer considers a request in accordance with the statutory scheme, “there is no right to require an employer to permit that an employee works exclusively remotely”.

The usual caveats apply however: this case considered a very specific legal point and did not consider issues such as unfair dismissal or indirect discrimination. Moreover, it does not give employers the right to adopt a blanket refusal to remote working: the Judge recognised that the debate as to whether face to face or virtual contact is better will differ from employer to employer and that “it may be the case that each situation requires its own consideration”.

Thoughts for Employers

So what should employers do when, on the one hand, they wish to encourage greater office attendance, but on the other they are faced with the possibility of an increased number of flexible working requests? Here are few considerations to take into account:

• Despite changes being made to the flexible working regime, employers can still refuse flexible working requests for one of eight statutory reasons, including additional costs, ability to meet customer demand and detrimental impact on quality and performance. If refusing a request, it is important for employers to be able to articulate and evidence a clear business reason for doing so.
• Beware blanket policies. While the new flexible working regime does not require employers to agree to every flexible working request, employers do need to consider each request on a case by case basis, taking into account the individual’s circumstances. This requirement includes consulting with employees and exploring alternative options.
• It is particularly important to consider requests within the context of the Equality Act 2010. Employers need to be cognisant of how employees’ protected characteristics may influence their decision to make a flexible working request. For example, it has been accepted in law that there is a childcare disparity between men and women, which may make it harder for women to comply with certain working patterns or arrangements. Employers should therefore be alive to the potential risk of indirect discrimination in such cases.
• It is however still possible to reject a flexible working request in such circumstances provided an employer can establish it was a proportionate means of achieving a legitimate aim (objective justification). For more on this see our blog justifying flexible working decisions.
• Remember, employers are under a separate duty to put in place reasonable adjustments for any staff who are disabled under the Equality Act. If an adjustment is reasonable it is not possible to justify a failure to make it.
• Flexible working requests should be considered in a timely manner (noting the reduction to two months in April) and employers should ensure that their managers understand their responsibilities when it comes to dealing with requests (an issue which caused a delay in the FCA case).
• When it comes to enforcing a return to the office, the starting point will be to look at employees’ contracts of employment. If these state that their place of work is the office there may be scope to argue it is a reasonable management instruction to require employees to return to office working. Anyone who ignores that request could potentially be subject to disciplinary action, though of course that would need to be handled with care and for the reasons above, strict blanket policies should be avoided. 
• Any monitoring of employees or attendance data must be done in compliance with data protection and GDPR principles.

The debate around flexible working and the return to the office is likely to be a key theme in 2024, and one which will require careful handling by employers. As the Judge in Miss Wilson v Financial Conduct Authority acknowledged, “this is a case which raises a key issue in the modern workplace and which will no doubt be the subject of continued litigation”. 

With thanks to Jessica Bennett, current trainee in the team, for their help in preparing this briefing.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, February 2024