Flexible working legislation - more than just a banana skin

Few employers and employees are unaware of flexible working legislation that came in earlier this year. But, as Simon Marshall finds out, what it exactly means is still being worked out by the experts...

The impact of a recent rejig in flexible working legislation by the DTI has yet to make itself felt. But even though they’ve had at least six months to generate a policy, the majority of businesses remain unaware of the legal implications and just how to respond to requests from newly-empowered employees.

Many of them know that, since April, employees now have the legal right to request flexible working providing they have children under the age of six or children with disabilities under 18. But when should a company say “Yes” and when “No” without ending up at an employment tribunal?

“Many employers are quite frightened of refusing a mum the right to work flexibly,” says Derek Eccleston, employment law specialist at the Employment Law Training consultancy. “[They] cannot say it is inconvenient or that it is going to cost you a few extra pounds to do it, [because] even though expense is an issue, people do not know yet how much it takes to make it reasonable to say no.”

Making the correct decision is doubly important. A recent report issued by Crown Computing warned that, handled badly, the new right could leave staff which fall outside the regulations feeling as if they’re being discriminated against. According to a Microsoft survey, working parents place flexible working options as high as salary size on their agenda but about 70 per cent of UK businesses are reluctant to let them out of sight.

Something has to give, and new legislation covering not only Flexible Working Regulations (FWR) but also maternity/paternity/adoption leave and pay, parental leave and time off for dependants, means employers need to take the lead.

“Parents are obviously keen to embrace [FWR] but for businesses, the move towards a flexible working policy is still clearly a difficult decision,” says Mike Pryke-Smith, Medium Business manager at Microsoft. Yet only a couple of weeks before the new measures were introduced, up to 75 per cent of the UK working population had not even been briefed. Businesses failing to follow the correct procedure, or to deny flexible working benefits without sufficient reason, face fines or may, in some cases, face discrimination claims that can be more punitive.

“I suspect there are still a lot of companies that have not got their acts together,” says Alan Denbigh, executive director of the Teleworking Association. He claims that the government’s attitude to UK businesses has kept the maximum fine for infringement of FWR of £2,080 relatively low.

“This suggests that the unions could be the only ones to pursue claims,” he says, though he points out that some staff may decide to widen an illegal denial of flexible working rights into a sex or other discrimination claim. In fact, City law firms are already dealing with such cases.

“If the request is refused, [women] are not bringing their complaint under the Regulations,” advises Susan Gordon, an Employment Department partner at City firm NabarroNathanson. “Instead, they are bringing indirect sex discrimination claims against their employers. In these applications, they are arguing that the requirement to work full-time has a disproportionate adverse effect on women and is not objectively justifiable.”

If proven, compensation may be awarded. Sometimes, direct sex discrimination or equal pay claims are being added which can lead to further compensation. “An employee does have more than one bite of the cherry here,” agrees Anthony Thompson, head of Employment Law at City solicitor firm Webster Dixon.

“If a woman who, returning from maternity leave, wants to reduce her hours and is [illegally] turned down for flexible working, her only recourse is [a] sex discrimination [claim] and that’s not necessarily a claim she might want to file or that a company will want to tackle,” he explains. “It can mean the end of a business but people are now much more amenable to opening dialogue.”

Thompson suggests that the fine for FWR infringements may soon increase in order to force wider compliance as smaller businesses attempt to brush the issue under the carpet. However, he also expects greater lobbying from small businesses chasing complete exemption along the lines of a precedent exemption under the Disability Discrimination Act. Webster Dixon knows of no FWR tribunals so far but has a number of clients who say their business has not responded within the legal timeframe to a flexible working request.

Parity, a UK staffing and training specialist, warns that as staff attention on their rights grows, employers must be ready, as part of their policy, to explain the legislation.

“Be prepared to answer questions from employees who don’t qualify but [nevertheless] believe they have a right to flexible working - for example, people with elderly relatives to care for,” says Anne Thompson, HR director at Parity.

The advice here is to become familiar with the guidelines, available from the DTI, disseminate them proactively among staff, generate a policy and become adept at explaining it to claimants. Difficult questions in this context can be dealt with fairly by explaining the current boundaries of the legislation and, if necessary, claims can be resisted properly.

Webster Dixon’s Thompson advises: “There will [inevitably] be a lot of legal questions about who has responsibility for the children. After all, it’s not enough to be just a partner of the mother or father, you have to be able to demonstrate responsibility for the children’s upbringing.”

Despite the minefield, Bailey Telecom, Britvic, BT, Lloyds Bank TSB and Newcastle Building Society (NBS) are among early public champions of flexible working rights. Bailey in particular claims a 15 per cent increase in productivity, a 5 per cent reduction in the wage bill and an improved work/life balance for employees, while NBS claims it has helped with employee retention.

However, it’s important to integrate a thorough monitoring programme to ensure results can be measured and that flexible working, literally, works. Relevant Health and Safety legislation, such as workplace inspections and employee insurance policies, also need to be interlaced. “Generally, companies are responsible for everything from the plug in the wall outwards,” says Alan Denbigh of these commitments.

All of which costs money. The deadline for applying for financial assistance through the DTI’s Work/Life Balance Challenge Fund has closed, but access to its Partnership fund, aimed at promoting best practice procedures, is still open.

For those businesses still caught with their legislative pants down, City commercial law specialist NabarroNathanson advises that the following areas generally provide sufficient grounds for denying a flexible working request:

The burden of additional costs;
A detrimental effect on the ability to meet business demand;
An inability to reorganise work among existing staff;
Inability to recruit extra staff;
Detrimental impact on quality or the organisation’s performance;
The fact there is insufficient work during the periods the employee proposes to work flexibly;
Due to any planned structural changes.

However, given the increasing emphasis placed on helping employees achieve a work/life balance, some business may consider extending flexible working to employees before they have to ask for it.