The risks of flexible working
Posted on 9th November 2023 at 13:51
There’s no doubt that the pandemic caused a revolution in flexible working. With proof that many jobs could be done remotely, employees had greater expectations about working away from the office, while an increased focus on work-life balance made many people reconsider their working hours.
Two-fifths of employers (40%) have seen an increase in requests for flexible working following the pandemic and 39% say they are more willing to grant requests for flexible working than they were before the pandemic. Britain has embraced remote working, with the average worker working 1.5 days each week remotely, compared to an international average of 0.9.
Positive impacts of flexible working include better attraction and retention of talent, the ability to recruit a more diverse workforce from a wider geography, improved employee financial wellbeing, and staff satisfaction, with remote employees found to be 22% happier than on-site workers.
But despite changes in the law giving employees more rights, and employees moving jobs (6%) or even profession (12%) for more flexibility, there has been a backlash among some employers. In fact, 63% of business leaders in the UK anticipate a full return to in-office work by 2026. But why?
As flexible working has increased, so have legal disputes around the issue. From September 2021 to August 2022 there were 190 employment tribunal hearings relating to flexible working, plus many cases will have settled before reaching this stage. In 2022 there were 42 tribunals relating to remote working and in the first half of 2023, there had already been 25 cases. Before the pandemic, there was an annual average of just 7 tribunals. The increase in numbers could mean there are more disputes, or parties are finding it harder to resolve disputes outside of the tribunal. Either way, it is not good news for employers.
Bosses, including Alan Sugar, Elon Musk, and the CEO of Goldman Sachs have also raised concerns about reduced productivity, while others worry about weaker working relationships.
So, is it safer to have a blanket policy against flexible working to avoid these problems in the workplace? Probably not, as this could fail to meet your legal obligations. Instead, you should take time to understand the risks, and then address them as you implement whichever model you choose.
Refusing flexible working
A recent survey found that 5% of all grievances are caused by a refusal to offer flexible working.
Employers may only refuse flexible working requests for specified business reasons including cost, the impact on productivity or quality of work, difficulty redistributing work or recruiting replacement workers, and customer demand. You must be able to justify the decision in relation to the listed reasons. The pandemic proved that many jobs could be done effectively from home and forced many firms to put the infrastructure in place, which made it harder (but not impossible) to justify a refusal.
There is also the potential for resentment if some employees are granted requests for flexibility and some aren’t. BBC Worklife found that businesses with a mix of roles, some of which can be done from home and some which can’t, are often keen for everybody to work in person to avoid imbalance and resentment between colleagues. However, this does not fit into any of the legal business reasons for refusing requests, and so risks legal claims.
If you have a company policy about flexible working, you should always follow it. Keep records of your decision-making process, and the reason for granting or refusing requests. This will help you to prove you met your obligations and to justify decisions, especially if some requests are granted and others are not.
Deciding the format of flexibility
There is no one format for what flexibility looks like. Even if you are willing to be flexible, your employees’ wants or expectations may differ. Some companies take a rigid approach, allowing work from home on specified weekdays, while others will require a minimum number of days in the office but leave it up to the worker to choose those days. Some firms will accommodate whatever working style the employee prefers, so long as it is practical.
Acas suggests that, if you can’t grant a request, you should look at other options. Do not treat employees’ requests as all or nothing; discuss what they hope to achieve by working flexibly and aim to find an arrangement that suits you both. Again, you should follow your policy and document your discussions, including the reasons for refusing the original request.
In smaller organisations, or where you receive many requests, you might find that it becomes more difficult to accommodate requests as the number grows. This might cause disputes about whose requests are granted, or who is out of the office on which days.
Approving one request does not mean you must approve all requests. You can still turn other requests down for the given business reasons – for example, it was practical to allow one worker to have Friday’s off, but allowing a second employee would make it impossible to meet customer demand. Focus on whether your business can support the requests. Avoid getting drawn into assessing your employees’ circumstances or needs, as this could very easily lead to legal claims (especially regarding protected characteristics – more on that shortly).
Where there is a conflict between two requests, explain the problem to the employees and see if you can reach a compromise. However, be careful not to apply any pressure or suggest any preference for one request. If you can’t reach a compromise, you might consider a first-come-first-served basis, or even a random selection. But don’t wait for this to become a problem – set out your approach in your policy, so your employees can see from the outset that the process is fair to everybody.
Generally, official flexible working requests that are accepted are treated as changing working arrangements. However, like all agreements, the terms are open for discussion between you and your employee.
For example, an employee might request to work from home just once while awaiting delivery of furniture or appliances. Or maybe they usually don’t work on Fridays but would like the freedom to occasionally take a Monday off instead. You might be happy to allow it, but wary of permanently changing your arrangements.
You could state that any agreement does not overrule the contract of employment, or that you retain the right to request an employee works the agreed days from the agreed location. We advise getting a specialist solicitor to write your contracts and any amendments or agreements, to ensure the wording protects your rights and doesn’t have any unintended consequences.
Disability discrimination and reasonable adjustments
A lack of flexibility could cost your company, losing you talented workers and impacting on diversity, as employees with a disability or long-term health condition are significantly more likely to change jobs (21%) or leave their profession (32%) due to lack of flexibility.
Flexible working has many benefits for workers with health conditions and disabilities, and 72% of disabled employees found their disability or condition easier to manage when working from home. Among other benefits, it gives people full control of their working environment and accessibility; saves energy by not having long or stressful commutes; allows people the chance to work when and where they feel at their physical or mental best; and reduces risk factors of travelling in rush hour.
Under the Equality Act 2010, you are required to make reasonable adjustments to reduce the difficulties faced by disabled staff where possible. What is reasonable will depend upon your business circumstances and the employee’s disability.
You may refuse adjustments because they are too expensive, not practical, or won’t make much difference, but you should consider other ways to support the employee. Refusing a request without a good reason could lead to a disability discrimination claim. Discrimination claims are especially costly as they often take longer to conclude than other types of claim and damages that may be awarded in successful claims are uncapped. These disputes are also particularly damaging to your reputation.
In a recent survey only 10% of disabled employees said it was easy to get the adjustments they needed. If your process is so difficult that it causes excessive delays or effectively prevents reasonable adjustments, you may be failing in your legal duties. Combined with other issues, this could also contribute to a generally hostile work environment, putting you at risk of claims for harassment, a form of prohibited conduct under the Equality Act 2010. .
If a disabled employee requests flexible working but not for reasons of their disability, you can treat this as you would any other request. If you are unsure, speak to the employee about the reasons they want to work flexibly.
Discrimination by association
Discrimination by association occurs when an employee is treated less favourably because of the protected characteristic of somebody they are associated with. This could be a concern if an employee requests flexible working to help care for a disabled or elderly relative.
Nationwide Building Society were recently found to have discriminated against an employee who wanted to continue working from home to help her care for her elderly, disabled mother. In making her redundant because she refused to return to the office, the building society was found to have unfairly dismissed her and discriminated by association. The building society was ordered to pay £350,000 in compensation.
If your employee’s request relates to caring for somebody else who has a protected characteristic, discuss their needs to identify any risks of discrimination.
It is accepted by the tribunal that women are generally more disadvantaged by childcare responsibilities than men , and so policies that impact disproportionately on employees with childcare responsibility can lead to sex discrimination claims. One company was ordered to pay £185,000 damages to a mother who was refused flexible hours for childcare. The company’s mistake was to dismiss the request without any attempt to consider options or alternatives that would work for both parties.
However, you must ensure that the process does not discriminate based on protected characteristics. For example, Acas is clear that requests from parents and carers should not be prioritised over other employees. If your process favours working mothers at the cost of fathers or older workers, you could face claims for sex or age discrimination. Employers may currently be putting themselves at risk in this area, as 35% of workers over 50 felt their employer was more likely to grant flexible working to parents with young children.
It is sensible to outline your company process for considering flexible working requests to ensure all requests are given fair consideration, while balancing your legal obligations with your business interests.
Entrepreneur Debbie Wosskow recently raised concerns that women’s careers may suffer from losing visibility and influence because they are more likely than men to work from home because of caring responsibilities. She argued that flexibility shouldn’t mean institutionalising work from home. You should consider ways to avoid home-workers being disadvantaged, otherwise you could face discrimination claims from those working from home because of a disability or parenting and caring responsibilities. As well as avoiding legal claims, your business will benefit from more engaged workers.
With weaker working relationships, all disputes can escalate
Colleagues who work different hours or from different locations have less time together in the office to build strong working relationships. Microsoft found that employees who met their managers in person within the first 90 days were more likely to build strong relationships with colleagues, be asked for input by their team, or feel supported when discussing tough issues with their manager than those who didn’t meet their manager until later on, if at all.
Remote workers rely on emails or video meetings to replace face-to-face communication which, without tone and body language, can lead to miscommunication. Poor communication can lead to avoidable disputes, while weaker relationships may allow disputes to escalate.
Employees who didn’t meet their manager in the first 90 days were also less likely to seek feedback or get effective coaching, which could also lead to performance issues, while employers say flexible working has had a negative impact on the culture of the organisation and managers’ ability to lead teams effectively.
Unfortunately, there is no easy fix to better communication and working relationships. But working alongside each other in the office doesn’t guarantee there won’t be disputes. (In fact, you may just face different disputes caused by issues with sharing spaces, such as noise and heat.)
Wherever your staff work, a good grievance policy can help by setting expectations about when and how staff should raise an issue. It will also help managers to deal with disputes effectively. Where a dispute spills over into misconduct, a good disciplinary policy will make clear the standards you expect of employees and the consequences for failing to meet them.
Your business may also benefit from ensuring new hires to meet their managers early in their employment, and arranging occasional time for teams to meet in person. The data shows a benefit to meeting in the first three months, so doesn’t suggest high levels of contact are needed.
Difficulty meeting your regulatory obligations
Health and safety
You have a duty to provide a safe work environment and reduce risks for all staff, not just those in the office. Of course, this is more difficult for staff who work remotely as you are not in control of the environment. Employees working from home may not appreciate you imposing certain requirements for how they setup their home workspace, leaving potential for conflict. There may also be issues carrying out a risk assessment – you may have to enable and trust the employee to complete their own risk assessment.
It is helpful to explain your obligations from the outset when discussing your working arrangements. To set clear boundaries, you could consider including terms in their contract about how they are expected to cooperate. If an employee puts you at risk by refusing to cooperate, you will then be able to take formal action. You could also consider a policy to set out who is responsible for providing equipment. For example, will you provide standard items or offer a budget so that employees can choose something you are both happy with.
Without the structure of an office day or colleagues around to keep a check on each other, some workers may be tempted to skip breaks and work a shorter day, or work excessively long days to prove they are maintaining productivity. However, employers are required to take steps to ensure that staff adhere to the Working Time Regulations, or your business could face penalties.
Stipulating minimum breaks and maximum hours either in your contracts or policies will help if you need to take action.
Only 70% of HR respondents in the UK said they are ‘very confident’ they know where their staff are working from. If staff are working outside of the UK – as more people are, and plan to – this could impact your tax obligations.
We can’t advise about the impact of remote working on your taxes but, once you know your obligations, we can help ensure your staff don’t put you at risk of tax claims and that you can act if they do.
Perhaps the most contentious aspect of the flexible working debate is whether it helps or hinders productivity.
Many high-profile bosses and entrepreneurs have insisted that working from home is bad for productivity, and some research backs them up, with studies suggesting that remote work is associated with a 10% to 20% drop in productivity. However, another study found that remote workers are up to 9% more productive than those working in the office. 38% of organisations say that more home and hybrid working has increased their organisation’s productivity and efficiency, while just 13% say it has decreased productivity.
Other research suggests that productivity depends on factors other than location. Some surveys found that productivity depended on how it was measured – those who were more productive working from home were simply working longer days, or using the time they would normally spend commuting. Others suggest that the workplace culture itself caused a drop in productivity, as remote working simply compounded issues of poor management and communication.
Whatever your feelings about the debate, you risk claims by denying flexible working requests ‘just in case’ productivity drops. One of the reasons Nationwide’s office-based policy was discriminatory was that it was “not based on actual evidence or rational judgment and was instead based on subjective impressions."
But what if productivity does drop after you have granted the request?
You can manage productivity through performance management and, if necessary, disciplinary measures. Once you have evidence that an employee is not as productive from home you may be able to justify requiring the employee to return to the office, as impact on productivity is a legitimate business reason to refuse requests. (However, a lack of productivity or effort from one employee won’t necessarily justify refusing flexible working to other employees.)
Legal advice can be a valuable investment. Ask a solicitor to draft the wording of your agreements and policies to ensure that you have a trial period for the arrangements and are contractually able to change the arrangements for reasons of productivity. We can also ensure that your processes (and any resulting dismissal) are fair and reasonable, reducing the risk of unfair or constructive dismissal claims.
Avoiding legal problems
It is always sensible to get legal advice if you are unsure of your obligations or feel a dispute might be developing. However, there are some precautionary steps you can take to put yourself in a strong position should anything go wrong:
Update your policies and contracts to ensure the wording protects your business interests. Review policies regularly to keep them up to date and always follow them. Find out more about policies and handbooks.
Keep a record of your decision-making process and the reason for refusing any requests.
Don’t get drawn into a debate about which employee has a ‘better’ claim or is more ‘deserving’. Focus only on whether the business can accommodate the request or not.
Don’t make assumptions or make decisions ‘just in case’.
Work with your employees. If you can’t accommodate a request, try to find a compromise or alternative arrangements. As well as helping avoid claims, this will maintain positive moral and working relationships.
And don’t forget that the Employment Relations (Flexible Working) Bill is due to come into effect next year, giving employees additional rights:
Employees will have the right to request flexible working from day one (rather than waiting until they have worked for you for 26 weeks, the current situation)
They will have the right to make two requests in any 12-month period (rather than just one).
Employees will no longer need to explain the impact of flexible working on the business or how you (the employer) might deal with it.
You must respond within 2 months (rather than 3) and, if declining the request, you must provide reason.
It is never too early to start preparing for these changes. Update your policies so that managers respond quickly and consult employees about any refusal.
Get in touch for advice.
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