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Flexible working bill receives royal assent: what HR needs to know

The Employment Relations (Flexible Working) Bill received royal assent yesterday (20 July) granting employees across England, Scotland and Wales new powers when requesting flexible work arrangements.

Employees can now make up to two flexible working requests within 12 months, and employers will have to respond to the request within two months rather than three.

The bill has also introduced a new requirement to consult with employees before flexible working requests are denied.

Separate legislation introduced alongside the bill has also granted workers the right to request flexible working from the first day of a new job.

Jump to:

What does the new law mean in practice?

When can HR deny a flexible working request?

What are the different types of flexible working?

What about tax?

CIPD senior inclusion and resourcing adviser Claire McCartney advised employers to familiarise themselves with the new law and review existing policies.

Speaking to HR magazine she said: “It would be helpful to start adjusting internal policies to reflect these changes and to give training to all those involved in the process around the right to request – including HR and line managers within organisations. 

“From a cultural perspective, it’s important to build an open and supportive culture around flexible working where people feel supported to work in different ways.”

Kloe Halls, associate in the employment team at Linklaters, said HR should prepare for an influx of requests.

Speaking to HR magazine, she said: “Employers should be prepared for an increase in the number of requests they have to deal with, as employees will have the right to make two requests every year (as opposed to one request per year under the current rules), and the government is proposing (under separate legislation) that employees will be able to make a flexible working request from day one of their employment (rather than having to wait 26 weeks, as they do now).”


What does the new law mean in practice?

The new law has not set a time limit or guidance on how flexible work consultations should be carried out.

Yet most employers already have a process in place, Halls argued. 

She said: “In practice, many employers will already be meeting with employees to discuss their request and available options, so this change is unlikely to materially impact how many employers handle requests.

“For those who don’t already meet with employees first, the hope is that this will encourage a more transparent, two-way conversation about flexible working requests.”

As the time to respond has reduced to two months, Halls added: “It is important that employers do not allow this to jeopardise their consideration of the request and continue to seek agreement to extend time if needed.”


When can HR deny a flexible working request?

The eight reasons HR can reject a flexible working request, relating to business concerns and effects on performance, work quality or response to demand, remain the same under the Acas code.

Halls said: “Whilst the Act does not change the eight business grounds on which employers can turn down requests, employers should keep an open mind and first explore whether any suitable alternative arrangements are possible.”

In light of the new requirement to consult with employees, Acas is updating its overall code of practice on flexible working.

Halls added: “The updated Acas Code of Practice (currently in draft form) places more emphasis on explaining the reasoning behind rejecting a request, so employers should be prepared to justify and expand on any decision they make in writing.”

Consultation on the changes to the code will remain open until 6 September 2023.

HR professionals can contribute here.

The CIPD has published a guide on how to deal with an influx of flexible working requests, recommending teams encourage a trial period of any flexible arrangement.


What are the different types of flexible working?

Due to the variety of flexible working options Chris Jones, senior associate in the employment practice at Herbert Smith Freehills, advised HR teams to be clear on the differences and what warrants a formal request.

He said: “The fact an employer may already have an agile working environment, in which employees are already able to, for example, work from home a certain number of days per week is not a reason on its own to refuse a formal flexible working request.

“Indeed, the fact it is accepted many jobs can now be done partly remotely means that any decision to refuse a flexible working request must be supported by a strong rationale."

In its overview of flexible working the UK government outlines eight different types of flexible working.

These are:

  • Job sharing
  • Working from home
  • Part-time working
  • Compressed hours
  • Flexible hours
  • Annualised hours
  • Staggered hours
  • Phased retirement


What about tax?

The tax implications of different flexible working arrangements depend on a colleague’s employment status.

Seb Maley, CEO of contractor insurance provider Qdos, told HR magazine: “If an employee request flexible working but remains an employee, from a tax compliance perspective, it shouldn’t be an issue. 

“But if a self-employed individual starts working in a manner akin to an employee, it can have a bearing on employment status compliance.

“In this scenario, businesses are on the hook for missing employment taxes.”

To avoid tax liabilities HR should thoroughly assess the employment status of all self-employed workers from the outset of their contracts.

The UK government’s Check Employment Status for Tax (CEST) tool can help.

Government also published dedicated guidance on the definition of employees, workers (also known as limb (b) workers) and self-employment to help HR advisers.

In complex cases teams can also seek professional advice from specialist consultancies.


Happy with your flexible working strategy? Why not enter it into the HR Excellence Awards?