Refusal of flexible working and how this can cost companies

Refusing flexible working requests costs UK firms £2 billion a year. Flexonomics, a report commissioned by construction giant Sir Robert McAlpine and flexible working campaigner, Mother Pukka, found that flexible working, annually, contributed £37bn to the UK economy. They forecasted that a 50% increase in flexible working could result in a net economic gain of £55bn for the entire economy, while creating 51,200 new jobs.

Flexible working is a way of working that suits an employee’s own circumstances. According to ACAS this can include: part-time working, amending start and finishing times, compressed hours, remote or home working and job sharing.

The current legal position is that a formal flexible working request must be given in writing and can be requested by any employee who has worked for their employer for 26 weeks or more and has not made any other flexible working requests within the last 12 months.

A formal flexible working request can only be rejected by the employer in a select few circumstances, these include:

• If the costs to allowing the flexible working will damage the business;
• The work cannot be reorganised among the other employees;
• People cannot be recruited to carry out the work;
• Flexible working will affect quality and performance;
• The business will not be able to meet its customer demand if they allow the flexible working;
• There is a lack of work to do during the proposed working times; or
• The business is planning changes to the workforce.

The costs to the business may come from two directions, one being the how the rejection affects employees and two, the costs to the business if a legitimate reason for rejection is not given.

1. In a study, conducted by the London School of Economics (LSE), access to remote working increases employee well-being, productivity, innovation and inclusion. Remote working increases employee innovation by 63% on average, work engagement by 75%, organisational commitment by 68%, and leads to 93% of employees reporting that they feel included. It is important to note that this study was only in relation to having access to remote working, the participants were not working from home 100% of the time and were not office working 100%. It is about striking a balance to suit the employee; doing so can have a positive effect on the employee and therefore the business.

The Chartered Institute of Personnel and Development (CIPD) found that flexible workers have a higher level of job satisfaction, commitment and are more likely to increase discretionary effort compared to those who do not work flexibly.

Flexible working can also reduce absence rates, by allowing employees more time to deal with stressors in their personal lives, managing disabilities and health concerns as well as mental health. Flexible working may also reduce the costs and overheads as less office space and equipment is required. Many businesses, notably technology companies, have vacated office space, as they realised much of their work can be carried out from remote locations.

2. Allowing flexible working can help to save companies thousands in legal costs where employees bring claims against them.

An recent case recently demonstrated the seriousness of flexible working requests. In Thompson v Scancrow Ltd, trading as Manors, the employee was a sales manager working for an estate agents that catered to wealthy clients from overseas.

The employee submitted a flexible working request to finish work one hour earlier each day in order to allow her to pick up her daughter from nursery. She also wanted to reduce her working days from five to four days a week. She made suggestions as to who could cover her work when necessary.

The employer refused and gave no explanation of how the permitted grounds to reject a request apply. As a result, the female employee brought an indirect sex discrimination claim on the failure to accept the flexible working request.

The tribunal identified the provision, criterion or practice (PCP), which gave rise to the alleged less favourable treatment, was the requirement to work Monday to Friday, 9-6. The tribunal also acknowledged that mothers were likely to carry more responsibility than fathers and so the PCP put this female employee at a disadvantage.

The tribunal ultimately found that the employer did not have a reasonable explanation for rejecting the request and therefore the tribunal awarded the claimant employee nearly £200,000 for compensation and injury to feelings combined.  The size of the award reflected, amongst other things, that the claimant had not been able to find another job by the time of the tribunal remedy hearing.

This shows that rejecting flexible working requests can have serious consequences for employers. Employers need to ensure that they have reasonable and legitimate reasons for rejecting any requests. It is also important for employers to realise that flexible working may be of a huge benefit, not only to the workforce but also to the business.

Flexible working isn’t just something that can apply to a few sectors; even those sectors that are seemingly difficult to maintain flexible working in could make it work (e.g. healthcare – swapping pre-determined hours with colleagues, or in construction having self-rostering).

Flexible working is also not just about the location where an employee works, but also about the mind-set and inclusivity of people’s working styles and how they can be optimised in a flexible way to assist the business.