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Flexible working: increasingly complex

Today, flexible working arrangements are common to most workplaces and the majority of employment sectors. Employees can be found to be engaged on an…

Today, flexible working arrangements are common to most workplaces and the majority of employment sectors. Employees can be found to be engaged on an almost endless variety of patterns and terms. These include the operation of flexitime systems by organisations which allow employees a broad ability to vary their working day to permanent individual arrangements allowing bespoke home-working or part-time working arrangements. With the forthcoming expansion of the right to request flexible working to all employees, we are likely to see even more requests for flexible working arrangements and, almost inevitably, a greater proportion of employees will ultimately be engaged in a greater variety of ways.

Such flexibility has always raised complex legal and practical challenges. However what we are now seeing is a new wave of complex issues arising from the way in which such working arrangements operate. Two recent Employment Appeal Tribunal Judgments shed some light on the complexities which can arise from flexible working arrangements in practice.

The case of the accrued flexi-time

In the case of Vision Events (UK) Limited v GP, Mr GP had worked for the employer as a multimedia producer for just over four years. As part of the role, if he worked beyond 45 hours per week he was entitled to take time off, at a time to suit the business, under the flexi-hours scheme. He had no right to overtime, but the idea was that he would get equivalent time off when things were quieter. Such flexi-time arrangements are common to many employers, allowing flexibility for peaks and troughs in the workload without the need to incur the additional cost of overtime payments at busy times.

The practical problem with this flexi-time scheme arose when Mr GP was being made redundant. He had accrued a remarkable 1,043 hours of flexi-time, so unsurprisingly as part of his redundancy consultation he demanded to be paid for it. His employer offered to pay him for 50% of the hours accrued, as a “goodwill gesture” but maintained that he had no contractual right to payment. Mr GP declined the offer and brought an unlawful deduction from wages claim.

Whilst there was no express provision in the employment contract which addressed this situation, the Employment Tribunal at first instance found that there was an implied term that payment would be made for accrued flexi-hours. If, as the company claimed, it had a “use it or lose it” approach, the Tribunal considered that it should have spelt this out to employees. The Tribunal observed that the employer knew about the huge amount of accrued flexi-time from timesheets that had been submitted, and was not sympathetic to the contention that the employee should have self-managed those hours. It also suggested that the goodwill offer supported the conclusion that such a term should be implied.

However on appeal by the employer, the Employment Appeal Tribunal reversed this decision. It decided that it was not necessary for business efficacy to imply such a term into the contract and concluded that it was certainly not a term which both parties believed should be implied. They highlighted that a term may only be implied into a contract if it is necessary to do so to make the contract work, or if both parties would have said that such a term was agreed between them. Neither of these were the case here. The EAT also rejected the conclusion on the goodwill offer. It said that it was not impossible to understand that the employer was prepared to make such an offer for these hours in these circumstances and doing so did not create a contractual right.

The practical problems of flex-arrangements

This case does contain some valuable practical lessons for those involved in setting up such schemes or drafting the documents which govern them. Although the employer was ultimately successful, well drafted and clear documentation would obviously have been preferable and would have averted a dispute. It was quite remarkable that the employee had been able to accrue almost 23 working weeks’ worth of flexi-time, with the potential huge value to him and expense for the employer.

Where employees are able to accrue such amounts, there will be inevitable difficulties, not least in managing the taking of such time should the employee wish to do so. Building in a regular review of accrued hours and/or a periodic requirement to take flexi-hours would clearly be part of a good scheme. Similarly, a maximum limit on the amount which could be accrued would also be sensible.

Sometimes a flexible arrangement that appears to suit the employer can have unintended consequences. Short term flexibility is useful, but it can have longer-term effects, especially if not well managed. Had this employee sought to take an extended period of time off once he had accrued the flexi-hours, it would have been difficult for the employer object without risking a breach of the duty of trust and confidence.

The extension of the right to request

The current legal right to request flexible working applies only to those making the request to enable them to care for either a child for whom they have childcare responsibility or an adult who is a partner, relative, or living at the same address. The Children and Families Act will extend this right to all employees with 26 weeks’ service irrespective of the reason for their request. Implementation of this has been delayed but it is now due to come into force on 30 June 2014.

This sudden expansion in those able to make such a request will inevitably result in an influx of requests from those who wish to change their working arrangements. Requests need not only be for part-time working, but can include:

  • Changes to working hours;
  • Changes to working times; or
  • Requests to work from home.

Employers can expect to see new requests such as employees asking to work longer hours on certain days, compressed hours or at home.

In a welcome move, the new wider right will also see the abolition of the current rigid requirements on the timing of the process to consider such a request. What will be introduced is a more flexible obligation to consider requests in a reasonable manner within a reasonable period of time, with a long-stop that the process must be decided within three months. However, the same limited reasons for rejecting such a request remain. Crucially these reasons are focused on business need and the requirements of the role, not upon the organisation’s view of the individual or the merit of their request.

Within your own policies and procedures, some of you will have already extended the right to request to all staff. However you are likely to see a significant increase in flexible working requests because of the increased awareness that will result from the expansion in the law.

Conflicting reasons for requests

As the right to request flexible working is extended, this will throw up the challenge of how to deal with conflicting reasons for requests. Many organisations have found that the first request is relatively easy to accommodate and that may also be true for the first few requests. The more requests are made, however, the greater the challenge in accommodating them. Ensuring that there are sufficient workers in at required times, such as a Friday afternoon, can take some consideration, as does planning for cover in the office if large numbers are working remotely. Operating a “first come first served” system and refusing requests only when they can no longer be accommodated is an obvious approach. The wish to be fair, however, can sometimes lead to employers placing value judgements on the reasons why requests are made. This is almost inevitable if, for example, one employee requests a changed working pattern to care for a child with cancer, when another asks for the time off to do more fishing or to write their novel. However, such apparently sensible judgements are fraught with legal risk.

Protected characteristics

A recent EAT Judgment provides a clear example of the practical and discrimination risks raised by a clash of reasons. In Solicitors Regulation Authority v Mitchell, a female costs-recovery officer had been allowed to work flexibly to assist her childcare arrangements after she returned from maternity leave. She was permitted to work from home on Thursdays and Fridays, with Monday to Wednesday in the office. Unusually, the employer argued that the agreement to this working arrangement had always been subject to a right of review when the employee’s children were older. (In contrast, a request granted under the flexible working legislation, which had not been introduced when Ms Mitchell’s arrangement was put in place, creates a permanent change).

The problem arose when, several years later, a new manager reviewed the team’s working arrangements and noted that the employee’s children were now at school and other members of the team wanted to have, or had been granted, similar arrangements. She therefore decided that, due to operational requirements, she would withdraw the agreement. However, she did not revoke the arrangements for another employee, a Mr Singh who was also working some time from home because he had a son with health difficulties and lived a long way from the office. As a result, when the employee claimed sex discrimination, she succeeded in her claim using Mr Singh as an appropriate comparator.

The Employment Appeal Tribunal Judgment focuses upon the Tribunal’s approach to the burden of proof in discrimination claims and determined that it was correct. The employer’s primary problem was that the Tribunal found the explanation given by the manager to be false. Once it did so, and in the absence of any other satisfactory explanation, they found that unlawful discrimination had occurred, which the less favourable treatment and difference in gender was enough to establish.

Importantly, the Judgment identifies that a valid comparator does not have to be a clone of the claimant. Accordingly, whenever two apparently similar requests for flexibility are made, the risk of an adverse discrimination finding will always arise if the two people involved do not share all of the same protected characteristics. That risk will greatly increase if the manager’s reasons, as they appeared to be in this case, include an unsubstantiated assessment of the individual’s willingness to be a team player or of the merit of the reasons behind their request.

The future

The SRA judgment suggests that with the expansion of the right to request flexible working, we should expect to see an increase in discrimination assertions. Whilst employers have historically been more likely to allow requests relating to childcare, the law on requests for flexible working and the risk of an indirect sex discrimination claim mean that preferring such requests in the future may lead to legal risk. Claims of sex discrimination by men, or of age discrimination by older workers, may arise if mothers’ requests are given greater weight. Refusing a request from someone trying to wind-down in older age (but potentially unable to afford to “retire” altogether) will carry discrimination risk, as could the refusal of a request by a keen DJ who wants time off at the start and end of the week to fit with their other job.

The heart of the problem is that organisations face an apparent conflict between the need to consider each request for flexibility individually, whilst endeavouring to maintain consistency so that assertions of discrimination can be averted. That necessitates focussing upon business need and the employee’s ability to fulfil the requirements of their role, given the precise request being considered. The employer should avoid straying into considering the merits of the reasons for the request or the other requests which the organisation may face in the future if this request is approved.

What to take away

What these Judgments show is that even though having flexible workforce arrangements may reduce the risk of claims, the risks do not go away. Indeed, the increasingly flexible workforce creates its own set of legal challenges.

If you are dealing with a particularly tricky flexible working request, are considering policy change or have any concerns about how your organisation will adapt to the new flexible working regime please speak to your usual Weightmans contact or Phil Allen

A version of this article was first published in Employment Law Journal, Issue 149, April 2014.

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