Thursday, 26 June 2014

Extended flexible work law could prove costly to UK workplace relations

Next Monday (30 June) Liberal Democrat MP Jo Swinson returns to her job as minister for employment relations in the Department for Business, Innovation and Skills (BIS) following a period of maternity leave. The timing is either fortuitous or an example of neat political calculation because Ms Swinson will be back on the very day one of the Lib Dem policy cause celebres, extension of the right of employees to request flexible working, which employers have a duty to consider in a ‘reasonable manner’, comes into effect .

From next week the right covers all employees after 26 weeks in their job, rather than only those with children under the age of 17 (18 if the child is disabled) and certain carers, albeit a qualifying employee cannot make more than one request in a year.  The right to request regulation as limited to employees with young children was initially introduced in 2003 by the then Labour Government and is generally considered to have been a success because employers have in most cases responded positively to requests. The extension to more employees is thus seen as fair and likely to further encourage employers to operate flexible work practices, which the government believes has the positive effect of both improving workplace well-being and business performance. 

Supporters of this kind of soft ‘nudge’ legislation reckon that employers who wouldn’t otherwise offer flexible work options to the majority of staff will see the light and decide to do so if requests cause them to review their ways of working.  It’s thus assumed that although requests, once reasonably considered, can be refused on one or more of eight business grounds (including additional cost and any detrimental impact on the quality or performance of the business) they will in most cases be accepted.  However, especially with regard to the extended right, this may prove to be a mistaken assumption.

Other than a plethora of individual case studies of how individual organisations have benefited from their own use of flexible working detailed research evidence is far more equivocal about the business case for flexible working than advocates of such working arrangements generally suggest. The most comprehensive published review concludes that available evidence ‘fails to demonstrate a business case for flexible working’ (de Menezes and Kelliher 2011). Similarly, analysis of the 2011 Workplace Industrial Relations Survey (WERS) finds that after allowing for the effect of organisational size and sector the number of flexible working arrangements available in an organisation is not significantly related to either better or worse than average financial performance. In other words there isn’t a business case for, or for that matter against, flexible working (Chanfreau, 2013).

The reason for this is that the benefits from flexible working accrue mainly to employees in the form of improved work life balance, job satisfaction, increased commitment and reduced absenteeism but there is no guarantee that this ultimately improves the business bottom line. The key factor appears to be the specific organisational situations in which flexible working practices operate and the fact that ‘flexible working’ is a catch-all term for a variety of practices - encompassing part-time working (the most common form), flexi-time, temporary reduced hours, regular working from home, compressed working week, annualised hours, job sharing and term-time working etc. – not all of which will be suitable for every business.

This explains why most employers’ bodies, while in general lauding flexible working as a means of helping organisations to recruit and retain staff and to increase staff satisfaction, believe that the decision to offer employees flexible work, and precisely which contractual arrangements to use, should be determined solely by organisations themselves without any regulatory push or nudge.  The reluctance of some employers to voluntarily introduce flexible working, especially among small and medium sized enterprises, revolves around organisational difficulties, inability to cover for or substitute some employee skills, and managerial complexity. Given this the business lobby argues that the right to request could prove costly in terms of time and money if employees challenge refusals, and might also disrupt otherwise harmonious workplace relations if some requests are accepted while others are refused.  

Advocates of flexible working nonetheless argue that success of the right to request law in the past decade – the introduction and gradual extension of which raised similar fears – suggests that most employers will respond positively, and next Monday will doubtless see many high profile bosses sitting alongside Miss Swinson to support the change. As someone who generally supports any move to improve the quality of working life I hope they are proved correct in this expectation. But we need to recognise that a right that was targeted at a particular segment of the workforce may not operate in the same way when applied more widely. The initial policy of giving parents and carers the right to request flexible working proved successful because it was pushing on an open door, with ever more employers seeking to attract mothers in particular into flexible work roles in fast expanding service sectors. There is no guarantee that the same business imperative will apply to employees across the board, raising the prospect that the extended law could indeed prove costly to business and disrupt workplace relations. The wisdom of this particular cause celebre is about to be put to the test.

De Menezes, L and Kelliher, C (2011) Flexible working and performance: a systematic review of the evidence for a business case, International Journal of Management Relations. Vol 13, issue 4, December 2011.

Chanfreau, J (2013) Is there a business case for flexible working? National Centre for Social Research (NatCen), July


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