What flexible working rules mean for your small business

If you have any employees, there’s a good chance at some point that at least one of them will pop in a request to change their contract terms around when and where they work.

Since Covid-19 and the change to the status quo of 9-5 in the office - regulations around flexible working requests have needed to keep up with workers’ wishes. Gone are the days of rigid working hours that are seemingly non-negotiable.

You’ll want to keep up with changing trends if you want to retain staff, and you’ll need to get your head around the direction of travel pretty quickly too. According to research from the Chartered Institute of Personnel and Development (CIPD), some 4 million employees in the UK changed careers due to a lack of flexibility at work, and 2 million of those were in the last year.

So what is flexible working and what are your employees entitled to?

Let’s start with the basics.

What is flexible working?

Since April 2024, an employee has the right to request permanent changes to their contract about how long they work, when they work and where they work. 

That’s any employee - not just carers or parents - and that’s from day one of their employment.

Here are a few examples of the types of requests you might see, and what they mean:

Compressed hours - This is where an employee asks to work their full-time hours but over fewer days, such as working ten days in nine

Flexitime - An employee will choose the hours they work but will agree to fit that around core hours, such as 11am to 3pm, usually set by the employer

Part time - The employee works fewer hours than a full time employee - this is typically by reducing the number of days they work

Remote working - This type of request is for employees who want to work anywhere other than an office

Hybrid working - This is where an employee asks to work both from an office (or place of work as detailed by the employer) and remotely on days which suit them

Phased retirement - As an employee approaches retirement age, they may request a reduced workload or a reduction in their hours so they can make the transition to retirement comfortably

How do I handle a flexible working request?

The first thing to remember is it’s a flexible working request, not demand. In the same way your employee has had time to think about an arrangement that suits their needs, it’s only right that you also have the time to think about how it may impact your business’ needs.

So you don’t want to ignore the request or put it at the bottom of a to-do pile. Firstly because that wouldn’t go down well with the employee who’s asking for the change, but also because you must respond with your decision within two months of receiving the request.

Before April 2024, an employee had to outline how the changes would impact the business along with solutions on overcoming any issues. They no longer have to do this. They could also only make one request in any 12-month period, but that’s also changed and they can now make two requests in that same period.

So however you respond to the request, it’s important that you fully explain your rationale.

Can I decline the request? 

You certainly can decline the request - although the reason for declining it must fall into at least one of the following eight reasons:

• The request will incur extra costs that will damage the business 

• The work can’t be reorganised among other employees 

• Additional people cannot be recruited to do the work

• The request will affect the quality of work

• The request will affect the performance of the employee

• The request will mean the business can’t meet customer demand

• There isn’t enough work to do during the proposed working times

• The business is planning changes to the workforce

If you’re refusing the request, you must discuss the reasons with the employee before you reject it formally in writing. You can use a flexible working request template, provided here by Acas, to communicate your response. The employee may appeal your decision if you have a process for it, but they no longer have a statutory right to an appeal.

What happens if I approve the request? 

Approving the request is straightforward - you just need to confirm in writing that you’re approving it - clearly outlining the agreed changes along with a start date for when the changes come into effect. 

You’ll then need to update the employee’s contract to include the new terms within 28 days of approving the request. 

What’s in it for me?

It might feel like a lot of these changes benefit the employee and there’s not much in it for you as an employer. But there are a few things to consider that can make this mutually beneficial. 

The more flexible you can be, the more likely you are to retain staff. It will improve morale and make the employee feel valued and feel that their time matters too. The better an employee feels, the more likely they are to be more productive. 

Working with the employee on what works for them is also likely to lead to less time off. The request might be to help the employee with an ongoing health condition for example, meaning they can work around medical appointments without needing time out for them. 

It’s worth remembering that more and more employers are now approving these sorts of requests. If you maintain fixed arrangements, such as insisting employees come into the office every day and work core hours of 9am to 5.30pm, then you might find your employees move elsewhere. This can lead to a time consuming recruitment process as well as the loss of valuable members of staff.

Is a four-day week inevitable? 

These new rules came in under the previous Conservative government, so it’s not surprising that the new Labour government are looking at it now they’re in power.

A four-day working week is one of the considerations Labour are floating in their strengthening of flexible working rules, but that doesn’t mean it’s a given. Labour has also made it clear that any changes to employment legislation will be consulted on in partnership with businesses.

And even if it does become a reality - it would likely still fit into the same process we’ve outlined here. So an employee would need to request it and the employer would need to consider it along with its impact on the business. And so far, the rumblings on this subject strongly suggests that the employee would still need to work their full hours in order to receive their full pay, they could just do so in four days instead of five.

So no guarantees on this yet - but certainly one to keep an eye on in the coming months.

If you’d like to know more and to keep an eye on any changes the government website has some helpful information on this.