Once the contracted hours of work have been accepted and agreed between both parties (the employer and the employee), this remains the legal position for the duration of the contract unless there is a request by either party to vary the hours. The employer is expected to provide the agreed number of hours of work for the working pattern that has been detailed and the employee is expected to work those hours.
A variation to contracted hours on the part of the employee would normally arise as consequence of making a flexible working request whereby the employee, in writing, seeks a different working pattern or number of hours per week that they are wanting to work.
Where an employer wants to vary the contractual working hours, agreement should be sought with the employee following meaningful consultation which explains the business case for the proposed variation and takes into account any representations made by the employee in regard to the change.
Flexible working – changes on the horizon
The right to request flexible working for employees is a statutory right that has been in force since 2014. Employees must have at least 26 weeks service at the date that the request is made in writing, outlining the effect that their request may have on the their employer and this triggers the formal flexible working procedure.
Employers must consider the request, deal with it reasonably and come to a decision within 3 months. The legislation recognises that there may be legitimate business reasons why an employer is unable to accommodate such a request and there are eight specific grounds for rejecting the request and these are the only grounds which can be relied upon:
- The burden of additional costs.
- Detrimental effect on ability to meet customer demand.
- Inability to reorganise work among existing staff.
- Inability to recruit additional staff.
- Detrimental impact on quality.
- Detrimental impact on performance.
- Insufficiency of work during the periods the employee proposes to work.
- Planned structural changes
A flexible working request can only be made once in any 12 month period.
However, research has suggested that the current flexible working practices are not fair to employees and therefore the Government plan to make flexible working the default position.
The Government has backed a Private Members’ Bill that is intended to expand and improve the flexible working framework. The Employment Relations (Flexible Working) Bill will:
- remove the requirement for employees to explain in their request what effect they think it will have on their employer
- allow employees to make two flexible working requests per year rather than one
- require employers to consult with the employee before refusing a request
- reduce the deadline for an employer’s decision on a flexible working request from three months to two months.
In addition, in December 2022, the Government responded to an earlier consultation on flexible working reform. In the response, the Government confirmed that it would continue to support the Bill as it progresses through Parliament and that it would also make the right to request flexible working a Day 1 employment right.
These new measures aim to give employees greater flexibility over how, where and when they work to achieve a higher degree of work life balance leading to happier and more productive employees. For employers, this could result in a more diverse working environment and workforce leading to greater financial gains.
These proposed changes will be dependent upon parliamentary time and therefore it could be the end of 2023 or into 2024 before these come into force.
Employer led changes to contracted hours
Where an employer needs to make contractual changes to employees’ terms and conditions of employment, this should be achieved through meaningful consultation and agreement with those employees. The employer must have a business case to support the requirement for change and it is this which should be discussed with employees, together with the proposed impact on their working hours that forms the basis of the consultation process.
There are 3 main options open to the employer:
- To seek agreement to the changes and dismiss those employees who refuse to agree
- To terminate the existing employment contracts and offer re-engagement on the new terms (fire and rehire)
- To impose the changes
Where there is the potential to dismiss 20 or more employees as part of this process, then the employer will be subject to collective consultation requirements or face a penalty of up to 90 days pay per employee for failing to comply with its collective consultation obligations.
Where agreement is not reached, there are additional risks for the employer in the form of unfair dismissal claims and claims for breach of contract.
Fire and rehire is a legal, allowable process but one which should be a last resort. Following the P&O Ferries case where 800 workers were dismissed without following any fair procedure, the Government announced in March 2022 that it plans to develop a new Statutory Code of Practice to encourage employers to act more reasonably when negotiating changes to terms and conditions.
The code emphasises the need to engage with employees and their representatives from an early stage and adopt a collaborative and open approach to the process, acting in good faith and consulting for as long as possible to try and reach agreement. Threatening dismissal should not be used as a negotiating tactic where dismissal is not in fact, an option under consideration when seeking to make changes to terms and conditions.
Adopting this kind of process can adversely affect the business in ways which may outweigh the original benefits of making the proposed changes:
- adverse reputational risk, damage to the brand and competitive position
- reduced morale among the workforce
- actively disengaged employees and reduced productivity
- conflict at work
- resignations, loss of talent and additional cost to rehire and train
- loss of trust and respect in the business and impact on organisational culture, especially if ‘how’ the process to be carried out is not aligned to business values, ethos, and purpose
Employers should consider all options. Can temporary changes be agreed rather than making the changes permanent? Have the employees raised their own alternative suggestions to achieve the business need and have these been robustly considered? Is there an option to compromise or offer some form of incentive in order to gain agreement?
The draft code of practice was published in January 2023 as part of a public consultation which ran until 18th April 2023 with a view to introducing it by the end of this year. The Code, if introduced, would be taken into account by tribunals in determining potential increases in awards by up to 25% where either the employer or employee has unreasonably failed to comply with the code.
If you need any templates such as policies or letters, or require support with this, please contact the SafeWorkforce HR team for advice.