Ninth Standing Committee on Delegated Legislation
Thursday 5 December 2002
[Mr. Roger Gale in the Chair]
Draft Flexible Working (Procedural Requirements) Regulations 2002
The Minister for Employment Relations, Industry and the Regions (Alan Johnson): I beg to move,
That the Committee has considered the draft Flexible Working (Procedural Requirements) Regulations 2002.
The regulations are not a stand-alone measure but part of a package that the Government are committed to introducing. The aim is to give working parents more choice and support in balancing their work and child care responsibilities, for the benefit of employers, employees and their children. In a moment, I shall go more fully into the details of the regulations, but first I shall place them in the wider context of the Government's policies on employment and on families more generally.
Most people accept that the greatest asset of any business is its work force. That seems like a statement of the obvious, but traditional policies and attitudes towards employees have not always recognised the importance or the implications of that. For example, a long-hours culture that values output and productivity less than presence in the office has the potential to prevent many people from fulfilling their family responsibilities outside work.
Balancing conflicting demands on time and energy can be difficult and frustrating, and can have a detrimental impact on the workplace and the family. The traditional model of male breadwinner and female housewife has increasingly become the exception rather than the rule. Our employment policies have to reflect the reality of the modern workplace. Employees, whether male or female, should not have to choose between a career and a family.
Flexible working was identified as a key issue for both employers and employees during the Government's consultation on the Green Paper ''Work and Parents: Competitiveness and Choice''. However, automatic rights were generally considered to be inflexible. They were not always the solution desired by parents, and employers felt that they were a step too far.
The Government therefore set up the independent Work And Parents Taskforce to examine how we could best meet parents' desire for more flexibility in their work patterns in a way that was compatible with business efficiency. The central objective was to find a way of legislating to enable employers to create additional opportunities for parents of young children, with the emphasis on developing a policy that was focused on and workable for smaller businesses. Key to the taskforce's terms of reference was a commitment to build on existing best practice
Column Number: 004
and to design a light-touch legislative approach that gave parents of young children the right to make a request to work flexibly and to have their request considered seriously by their employer.
The taskforce consulted widely before making its recommendations. In so doing, it gave the Government the opportunity to facilitate a genuine culture change in the workplace. The new right has been designed to be straightforward and light touch and to meet the needs of employers and employees. Rather than provide an automatic right, our approach has been to promote dialogue in the workplace and to encourage both parties to think creatively about flexible solutions.
The right to request is not available to all employees. Such a right would be unmanageable for businesses and place a huge burden on smaller employers. In any case, the Government's work-life balance campaign continues to promote the wider case for flexible working through best practice, and many employers have already recognised the value of offering some degree of flexibility. However, best practice takes a long time to filter through and become standard. The pace of change must be quicker for working parents and their partners who daily juggle the conflicting demands of raising children and meeting work responsibilities.
It is right to target working parents, and those with young or disabled children face the greatest challenges. The taskforce findings confirm that parents with children under six are the group with the greatest demand for flexible working. Under the new right, parents of disabled children will be able to make requests to work flexibly until their children reach the age of 18.
The draft regulations detail the procedure that must be followed by employee and employer when making and handling an application to work flexibly under the new right, and specify the time periods for each stage of the process. The employer will then have a duty to consider the request seriously and to follow the specified procedure.
Parents will apply to their employer in writing, stating how they meet the prescribed eligibility criteria as to their relationship with the child, and the date from which they wish to alter their working hours. Parents will also have to set out the working pattern that they wish to adopt and explain what effect they believe it will have on the employer and how any effects may be dealt with. The next step in the process will be for the employer either to agree the request without further discussion, or to arrange a meeting to discuss the request and consider alternatives if necessary.
The regulations provide the employee with the right to be accompanied at both the initial and any appeal meeting; they define the companion as a
''worker employed by the same employer''.
That allows for the companion to be a local trade union representative, but not someone from outside the business. I believe that that definition is the one that keeps us closest to the taskforce's recommendation.
Column Number: 005
When the employer is unable to grant the request, he must set out his reasons fully—indeed, the employer can reject the request only on one or more of the business grounds specified in the Employment Act 2002. Of course, an employee has the right to appeal a negative decision through internal appeal procedures; and, ultimately, if an employer has breached the procedures set out in the regulations or based a rejection on incorrect facts, the employee can go to an employment tribunal.
The procedure is designed to encourage both parties to resolve a disputed request at the workplace, and we believe that every effort should be made to do so. It is our intention that alternative dispute resolution mechanisms should be available to both parties and we intend that ACAS should widen its arbitration scheme to cover requests for flexible working. Employment tribunals will be a last resort: we estimate that only 1 per cent. of requests will have to end up at a tribunal and that most cases will be settled at the initial meeting.
When cases reach an employment tribunal, employers will need to demonstrate that they have gone through the procedure, including holding meetings and giving a written explanation to the employee of the business reasons why the request could not be accepted. The tribunal will verify whether the employer has followed all the proper procedures and will examine any disputed facts. Tribunals will not have the power to substitute their judgment for the business reasons, but they will be able to send the case back to the business for reconsideration and order compensation where appropriate. That will provide parents with the assurance that their requests will be taken seriously by the employer.
We have estimated in the regulatory impact assessment that there will be 480,000 additional requests for flexible working each year and that about 80 per cent. of them will be accepted or a compromise reached. That means that hundreds of thousands of working parents and their families will benefit from an improved family life. The economy will also benefit, with savings of about £90 million in recruitment costs alone. However, processing requests and accommodating them is not without cost. We calculate that one-off implementation costs will be about £34 million, plus recurring costs of £296 million per year. That works out at an average of about £160 per request.
I consider the cost across British business to be justifiable, especially because helping parents to balance their work and child care responsibilities will, in fact, be good for business. Employers who have adopted flexible working practices report significant benefits to their business; improved employee commitment, motivation and loyalty; reduced absenteeism, sickness and stress; reduced recruitment costs—
Mr. Andrew Lansley (South Cambridgeshire): Before the Minister leaves the subject of the regulatory impact assessment, I want to draw his attention to the fact that the explanatory notes refer to the series of consultations that took place, but the RIA does not specify in detail what views were received
Column Number: 006
during the consultation and whether representations were made to the Minister and his Department suggesting that changes in the regulations' structure would have been desirable.
Alan Johnson: We published a response to the working parents Green Paper and a discussion document ahead of setting up the taskforce, but the hon. Gentleman is right. Because the taskforce was working to a strict timetable and presented its final report only weeks before we could introduce the provisions in the Employment Act, there was not the same time to comment on the proposals. However, that was last February or March, so there has been plenty of time to comment since. Although there have been arguments about the detail, there has been broad consensus among employers and employees. That was reflected in the taskforce, which comprised business people—including small business representatives—trade unions and other interested parties.
Mr. Tony Lloyd (Manchester, Central): My hon. Friend is not normally coy, but today he has been a little coy about an important detail—he has not mentioned the award that the tribunal can make. He can help the debate in two ways by saying, first, what the award is and, secondly, whether there was a divergence of opinion on it. If there was, what did that divergence represent? Those details may be quite important.