Could new flexible working laws discourage self-employment in the UK?
Millions of Britons to be able to request flexible working on day one of employment. But is it all as rosy as the government wants us to believe?
This week it was announced by the UK government that workers will have a greater say over when, where, and how they work under new plans to make flexible working the default.
This type of flexibility was historically only possible for freelancers and the self-employed, which begs the question: could flexibility like this with the added bonus of sick payrights, paid holidays and pension benefits fizzle out the desire for solo self-employment?
And will freelancers be more in demand to fill in the gaps when salaried workers do not want to work, leaving freelancers with undesirable working hours and less flexibility to take care of their own personal needs, such as childcare?
- Millions of employees will receive day one right to request flexible working, empowering workers to have a greater say over when, where, and how they work
- Businesses set to benefit from higher productivity and staff retention as a result
- Around 1.5 million low paid workers will be given even more flexibility, with new law coming into force to remove exclusivity clause restrictions, allowing them to work for multiple employers
- New legislation will also remove the requirement for employees to set out the effects of their flexible working requests to employers, removing a large administrative burden for both sides.
Flexible working doesn’t just mean a combination of working from home and in the office – it can mean employees making use of job-sharing, flexitime, and working compressed, annualised, or staggered hours.
The raft of new measures will give employees greater access to flexibility over where, when, and how they work, leading to happier, more productive staff. That is if employers and hiring companies agree to a worker’s requests. The bill at this point does not give workers an aboslute right to flexible working, but it’s a start.
But the argument for greater worker flexibility is growing on employers. Flexible working has been found to help employees balance their work and home life, especially supporting those who have commitments or responsibilities such as caring for children or vulnerable people. This segment of the population has often had to go freelance due to employers’ inflexibility.
The bill does not create an absolute right to flexible working. The political soundbites fail to mention it’s still a case of a right to request and a duty to consider. The final decision will still rest in the hand of the employer, and as previously can be refused on one or more of eight business grounds.
The bill also needs to progress through three additional House of Commons stages, the House of Lords, and Royal Assent. So, the fat lady is not even close to warming up her tonsils. In summary, everyone should keep calm and move along. Nothing to see here.Sarah Loates, Loates HR Consultancy
The same reasons apply in the US where 64.6 million Americans are now working independently, a dramatic 26% year over year increase and 69% growth since 2020.
“Beyond the pandemic and macroeconomic climate, the underlying factor driving the thrust in independent work is institutional mistrust,” according to Miles Everson, CEO, MBO Partners, a direct sourcing platform that enables enterprises and independents to work efficiently together.
“We don’t trust institutions to have our best interests at heart and our proof points have mounted as we have faced the challenges of the past few years. As we have come to question our view of security, workers have realized that creating a job is no greater risk than having a traditional job,” says Everson.
But not all HR professionals are welcoming the new changes. Some see it as just political lip service and a media stunt.
“This is an Emperor’s New Clothes story, politically repackaged hyperbole to garner media coverage,” says Sarah Loates, who runs Loates HR consultancy.
According to Loates, the legislative proposals “simply tinker around the edges” of current practice. Here she explains: “The bill does not create an absolute right to flexible working. The political soundbites fail to mention it’s still a case of a right to request and a duty to consider. The final decision will still rest in the hand of the employer, and as previously can be refused on one or more of eight business grounds. The bill also needs to progress through three additional House of Commons stages, the House of Lords, and Royal Assent. So, the fat lady is not even close to warming up her tonsils. In summary, everyone should keep calm and move along. Nothing to see here.”
Arguably, there is some reason to celebrate for some. The UK government stated that the announcement comes alongside new laws coming into effect that will “allow Britain’s lowest paid workers, often agency workers, to work more flexibly and boost their income through extra work.”
Minister for Small Business Kevin Hollinrake said:
Giving staff more say over their working pattern makes for happier employees and more productive businesses. Put simply, it’s a no-brainer.
Greater flexibility over where, when, and how people work is an integral part of our plan to make the UK the best place in the world to work.
Exclusivity clauses: what’s different now?
Workers on contracts with a guaranteed weekly income on or below the Lower Earnings Limit of £123 a week will now be protected from exclusivity clauses being enforced against them, which restricted them from working for multiple employers.
These reforms will ensure around 1.5 million low paid workers can make the most of the opportunities available to them such as working multiple short-term contracts. This will particularly benefit those who need more flexibility over where and when they work, for example students or people with caring responsibilities.
While not everyone will want a second job, today’s laws on exclusivity clauses remove unnecessary red tape that prevents those who do – for example gig economy workers, younger people, or carers who cannot commit to a full-time role. The laws will also help businesses plug crucial staffing gaps by giving employers access to recruit from a wider talent pool.
Flexible working: there is still negotiation involved
If an employer cannot accommodate a request to work flexibly, they will be required to discuss alternative options before they can reject the request. For example, if it is not possible to change an employee’s working hours on all days, they could consider making the change for certain days instead. This is where flexibility has its limitations.
The new legislation, backed in the government’s response to the Making flexible working the default consultation, will also remove the requirement for employees to set out the effects of their flexible working requests to employers, removing a large administrative burden for both sides.
The ‘Making flexible working the default’ consultation recognised that flexible working is different for every employee, employer, and sector – it does not come in one size only. For an office worker, they may benefit from a job-share so they can better care for their children, or a factory worker may request different shift patterns that suit their balance between home and work. Because of this, the government will not instruct employers or employees on how to carry out their work, instead we encourage both parties have constructive and open-minded conversations about flexible working and find arrangements that work for each side.
But not everyone is convinved the new rules will work, especially if you are a small business. “On the face of it, this looks like a major improvement for employees. But most small employers won’t like this announcement,” says Steven Mather, a solicitor working with small business owners.
“They’ll have to deal with flexible working requests from day one. In my experience, most flexible working requests are denied because they don’t meet the business requirements and the exceptions and get-outs for a business will remain. That means more requests and more rejections,” he says.
He continues, “Businesses have to be careful not to be discriminatory when dealing with flexible working requests or they’ll have employment tribunal claims on their hands from day one, too. They’ll also have to work a bit harder to reach a compromise on what would be acceptable to the business. The right for low paid workers to do more than one job, removing exclusivity clauses, is a sensible move and stops the sharp practice of employing someone giving them no or low hours and stopping them working elsewhere.”
What you should know about flexible working “rules”
The government has responded to the Making Flexible Working The Default consultation and is committing to in full the following:
- Remove the 26-week qualifying period before employees can request flexible working, making it a day-one right
- Require employers to consult with their employees, as a means of exploring the available options, before rejecting a flexible working request
- Allow employees to make 2 flexible working requests in any 12-month period
- Require employers to respond to requests within 2 months, down from 3
- Remove the requirement for employees to set out how the effects of their flexible working request might be dealt with by their employer
The day one right to request flexible working will be delivered through secondary legislation.
The government is pleased that it is supporting the Employment Relations (Flexible Working) Bill throughout its journey in Parliament. This Bill was introduced by Yasmin Qureshi MP and will make the other policies law through primary legislation.
The response also commits to non-legislative action: developing guidance to raise awareness and understanding of how to make and administer temporary requests for flexible working; and launching a call for evidence to better understand how informal flexible working operates in practice.
The full government response to the consultation on exclusivity clauses is on GOV.UK.