Labour's flexible workplace plans: 4 key updates for SMEs

In the last few years, remote work has gone from a radical experiment to becoming a normal part of everyday life for workers and businesses everywhere. Undoubtedly, this has pros and cons for everybody. But for the Government, it creates a key priority: To extend flexible working rights to more employees and help create a better work-life balance for all.  

Achieving this goal is a central part of the new Government’s employment rights reforms. For SMEs, that means we can expect a range of new rules to come into force over the next few years.  

Some of these are updates to existing legislation, others are newer rules. Either way, if you want to stay compliant, you’ll need to be aware of the changes and what they’ll involve. Here’s what you need to know.  

 

1. Flexible working - existing protections 

“In today's rapidly changing working environment, flexibility isn't a perk anymore - it has become a necessity within the workplace. For SMEs and HR professionals, this creates a challenge in navigating this shift. 

But it can also be a real game changer for your business, because offering flexible working options really makes you a much more attractive employer and gives you the opportunity to retain your people and make them much more productive while they're with you.” 

- Juliet Price, Founder & Managing Director, Park City Consulting 

Before we can discuss upcoming legal changes around remote work, it’s helpful to first recap one that has already happened. 

In April 2024, the Employment Relations (Flexible Working) Act 2023 came into force. 

The law was passed by the previous Government and aimed to give employees more scope to request flexible working conditions, where appropriate.  

Under the new rules, employees are now legally entitled to request flexible working conditions, including “working hours, times and locations”.  

Employers aren’t required to grant these requests. But if they choose not to, there are several legal duties they’ll have to adhere to: 

• Requests must be officially responded to within 2 months
• Applications cannot be refused without the employee first being consulted
• If requests are refused, one of eight 'legitimate business reasons' must be provided
  

These business reasons enable employers to refuse requests when they aren’t suitable for the business. This could include industries like retail and hospitality, where work requires staff to be in a physical location.  

How to build a compliant process for flexible working requests 

A flexible working requests platform like Breathe is by far the simplest way to guarantee compliance with flexible working requirements. Here’s how it works: 

• Employees can fill out requests through an easily accessible digital portal
• All requests are stored in a single central location, so nothing gets lost or forgotten
• Employees and managers are prompted to fill out and review requests in a consistent and compliant way
• The Breathe platform sends reminders to relevant stakeholders when the two-month response window approaches
• The platform automatically updates compliance requirements when new laws come into effect 

2. Further changes to flexible working regulation 

In their pre-election manifesto, the new Government pledged to implement a new ‘right to flexible working’, specifying that flexible work conditions would now become the default setting.  

Until October 2024, we had few details on what these changes would involve or how they would work.  

Since then, the draft Employment Rights Bill has been published. Now, we can see that the changes will be quite limited.  

Like other reforms in that bill, we expect these to become law at some point over the next two years, but we don’t currently have an exact date. When they do, here are the changes from the previous legislation:  

• Employers can only refuse flexible working requests if it is ‘reasonable’ to do so
• If so, the employer must state the grounds for refusal when responding

Since the eight legitimate business reasons are the same, this makes very little meaningful difference to the existing requirements.  

Nonetheless, businesses should double-check that ‘reasons for refusal’ are included in responses to flexible working requests where necessary. The easiest way to stay compliant is to ensure you’re always using one of the Government’s pre-established ‘eight legitimate business reasons’.  

📖 Read more: 6 vital things to consider in your flexible working policy 

3. The right to switch off 

Before the election, the Labour Party also pledged to introduce a legal 'right to switch off', helping to improve work-life balance for employees. This is designed to help address the increasingly blurred lines that exist between work and personal life, especially for those who work remotely.

The policy wasn’t included in the recently published Employment Rights Bill. But it’s likely the change will still be introduced later, as an amendment to existing legal guidance.  

Right now, it’s difficult to tell what the changes will include and when they’ll be implemented. But we can expect it to include guidance advising employers not to contact employees outside of working hours, except with good reason. 

For now, employers don’t have any changes to make. However, you may want to get ahead of the changes by creating an ‘out of hours contact policy’, so everybody is clear on when messages can and can’t be sent.  

4. The right to a four-day working week

Unlike other changes in this blog, this wasn’t announced before the election. Nonetheless, in the weeks after the Government came to power, reports emerged that it was considering implementing a legal right for employees to ‘request a four-day working week’. 

This right would only cover the ‘compressed four-day working week’ option, where employees work the same number of hours across four days instead of five. The right, for instance, to work 80% of hours at 100% pay was not included in the announcement.  

Either way, the right to a four-day working week was not included in the Employment Rights Bill. Since then, we haven’t received further guidance on how, when or if it’ll be implemented.  

When the announcement was made, there was plenty of noise and attention in the media. But it wasn’t entirely clear how the announcement differed from the existing flexible working protections that came into force in 2024 (see first section).  

At this point, we don’t know whether this will be introduced as separate legislation, updated guidance or not at all. 

📖 Read more: The right to request a four-day working week 

Building a flexible future for SMEs

“The first step for HR teams is to prepare yourselves. First, join an HR network, get together, find a consulting partner, look at the legislation and then break it down into bitesize elements. At this point, communication is so important.” 

- Simon Scott-Nelson, Co-Founder, Wellity Global 

Over the last few years, businesses have increasingly made hybrid working a standard part of daily working life. Now, the Government clearly sees the future as a flexible one and is actively aiming to extend these rights as far as possible.  

While most of these rules aren’t coming into effect yet, it pays to be proactive. That means building future-proofed policies that offer flexibility where it’s sensible and embrace new ways of working. And if you offer flexible working as standard, you won’t have to make compliance changes when the new laws come into effect.  

The changes to flexible working are just one part of Labour’s workers’ rights reforms that will become law over the next few years. This will also include changes around Employment Rights, family leave, DEI initiatives and more.