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Flexible working, reducing hours and changing contracts: An employer’s guide for shifting employment needs

On the 31st October, the Coronavirus Job Retention Scheme will come to an end, placing millions of UK jobs at risk. Most businesses have faced unprecedented challenges and financial hardships during the pandemic and are Read more...

Charlotte Hamilton

Solicitor

  • Business Sales & Acquisitions
  • Implemented Share Schemes
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On the 31st October, the Coronavirus Job Retention Scheme will come to an end, placing millions of UK jobs at risk. Most businesses have faced unprecedented challenges and financial hardships during the pandemic and are likely wondering if there’s a way to rescue the workforce and extend a lifeline to employees without this government support.

Over this period, employment trends have shown a strong shift toward flexible working, demonstrating the ways the workforce has adapted to new norms essential for survival in today’s climate. But what exactly is flexible working? And how could it help your business adapt to survive?

What is flexible working?

In short, flexible working is a way of working that suits an employee’s needs. This can include having flexible hours or working from home. All employees have a legal right to request flexible working as long as they have worked for the employer for at least 26 weeks. An employer must deal with a request in a “reasonable manner”, which includes:

  • assessing the advantages and disadvantages of the application;
  • holding a meeting to discuss the request with the employee; and
  • offering an appeal process.

An employer can refuse an application if they have a good business reason for doing so. For example, if the business requires some employees to be physically present in the workplace, or to work particular hours.

Types of flexible working in the context of a pandemic

In September this year, the Department for Business, Energy and Industrial Strategy helped CIPD publish the report, Embedding new ways of working: implications for the post-pandemic workplace. They carried out a survey of over 1,000 employers to determine how the pandemic has impacted employers’ working practices. Popular types of flexible working include working from home, flexible hours and job sharing. Other ways that employers are adapting are changing contract hours by offering compressed hours, career breaks, term-time working and zero hours contracts, which I will detail below.

1. Working from home  

Working from home isn’t possible for all businesses, but for those able to, remote working offers a number of possibilities. The CIPD report found that before the pandemic, the percentage of employers that offered regular working from home opportunities was around 45%. With the pandemic in mind, this figure is now expected to increase to 70%.

For businesses, working from home options could save rental costs on office leases if they’re no longer needed, with some choosing to exit their lease until business picks back up. Employees can also save the time and costs spent commuting and are often able to get on with work with less distraction. Looking into the future, businesses may relocate to towns that are less expensive and closer to their employees or clients. Or they may move into smaller spaces due to less people coming into the office each day.

Whilst there can be less supervision and little social interaction at home, this can be circumvented by the use of technology such as Zoom or other video conferencing tools and communication channels between teams. Generally speaking, working from home can offer a good work-life balance, increased productivity and has been a lifeline for many businesses and employees during the pandemic.

Of course, providing staff with the appropriate equipment to work from home may incur some added costs, particularly if new health and safety regulations are to require that employers assess home workstations.

2. Flexible hours

Employers may offer flexible hours so that employees can start or finish work at a time that suits them. The CIPD report showed that before the crisis, 43% of the employers interviewed offered flexi-hours, and that 39% intended to extend or introduce this option going forward.

Flexible hours can be helpful where employees have parental or other carer responsibilities. During the pandemic, this may also be helpful to those with vulnerable relatives or dependants.

3. Changing contracts

What about businesses that cannot work from home? Or those looking to reduce costs without making redundancies?

Redundancies can include large pay packages which some businesses may not be able to afford. Likewise, if they do survive the pandemic, these businesses may have to invest in the recruitment and training of new staff to replace redundancies.

To retain jobs, employment arrangements may need to adapt to meet the collective needs of the business. Changes to the hours an employee is required to work by offering job-sharing or reduced hours could save a business considerably on salaries. It would require a change to an employment contract and so must be done consensually or in accordance with the terms of the employment contract if allowed.

4. Job sharing

Where business has declined during the pandemic, it might be appropriate to offer job-sharing to employees. Job sharing involves splitting the work of one employee between two or more. It would also require a change to the employment contract terms with respect to pay and hours. Whilst employees would likely work fewer hours, this type of arrangement could save a number of jobs.

The CIPD report found that 26% of employers offered job-sharing before the pandemic and 19% intend to expand or introduce this after the pandemic.

5. Reducing hours 

Employers may also consider offering employees compressed hours, career breaks or term-time working. Whilst these options were less popular amongst the employers interviewed for the CIPD report in comparison to working from home and flexible hours, 25% said that they were likely to introduce or expand compressed hours going forward, plus 19% for career breaks and 16% for term-time working.

Reducing hours involves a change to the terms of an employment contract. Whether it be used as a short- or long-term measure, it could save businesses money on salaries and help retain jobs.

Conclusion

Working practices in the UK are adapting rapidly in the face of unprecedented challenge and financial hardship. Working from home has become extremely popular and offered a lifeline to many businesses. However, as the Job Retention Scheme still has, at the time of writing, a month to go, it is likely that workforce trends will continue to change.

For example, we could expect changes to contracts being made as a necessary means to retain staff, reduce costs and prevent the need to recruit and retrain in the future. Some other employment arrangements could also be made on an ad-hoc, informal, or short-term basis. However, all changes to employment contracts must be made in accordance with UK law. They must be at the agreement of both parties unless there is a flexibility clause for the employer. Above all, care must be taken to avoid unnecessary claims.

At Lawrence Stephens, we’re interested to hear about the innovative ways your business is adapting to the pandemic, and are happy to assist with any queries you may have throughout the process. If you’re thinking about changing the terms of the employment contracts for your workforce, please do not hesitate to get in touch using the details below.

If you would like to discuss any of the topics raised in the above article, please call us on +44 (0)20 7936 8888, email on enquiries@lawstep.co.uk or contact a member of the team below.

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