New research has warned that North East firms are ignoring the impact new flexible working legislation will have on their businesses.
Figures from online career portal Jobsite show that 51% of all of businesses in Newcastle are unaware of the newly-implemented changes and have admitted they have not thought about the effects the new rules could have.
The new legislation, mandated as of this week, extends the right to request flexible working to all employees, regardless of dependents, providing they have worked for their employer for at least 26 weeks.
While the majority of employers are not prepared for flexible working, 74% still believe the new flexible working laws will improve their business, as their employees will be happier.
However, some employers are hesitant, with 30% of those surveyed saying they are worried they won’t be able to fulfil employees needs and 22% worried that employees will take advantage, and 17%have concerns they will be understaffed because of flexible working.
Meanwhile, employment experts at leading North East law firm Ward Hadaway has warned the workplace shake-up could see employers struggling to balance their businesses with new obligations to their staff.
Changes to flexible working rights and the introduction of shared parental leave could make life very difficult for some companies and organisations to cope with, particularly smaller businesses.
Joe Thornhill, partner and joint head of employment at Ward Hadaway, said: “Whilst it may be laudable for the Government to want to make modern workplaces more family-friendly, the unfortunate fact of the matter is that this often doesn’t tally with the demands placed on businesses by their clients and customers.
“Having well-motivated staff who feel valued by their employer is clearly good for business, but there is a concern that without adequate time and resources to put contingency plans in place, some companies, particularly those with a smaller workforce, could really suffer if they are faced with a string of requests for flexible working and parental leave.”
A new regime for flexible working comes into force at the end of June.
Whereas previously the right to request flexible working could only be made by employees with young children, that right is being extended to all employees with a minimum of 26 weeks’ continuous service, who will be able to make one such request in a 12-month period.
Whilst employers are not obliged to grant requests for flexible working, they will have to deal with any such request in what is described as a “reasonable manner” within a three month “decision period”.
Employers do have the option not to grant requests for flexible working, but such rejections can only be made for specific reasons laid down in law.
Joe Thornhill said: “Employers and employees have had to deal with a more prescriptive Right to Request flexible working regime for the last 10 years but these changes will open up a larger pool of potential staff who may want to change their working hours, working times or locations.
“Employers will also need to familiarise themselves with the new ACAS Code which provides guidance on the new regime to ensure they comply with the alterations.”
Changes in parental leave which come into force from April 2015 are likely to present further issues to employers.
Under the new regime, qualifying parents, adopters or intended parents in a surrogacy arrangement will be able to share between them up to 50 weeks of leave and 37 weeks of pay.
Joe Thornhill said: “While this is a pretty straightforward concept, the draft regulations which will implement the idea into practice are, in their current form, far from clear and have the potential to cause significant confusion and uncertainty for both employees and employers.”
The draft regulations require both parents to give their respective employers eight weeks’ notice to begin shared parental leave and claim shared parental pay, and the mother can change her mind within six weeks of the birth / placement of the child.
There should be a two week discussion period between the employer and employee within that eight week period.
Sharing leave can be done in minimum periods of a week in any combination and at any time and can even overlap.
If any leave or pay is broken up in to separate blocks of weeks, (rather than running for one continuous period) then the employer’s agreement is required.
There is no requirement for the respective employers of the parents to contact one another to discuss their employees’ leave entitlements or proposed shared parental leave pattern.
Joe Thornhill said: “As with many things, the devil really is in the detail with this proposed legislation.
“As things stand, employees may lose out by reason of uncertainty if, for example, either parents’ employer refuses a request for shared parental leave to run in separate blocks.
“Employees are also limited to making only two variation notices, so what happens if there is a third change of circumstances?
“Also, the administrative and operational difficulties faced by an employer minded to agree to a block shared parental leave pattern would be considerable.
“All in all, this represents a very difficult path for employers to tread – and with penalties for those who fail to comply with the new regime, it is one which they need to tread very carefully.”
Ian Malcolm, managing director of ElringKlinger (GB), believes the new legislation could create disputes.
He said: “We have always supported employees in whatever way we can.
“However with this change in legislation, the emphasis now seems to be on the employer to be able to validate why flexible working is not possible.
“I think there will be a greater risk of dispute between employer and employee, particularly if requests are rejected, and employers will then have to jump through hoops to validate that rejection.
“I do not think legislation is the right way forward. Good employers will already do this on an informal basis and therefore people will be retained by those employers.
“Employees will vote with their feet as the economy continues to pick up, choosing employers who can meet their work-life balance aspirations.
“There are a number of risks to employers including the negative impact if requests are rejected, and limited resource, for example in our case engineering, seeking a reduction in hours and how are they replaced.
“There is also the risk of recruitment costs to the employer – trying to employ part-time resource or ending up with more than required if they can only recruit full time.
“The costs of disputes is also a risk. Currently costs to the employee are limited but the admin burden on the employer is significant.
“There is also the risk of the erosion of USP for those ‘good’ employers who already offer this informally.”
Jennifer Flint, assistant director, people, at Newcastle-headquartered Isos Housing, which employs more than 360 people, said the firm has supported its staff to work flexibly for many years.
She said: “It is an integral part of how we run our business. We have many staff who work flexibly to help them with their family responsibilities.
“This includes working condensed hours, part time working or working from a different office closer to home – and we’ve also invested in home working technology.
“Alongside flexible working options, the majority of office-based staff also benefit from our flexi-time scheme, so they can start and finish early or late, as long as their team can still deliver their service effectively.
“We find staff being able to work flexibly has enormous benefits for retaining talented people who might otherwise feel they need to leave the business.
“From staff feedback provided by Best Companies (we feature in the ‘Best 100 not-for-profit companies to work for’ listing), we know our people really appreciate Isos respecting their need for work/life balance, and we believe happy, contented staff are more productive, and make great ambassadors for the business.”
Rob Charlton, chief executive at Newcastle-based architects Space Group added: " “Whether there is a belief this is right or wrong, flexibility is what future workforces require – Generation Y require it in the workplace and need their employers to understand this, and to have a culture in place to support it.
“Businesses need to consider their approaches to make this flexibility work for their employees. "Business needs to be less focussed on inputs but more interested on outputs – in this day and age, the majority of people can work anywhere and at any time.
“At Space Group we have been embracing this flexibility for some time now, for example one of team who became a father recently took two months extended paternity leave and now works a four-day week.
“Just because people are not in an office it doesn’t mean they are not adding value to the business. "For example, I don’t have a desk in any of our six offices yet I’m able to work wherever I choose to base myself. This proves that a business can be very flexible, if it thinks about its working practices differently.”