Employees have the right to make two formal requests to their employer each year to work flexibly. Flexible working requests may cover a request to change their employment terms if the change relates to the hours they work, the times in which they are required to work and/or their place of work (as between their home and any of the employer's workplaces). Strict rules apply to the process that employers are required to follow and the time scales that apply in dealing with employee requests. Employers must handle requests 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.

Employers may only reject the employee's request on one of eight statutory grounds. The eight grounds upon which an application may be rejected are:

1. The burden of additional costs.
2. Detrimental effect on ability to meet customer demand.
3. Inability to reorganise work among existing staff.
4. Inability to recruit additional staff.
5. Detrimental impact on quality.
6. Detrimental impact on performance.
7. Insufficiency of work during the periods the employee proposes to work.
8. Planned structural changes to the business.

Common errors that employers fall into when deciding flexible working applications include:

• applying a policy too rigidly (i.e., 'one-size fits all' approach);
• rejecting every application on the same ground (e.g., detrimental impact on business performance), which ignores that each case will be different and should be determined on its own merits;
• focusing on the employee's reason for seeking flexible working, rather than the legitimate grounds for rejection of the application; and
• basing the decision on incorrect/inaccurate facts, or with little or no facts to support the decision (making it appear arbitrary).

Employers should also now comply with the ACAS Code of Practice on Flexible Working published on 6 April 2024.

Where a flexible working application is rejected, the employee has the right to bring a claim to the employment tribunal on the grounds that the employer has:

• failed to deal with their application in a reasonable manner;
• failed to notify them of the decision on their application within the decision period;
• failed to rely on one of the statutory grounds when refusing their application;
• based its decision on incorrect facts; or
• treated the application as withdrawn when the grounds entitling the employer to do so do not apply. The employer may treat the request as having been withdrawn by the employee if, without good reason, the employee fails to attend a meeting arranged to discuss their request and a further meeting rearranged for that purpose. Similar provisions apply in respect of a meeting to consider an employee's appeal against the rejection of a request.

The possible outcomes of a successful application to the employment tribunal are:

• compensation of up to eight weeks' pay (capped at £700 per week (Apr. 2024));
• order for reconsideration;
• negative publicity for the employer; and/or
• similar applications being made by other employees (although the process is confidential, if other employees see someone's new pattern in practice, they may ask for the same outcome for themselves).

It is relatively rare for stand-alone flexible working claims to be brought in the employment tribunal and it is generally the case that such claims will also involve additional claims including (but not limited to) unfair dismissal (including constructive dismissal) and/or allegations of discrimination under the Equality Act 2010 (EqA 2010).

ACAS guidance does not recommend the Scheme as a first resort. As a starting point, it is advisable to explore alternatives, such as internal dispute resolution procedures, direct negotiations between the parties or a facilitated conversation with an ACAS conciliator or mediator. The Scheme offers an alternative to having the flexible working claim dealt with by the employment tribunal. It is important to remember that arbitration is entirely voluntary and so the Scheme can only be used if both parties freely agree to engage in the process.

The Scheme is for the resolution of flexible working claims only. Often claims to the employment tribunal will include other claims such as unfair dismissal or claims under the EqA 2010. It may possible for the flexible working claim to be dealt with separately under the Scheme, and for the other claims to be resolved in the employment tribunal, but careful consideration would have to be given to whether doing so would be an efficient means of resolving all of the issues in dispute or whether having all matters dealt with the in the tribunal at one hearing would be more effective. If the parties decide that they want the flexible working dispute resolved by arbitration and the other claim(s) resolved in the employment tribunal the arbitrator may decide, where there is an overlap in the cases or if the evidence or findings in one hearing might have a bearing on the other, to postpone the arbitration proceedings pending the outcome of the claim(s) at the employment tribunal. This, however, is a matter for the arbitrator’s discretion.

The Scheme is not designed to deal with cases that involve complex issues of law, and any such cases would have to be resolved in the employment tribunal.

Parties should be aware that the normal time limits apply for claims to the employment tribunal and where they wish the employment tribunal to consider other claims, they must ensure that these have been made within the time limits. If they have not, although the employment tribunal has discretion to extend time limits in certain circumstances, it is not possible to guarantee in any particular case that it will do so.

Before the hearing, the assigned arbitrator will invite the parties to submit a written statement of their case. This allows the arbitrator to familiarise themselves with the case before meeting to discuss it in detail with the parties.

The hearing will take place at a location that is both convenient and accessible for the parties and will typically last about half a day. While it is recommended that the parties cooperate in coordinating the logistics of the hearing, the arbitrator holds the ultimate authority to establish a date and location should the parties be unable to reach an agreement.

During the hearing, the arbitrator will introduce the procedure for the hearing and then request the parties to present their cases. Typically, the arbitrator will first ask the employer to comment, followed by the employee's response.

Unlike in an employment tribunal, there is no cross-examination of witnesses by a party or representative; instead, the arbitrator will question the witnesses. Parties can propose questions to be asked by the arbitrator, however, if there are issues that parties feel require to be explored further.

Once the case has been discussed, the parties will make their closing statements and summarise the key points they wish the arbitrator to consider in reaching a decision.

At the end of the hearing the arbitrator will ask questions about the feasibility of reconsidering the request to work flexibly. The arbitrator will also ask for information that will help with working out any compensation that might be awarded. This will happen in every case, whether the arbitrator feels the flexible working claim should be upheld or not, so that another hearing is not necessary. To ensure that all of these issues can be dealt with at the hearing, it is important that information such as the level of the employee’s earnings at the time of the alleged breach of the flexible working regulations is made available at the hearing.

After the hearing, the arbitrator will issue an "award" summarising the case, the decision, and, if the flexible working claim is upheld, the remedy. The arbitrator can order the same remedies as an employment tribunal, including an order for the employer to reconsider the employee’s flexible working application and/or an award of compensation.

The award will typically be issued to the parties within two to three weeks of the hearing. Each party will meet their respective costs in attending the hearing, however, if the claim is upheld, the arbitrator may include a sum of compensation to cover the cost of attending the hearing.

The conclusion reached by an arbitrator through the Scheme has the same effect as a tribunal judgment, making it legally binding on both parties. The decision can only be challenged in a limited set of circumstances, such as if the case involves a matter of EU law or the Human Rights Act 1998 (although typically such cases would likely not be suitable for arbitration in the first place). The arbitrator's decision is, therefore, nearly always final.

Many employers are grappling with the challenge of getting employees back into the workplace following a period of unprecedented turmoil. During the Covid pandemic, flexible working (and remote working in particular) became the norm for many employees, and many adapted their home life around an expectation that this flexibility would remain. For employers, there are many reasons for seeking to place limitations on remote working and to encourage and, where necessary, require, a return to some workplace working at least. Hybrid working policies now mandate minimum workplace based working requirements, which vary from employer to employer.

The benefits to be gained may be thought to be largely self-evident (e.g., building and maintaining internal relationships, face-to-face management and training, integration of newer or more junior employees into teams etc.), but not necessarily in every case. For example, in the case of those with line management responsibility, it may be thought obvious that the line manager requires regular direct interaction with junior colleagues for purposes of effective supervision, training, welfare, inter-personal relationship building etc. It would follow that both manager and subordinate therefore require some degree of regular attendance in the workplace together to achieve that. There will be other circumstances where that rationale will not be applicable, however, and a different rationale may be relevant. Specific cases require to be considered on their own merits.

The importance of dealing with flexible working applications on their own merits cannot be overstated. A one-size-fits-all approach is to be discouraged. To be successful at either the employment tribunal or in arbitration, an employer will require to show that the application has been carefully considered and a proper assessment made of the impact that granting the application would have on the employer's business, by reference to the eight legitimate grounds for rejection. Simply rejecting an application because it breaches the employer's hybrid working policy would not be legitimate.

An employer's hybrid working policy will set a base standard for workplace working but should recognise that there will be circumstances where that policy ought to be departed from. Managers should be given discretion to deal with cases on their own merits.

Although an employer cannot lawfully reject an application for flexible working because it does not consider the employee's reason for making the application justifiable, the employee's reason for making the application may be grounds to grant it, for example if the application is made to accommodate factors that affect the employee arising out of a disability. Ensuring that managers who are dealing with flexible working applications are fully aware of the relevant requirements of the Equality Act 2010 in particular, as well as the general rules relating to flexible working applications themselves, is critically important.