Employment Rights Bill

Baroness Penn Excerpts

Committee stage
Thursday 8th May 2025 Lords Chamber

Moved by

[Baroness Penn]

64: Clause 9, page 35, line 35, at end insert—
“(1A) In section 80F, for subsection (8)(a)(i) substitute—“(i) has received a job offer, and”.”

[Baroness Penn (Con)]

My Lords, I rise to move Amendment 64 in my name. This amendment makes a simple change to the right to request flexible working. In 2023, the Employment Relations (Flexible Working) Act amended the right to request flexible working so that it applied from the first day of employment. Previously, employees needed to wait for 26 weeks as a qualifying period before making a request. That was a good move forwards, but in practice, this still means that when finding and taking a new job, an employee might need to leave a role that offers them the flexibility they need without knowing whether their new employer can accommodate their responsibilities outside work. If that request is then denied, the employee may find themselves in an impossible situation, forced to choose between their work and their responsibilities outside work. Employers might also find themselves having gone through a whole recruitment process, having waited for their new recruit to work a notice period for their previous employer, only to find that they cannot accommodate their new employee’s request and potentially having to start the recruitment process again. To me, that is a lose-lose situation, leaving both the employee and the employer worse off.

TUC research shows that two in five mothers do not feel comfortable asking for the flexible working they need during a job interview, for fear that they will face discrimination or have their offer withdrawn. Changing the law to allow flexible working requests from the job offer stage would give candidates vital protection. As I have said, the change would also benefit employers. It would create a legal framework for an open, honest conversation about working patterns before contracts are signed, ensuring that both parties can agree on arrangements that genuinely work for them. It does not change employers’ need to consider a flexible working request, nor their right, having given it proper consideration, to say that it does not fit with their business needs. Such a change would and could support fairer hiring, greater inclusion and better long-term retention.

Flexible working can unlock economic opportunities for growth. Indeed, the post-implementation review of the Flexible Working Regulations 2014, which extended the right to request flexible working to all employees, not just those with caring responsibilities, showed that flexible working can reduce vacancy costs, increase skills retention, enhance business performance and reduce staff absenteeism rates. It has the potential to bring people back into economic activity who would otherwise have left the labour market.

The noble Lord, Lord Londesborough, spoke about the importance of bringing older people back into work, along with people with disabilities and those who have been on benefits for a period of time. These are people whom the Government are spending a lot of time and effort trying to re-engage into the workforce for their own good and for the good of economic growth. This change could help do that.

On these Benches, we have emphasised the benefits of having a flexible labour market, and, in my view, that means one where people are able to move easily between employers. I think this amendment would support that, so I would be interested to know what the Minister thinks of this proposal. I beg to move.

[Baroness O'Grady of Upper Holloway (Lab)]

My Lords, it is a pleasure to follow the noble Baroness, Lady Penn. I shall speak to Amendment 66 in the name of my noble friend Lord Watson, who is unable to be in his place today due to a long-standing family commitment.

Clause 9, on flexible working, will make a huge difference to working people, including those with caring responsibilities. Many of us know all too well and very personally the daily juggling-act miracle that working mums especially are expected to perform. Anything that makes their lives easier has to be welcome. Flexible working has the added benefit to business and for the wider economy of making it easier for carers to both enter the workforce and stay there. This will help close the gender pay gap, reduce child poverty and help keep mothers and babies healthier.

Amendment 66 seeks to address the concern that, to be effective, those new rights must have teeth. I know that my noble friend Lord Watson would want to acknowledge the support of Maternity Action and the National Education Union in preparing this amendment. Amendment 66 would require the Business and Trade Secretary to review and publish a statement on the adequacy of the maximum compensation which an employment tribunal can award where an employer has not followed its obligations in dealing with an employee’s flexible-working request.

Currently, employees have the right to request flexible working, but employers can refuse on a wide range of listed grounds. Clause 9 boosts employees’ rights by introducing a reasonableness requirement, meaning that employers will be permitted to refuse a statutory flexible-working request only if it is reasonable to do so on one or more of the listed grounds. This new requirement is a positive step towards making flexible working the default. The problem is about the maximum compensation which an employment tribunal can award when it upholds an employee’s complaint about how an employer has treated their flexible-working application.

Currently, the maximum compensation that an employment tribunal can award is eight weeks’ pay, capped at £719 per week, which is a total of £5,752. This low compensation cap does not reflect the devastating cost to a worker where that flexible working has been unreasonably refused. Maternity Action and trade unions have documented how unreasonable refusals effectively force employees—particularly many new mothers and other carers—out of their job, often into lower-paid and less secure work or out of work altogether.

Flexibility should be a two-way street for the employer and worker, but in the real world too often it is mothers who are paying a high price. Set against the expense of legal representation, the low level of compensation available deters mothers from pursuing a flexible-working complaint through an employment tribunal. Their only meaningful recourse may be an indirect sex-discrimination claim against their former employer for which compensation is not capped. However, such claims are often long, complicated and extremely stressful. It is much better to send a signal that the Government are serious about enforcing flexible working rights so that employers are encouraged to do the right thing in the first place.

In the Bill’s impact assessment, it is stated that an aim of the changes in Clause 9 is to allow an employment tribunal to scrutinise whether the decision to reject a flexible working request was reasonable. For that to be effective, penalties should be introduced that reflect a substantive failure to act in accordance with a new reasonableness requirement. The Government’s aim of making flexible working the default is very welcome, but I hope my noble friend the Minister will consider bringing forward an amendment on Report or provide reassurance that other routes will be taken to ensure that the new right to flexible working is one that will be enforced in practice and that workers who are unreasonably refused such arrangements get adequate compensation.

--- Later in debate ---

[Lord Katz (Lab)]

I thank my noble friend for that. I certainly will not try to better his knowledge of employment law and, indeed, compensation for penalties in employment law. What I will say is that the basic principle that this amendment is calling for is not necessary. We have the powers to do what is behind the amendment already in the Bill. Indeed, it is up to individual organisations to engage if they think that that power needs to be used more frequently or to a greater extent.

[Baroness Penn (Con)]

My Lords, I thank all noble Lords for their participation and support and my noble friend Lord Ashcombe in particular for his comments, which demonstrated very practically the benefits of flexible working to businesses and in running teams effectively. I also thank the noble Lord, Lord Fox.

Just to emphasise further the potential benefits of flexible working for businesses and in terms of getting people re-engaged in the workplace, research conducted by the Behavioural Insights Team has shown that offering flexible working can attract up to 30% more applicants to job vacancies, and work by the ONS revealed that older workers working flexibly would be more likely to plan to retire later. Those are just two further specific examples.

I will speak just briefly to the other amendment in this group. I heard how well put the noble Baroness’s argument on behalf of her noble friend was, but I also hear the nervousness around increasing the number of issues that go to employment tribunals and then, across this Bill, the burden that will be placed on tribunals and the delays for both employers and employees caught in that system. The Minister said that perhaps it had, in recent years, been underinvested in, and that that was something the Government would seek to address. I would therefore be interested to know from Minister whether that is something that the Government will seek to address, whether he can say what additional investment will go into the employment tribunal system to prepare for the Bill and whether he will also commit to that investment going in ahead of the commencement of the Bill, so that we have the system in place to deal with some of the changes that we have heard about. He may wish to return to that point at a later point in the debate—he is not leaping to his feet right now.

I acknowledge that, although my amendment would change the legislative framework for flexible working, it is really about changing the culture to one where you can have the conversations as early and openly as possible. However, in how we have approached flexible working in legislation, we have underpinned those changes with legislative rights, so that people have rights to come back to.

I was slightly confused by the noble Lord’s response to my amendment. He said that, in practice, it is what happens anyway, but it would not be appropriate to underpin it with legislation. I was not totally clear why not, when we underpin the rest of the system of the right to request flexible working with legislation. He also said that if someone had their job offer withdrawn because they had made a request for flexible working, that would be covered by existing discrimination legislation. I do not believe that would be the case. It would be the case if their job offer had been withdrawn because they had a protected characteristic.

Actually, I think that one of the important things about the shift in flexible working that we have seen in recent years, and the 2014 move to extend that right to request to everyone, not just mums, dads or carers, is the changing of the culture around what flexible working means. It is really important for those people with caring responsibilities and other responsibilities in their lives, but it is really important for a whole host of other reasons, and we cannot second-guess people’s individual circumstances when they request flexible working. If someone has been made a job offer and they request flexible working, I do not think that current legislation will protect them if that job offer is withdrawn on that basis.

[Lord Katz (Lab)]

I would be very happy to write to the noble Baroness to clarify our understanding of the way that the discrimination order would operate in that scenario. Perhaps the way that I was explaining it was not clear enough, but we think that it is the case that a lot of what she is asking for in the amendment will be covered.

[Baroness Penn (Con)]

I thank the noble Lord for that offer; I really appreciate it. Just to touch on the points made by my noble friend Lord Jackson, I absolutely heard his support for flexible working. In fact, one of the points I just made is that I am really keen, as noble Lords will hear from me on later amendments on paternity leave, that we shift some of the assumptions around who might need and use flexible working and other kinds of flexibility in the workplace, so that we do not assume that it is just the women or the mums. Then they might actually face less discrimination, because an employer cannot look at someone and say, “I think this person’s going to make a particular request of me and I’m a bit nervous about that: how’s that going to work?”

The whole basis of this, and the whole success behind it, will be in having the support of employers. This is an area where culture has shifted. There is further to go among some employers, but they really see the benefits of this in their workplaces, so although I have tabled an amendment to provide a legislative underpinning to things, I think it is about changing culture and having a more open conversation. With that, I beg leave to withdraw my amendment.

Amendment 64 withdrawn.