Flexible working encompasses a whole variety of arrangements, not just part time working - job sharing, home working, term time only working, flexi-time schemes.

In the current economic climate, can businesses use flexible working arrangements either as part of ongoing cost cutting, or as alternatives to redundancy? There are legal issues in relation to both of these scenarios that employers should be aware of.

It may be beneficial for an employer to have current employees switch to working either entirely at home or to reduced hours on a flexible basis. The best way to achieve this variation is with the consent of the employees.

Where the employees' consent to the new terms is obtained, it is advisable to clarify a number of points: will the new arrangements be on a permanent or temporary basis? If temporary, how long will they last? Will there be a trial period? Will the employee have a right to return to the previous arrangements after a certain period?

Without consent, there are two options available. Which one an employer takes will often depend on the terms of the employment contracts.

The first option is where the contract allows the employer to vary terms of employment. This will be the case if there are "flexibility" provisions. In other words, if the contract provides that the employee will work at whatever location, or whatever hours the company requests. However, even where flexibility exists on paper, only reasonable changes will be enforceable without the express consent of the employee. For example, a contract that states that a full-time employee will work 9 am – 5 pm and such other hours as are necessary, would not permit the employer to reduce the employee's hours unilaterally. On the other hand, a contract that allows the employer to make the employee work at "such location as it may reasonably require" would probably, in our view, permit the employee to be required to work from home, although there is not yet any case law to support this.

If there is no such flexibility in the contract, the employer's other option is dismissal and re-engagement of the employees on new terms. This option, however, may leave the employer open to the risk of unfair dismissal claims.

The issues are different for an employer who as part of a redundancy process, wants to offer reduced hours or flexible working packages as alternatives to redundancy. During any fair redundancy procedure, the employer must consider whether any suitable alternative employment may be offered to the affected employees.

But does an offer to work from home or work reduced hours count? Suitable alternative employment is:

· an offer by the same employer;
· made before the end of the employment;
· which takes effect immediately on the ending of the original employment (or not   more than four weeks after); and
· is either on the same terms and conditions as the previous contract or is suitable employment in relation to the specific employee.

Flexible working arrangements are therefore potentially suitable alternatives, but only if they are suitable in relation to the particular employees that they are offered to.

The employee is not obliged to accept an offer of suitable alternative employment, but, if they refuse, they will forfeit their entitlement to a statutory redundancy payment. The reasonableness of their refusal will be judged on the individual's personal circumstances. An offer that involves a decrease in pay is unlikely to be suitable. But an offer that involves a change in hours and/or location may be.

If a redundant employee accepts an alternative role on different terms, they may be entitled to a statutory trial period of up to four weeks.

There are also several practical issues to consider in relation to flexible working arrangements.

Will there be "core" hours that the employee will be required to work? How will these be monitored and recorded? When and how will the employer communicate with the employee? What equipment will the employee be provided with? Will the employee be able to access the company's systems from home? How will the employer ensure that their information is kept confidential?

These points should be addressed and specified in writing to the employee. In addition, the employer should check that they have appropriate policies in place that provide for the proper use of any equipment and allow monitoring.

Employers should also ensure that their insurance policies apply to any equipment of the employer's in the employee's home and that their employer's liability insurance covers employees working from home.

Health and safety obligations of the employer will extend to employees working from home. Employers should either carry out health and safety assessments of the employee's workstation at their home or, place an obligation on the employee to do so and to remain compliant with the employer's health and safety policy.

With some forward planning that addresses the legal issues, flexible working arrangements may be the answer to cost cutting problems.

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