The Employment Rights Act 2025 makes further changes to flexible working

The term ‘flexible working’ covers many things, including part-time employment, hybrid working, and flexible hours. Since the pandemic it has become much more widespread, and employees are now more likely to request it. This is often done for personal reasons, for example to help the employee manage other responsibilities outside of work.

The Employment Rights Act 2025 has introduced changes to the process around such requests, with the aim of improving decision-making. The result will be a more structured and transparent process that is more consistent across the UK, but it is also likely that employers will find it harder to refuse requests.

The current position on flexible working

Flexible working requests must be made in writing. The employer then has two months within which to consider the request, complete any consultation with the employee, and inform them of their decision. Employees can make two flexible working requests in any 12-month period.

There are only eight allowable reasons for refusing a flexible working request:

The burden of additional costs
An inability to re-organise work amongst existing staff
An inability to recruit additional staff
A detrimental impact on quality
A detrimental impact on performance
A detrimental effect on ability to meet customer demand
Insufficient work available for the periods the employee proposes to work
Planned structural changes to the employer’s business

The current law does not state in detail how employers must consult with employees, nor does it make any requirement for employers to explain their decision.

What is changing due to the Employment Rights Act?

The requirements around consultation, refusal and notification have all changed.

Consultation

If an employer wants to reject a request, they will need to consult with the employee using a specified process. This will be set out in regulations, and is currently not finalised. The proposed process, which is currently being consulted on, is as follows.

Where an employer is considering rejecting a statutory flexible working request, that employer must meet with the employee making the request. The objective is to consider ways to address challenges with the requested arrangement and explore whether a suitable alternative arrangement can be agreed.
The meeting must be held without unreasonable delay, and must take place within the two-month period for making a decision. In practice, to allow time for potential follow-up conversations to agree an alternative arrangement before a decision is agreed, the conversation should happen within six weeks of a request being made.
The employee must be informed about the context of the meeting in advance to allow them to prepare for it.
A person with the authority to make a decision about flexible working arrangements must attend the meeting. This could be the employee’s line manager, or it may be a different member of staff. They will be referred to as the decision-maker for the purposes of the requirement to consult.
The decision-maker will be required to keep a record of the discussion during the meeting.
The meeting must allow for sufficient discussion of the request and any potential alternatives.
The decision-maker must clarify whether the employee would like the proposed request to be considered as a reasonable adjustment in accordance with the Equality Act 2010.
The decision-maker must clearly communicate any challenges they identify with the original request. They must explain why they feel that it would not be feasible to accommodate the request, or why the request is not reasonable, referring to the relevant business reason(s).
The decision-maker must consider whether there might be ways to navigate these challenges and accommodate the request.
If the potential impacts of a new arrangement are unclear, an employer and employee could choose to trial it for a fixed period of time.
If the original request cannot be feasibly accommodated, the employer and employee must consider whether there are feasible alternative arrangement(s). As with other requests, employers can only reject proposed alternative arrangements where a relevant business reason applies. Employers must record the outcome of this discussion and communicate this with the employee.

Refusal

The existing eight reasons for refusing a request remain, and the ERA 2025 also introduces a new reasonableness test, which always applies. The fact that one of the eight grounds must apply and the employer’s refusal must be reasonable is likely to make it harder for employers to refuse requests.

Notification

The ERA 2025 goes beyond the current requirement that employers should notify employees of the outcome of their flexible working request. It introduces a requirement for employers who refuse a request to explain which of the eight grounds they have used, and also why their decision is reasonable.

Also, the proposed consultation process (in its current form) requires employers to provide written notification of:

the outcome of the meeting: a summary of what was discussed and any conclusions or next steps agreed during the meeting between the employer and employee about the flexible working request (for example, whether alternative arrangements were explored, or if a trial period was agreed), and
the outcome of the request: the final decision made by the employer about the flexible working request (for example, whether the request was approved, rejected, or if an alternative arrangement was formally agreed).

When will this change take effect?

Not known precisely, but likely to be during 2027.

What employers should do now

The key risk for employers is that if an employee is unhappy with the way that their flexible working request has been dealt with, they can bring a complaint to the Employment Tribunal. If they are successful, and assuming that there are no issues of discrimination, the Tribunal will either order the employer to reconsider the employee’s application or award compensation at a maximum of eight weeks’ pay. A week’s pay is currently capped at £751, so the maximum compensation that can be awarded is £6,008. This aspect of the flexible working regime has not been changed, so even though it may now be easier for an employee to succeed with a claim, the compensation payable under the flexible working regulations remains limited just as it was before.

In practice, however, most complaints for a breach of the flexible working regime are made along with a complaint of discrimination – most commonly indirect sex discrimination, indirect disability discrimination, or a failure to make reasonable adjustments. Compensation for a successful discrimination claim is uncapped. Accordingly, when considering a request under the flexible working regime, both now and under the expanded duty, an employer should consider whether a rejection of the application might be discriminatory and if so, whether any such discrimination is justified (and so not unlawful).

Employers should:

Keep an eye on the consultation and further developments in this area of the law
Consider whether any changes to their flexible working policy are required (although this may be deferred until the new rules are finalised)
Train managers so that they are aware of the change in the law and know how to deal with any flexible working requests received, including the necessary Equality Act considerations
Ensure that systems are in place so that flexible working requests can be dealt with appropriately and in line with the updated law

If you’d like to have a discussion that’s more specific to your particular circumstances, feel free to contact a member of our Employment team.

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