Lawyers are issuing stark warnings that Labour's ambitious proposals to establish flexible working as the standard default arrangement could impose significant new legal and administrative burdens on businesses across the United Kingdom. Under the forthcoming changes, which are embedded within the new Employment Rights Act, employees will gain enhanced rights to challenge an employer's refusal of a flexible working request through the Employment Tribunal system.
Increased Tribunal Risks and Compensation Awards
Legal experts from TWM Solicitors have clarified that if an employer's decision to deny a flexible working request is judged to be unreasonable, the tribunal possesses the authority to overturn that decision. This could lead to compensation awards reaching as high as £6,000 for affected employees. Oliver Milton, a solicitor at TWM, emphasized that these reforms will likely subject employers to greater scrutiny, potentially increasing their vulnerability to both discrimination-related and non-discrimination legal claims.
Legal Uncertainty and Backlog Concerns
The proposals currently lack clear, definitive guidance on what constitutes reasonable versus unreasonable grounds for refusing flexible work, creating a climate of legal uncertainty for companies. This ambiguity is particularly troubling for smaller enterprises that may not have dedicated human resources departments to navigate these complex new requirements. Compounding the issue, the Employment Tribunal is already grappling with a record-high backlog of cases, a situation exacerbated by the pandemic, which is expected to worsen once the new Act takes full effect.
Broader Employment Rights Act Context
The Employment Rights Act received final approval in December after extensive debates and revisions between Parliament and the House of Lords. The initial set of reforms, which focused on expanding trade union powers for employees, became active last Wednesday. However, a more consequential change is slated for January 2027: the removal of the cap on unfair dismissal compensation in employment cases. This impending shift is anticipated to trigger a wave of redundancy actions by businesses in the fourth quarter of this year, as companies seek to avoid costly layoffs under the new, uncapped regime.
Economic and Employment Landscape
These legislative developments unfold against a backdrop of rising unemployment. Recent data from the Office for National Statistics indicates that the jobless rate increased to 5.2 percent during the October to December period, marking the highest level since early 2021 and slightly exceeding market forecasts. The government's consultation on the flexible working amendments concludes on 30 April 2026, providing a critical window for business input. Milton advises employers to proactively review and refine their flexible working request procedures in light of these impending changes, turning potential challenges into opportunities for improved workplace practices.
