Lord Sharpe of Epsom:

Moved by Lord Sharpe of Epsom

65: Clause 9, page 36, line 9, at end insert—“(1AZA) But where the employer is— (a) the Security Service,(b) the Secret Intelligence Service, or(c) the Government Communication Headquarters,subsection (2)(b) does not apply, and the notification under subsection (1)(aa) need not explain why the employer considers that it is reasonable to refuse the application on the ground or those grounds.”Member’s explanatory statementThis amendment would exclude the security services from the Bill’s provisions on flexible working.

My Lords, in moving Amendment 65 I shall speak also to Amendments 65A and 67. Amendment 65 is necessary because it lies at the very heart of the nature of the work that is performed by these agencies. The Security Service, the Secret Intelligence Service and the Government Communications Headquarters, collectively known as the intelligence agencies, are at the heart of the United Kingdom’s national security apparatus. Their roles involve highly sensitive operations, often conducted in real time and under exceptionally stringent conditions. They work to protect the nation from terrorism, espionage and cyberattacks, among other threats. The national security landscape is dynamic and fast-moving, and it requires the utmost flexibility, discretion and responsiveness from their employees.

In this context, the introduction of provisions for flexible working could unintentionally create significant risks to national security. The need for immediate action, tight schedules and often secretive operations simply cannot be fully compatible with the predictability that flexible working arrangements might demand. We think it is essential that we avoid the unintended consequences of applying the Bill’s flexible working provisions to the intelligence services. Arguably, this list of services could be expanded, of course, to other operations that have implications for national security. As I said, these services operate in highly confidential environments and their work often involves time-sensitive operations that demand secrecy and agility.

This is obviously a probing amendment: I want to ask the Minister what conversations the Government have had with the Security Service, the Secret Intelligence Service and the Government Communications Headquarters regarding the potential impact of the flexible working provisions on their operations.

On Amendment 67, again I join in the broad support for flexible working that we have just heard in the last group, but this amendment presents an important opportunity to better understand the implications of introducing such a right. We think we ought to approach it with a slightly critical eye: specifically, we need to consider the Regulatory Policy Committee’s feedback on the clause, which has raised several concerns that cannot be overlooked. The RPC rating for this clause was red across all three core areas of rationale for intervention, identification of options, and justification of preferred way forward.

The RPC has stated that there is a lack of sufficient evidence presented to justify the need for this intervention. In particular, it highlighted that there is little evidence to suggest that employers are rejecting flexible working requests unreasonably. This is a key point that must be addressed. The committee’s wider concerns suggest that, without strong evidence of a widespread issue with employers rejecting requests, the Government are introducing a policy that is based on assumptions rather than concrete data. What problem are the Government trying to solve by introducing the right to request flexible working if the case is as the committee has described? Do they in effect believe that the RPC’s assessment is incorrect? What data or evidence do they have to demonstrate that employers are systematically denying such requests in a way that harms workers?

One of the most important questions that this clause raises is whether the intervention is justified. The RPC has pointed out that the rationale for introducing the right to request flexible working has not been sufficiently established, so the purpose of tabling this amendment is to find out what the Government have done in this area and to suggest that the overall environment around this debate would be enhanced by a broader understanding of the situation under consideration.

Amendment 65A seeks to provide clarity and fairness regarding the refusal of flexible working applications in roles where such flexibility would fundamentally alter the nature of the job or undermine critical operational needs. Clause 9, as drafted, is obviously well intentioned but is ultimately a blunt instrument. New subsection (1ZA) sets out a list of what are deemed reasonable grounds to refuse a flexible working request, but they are largely subjective and difficult to quantify in practice. For example, how can an editor reasonably be expected to prove that a journalist’s writing has deteriorated because they are working from home? How does one assess the decline in creative spontaneity that often arises when collaboration in the newsroom is replaced by isolated remote working? This ambiguity could create a climate of uncertainty for employers. Rather than making legally risky judgments, many may simply acquiesce to requests even where remote work may compromise essential aspects of the role. I go back to the example of journalism: this could disrupt the delicate balance of the newsroom and undermine quality, editorial cohesion and the development of junior reporters through in-person mentoring, and so on.

This is precisely why we think that sector-specific exemptions are needed. A one-size-fits-all approach, as is implied in the current drafting, is simply not adequate. This amendment provides a clearer and more realistic framework, recognising that in certain sectors and occupations physical presence is not optional but essential. To expect employers in some of these sectors to navigate the current subjective standards is both unfair and, we think, unworkable. This amendment seeks to offer a constructive alternative by allowing a reasonable refusal where the core nature of the role would be compromised, and by specifying sectors where that risk is most acute.

As I have said, we support flexible working in principle, but flexibility must be implemented with common sense and a clear-eyed understanding of operational realities. We do not believe that the current drafting provides that assurance. We urge the Government to take serious note of these amendments, because we may have to return to them on Report. I beg to move.

My Lords, I support the amendments in the names of my noble friends Lord Sharpe and Lord Hunt. I notice that Clause 9(3) inserts a subsection into the Employment Rights Act which allows for the refusal of a flexible working application in conditional circumstances under two criteria:

“only if … the employer considers that the application should be refused on a ground or grounds listed in subsection (1ZA), and … it is reasonable for the employer to refuse the application on that ground or those grounds”.

A double test is being applied for the decision to refuse an application for flexible working.

Then, the list that the Government have provided in the Bill, at subsection (1ZA) lists grounds from (a) to (i). One might think that this list had been prepared by the unions, because it sets out perhaps a very one-sided view of what the flexible working application might apply. It is indeed pretty abstruse in its expression. It sets out that the grounds mentioned are

“the burden of additional costs”,

the

“detrimental effect on ability to meet customer demand; … inability to re-organise work among … staff; … inability to recruit additional staff”.

All of this is going to be the subject of considerable debate, one would anticipate, in any future employment tribunal claim, and has an air of unreality about it.

In the amendments my noble friends have laid, there is a much clearer solution that excludes various obvious sectors. I ask His Majesty’s Government to confirm that they accept these are sectors where it is much more likely that flexible working will not be as fruitful an avenue for an employee to explore as it might in other sectors. It is worth setting out these sectors in the Bill. They are, obviously,

“journalism and news publishing, … emergency services, … healthcare delivery, … construction and on-site engineering, and … any other sector where … core duties require … collaboration, physical presence, or real-time operational responsiveness”.

All of these, plainly, should be squarely in the Bill.

It will be simply not good enough if the answer that I suspect will come from the Front Bench is, “Well, we can rely on the good sense of the tribunal to squeeze these obvious categories into the vague words that we presently have in (1ZA) or, in the alternative, we have allowed ourselves another power to set out in regulations any other grounds that we fancy”. That, I am afraid, is just not good enough.

The idea that was mentioned in earlier groups by the noble Lord, Lord Leong, that this can all be sorted out by the tribunal down the line, is not good enough, for two reasons. First, the employment tribunals service is struggling under a massive backlog as it is. Secondly—this is perhaps an even more fundamental point—the employment tribunals are not a court of record. One tribunal may make a decision that a certain flexible working request was reasonably refused, but that is not going to be a binding precedent on the interpretation of those provisions. It is simply another first-instance decision that is not from a court of record and not capable of reliance upon in a subsequent tribunal. It would become a precedent only if it were appealed, it went to the Employment Appeal Tribunal and the Employment Appeal Tribunal made a ruling upon it. I suggest that it will not be economic for many employers to appeal those sorts of cases. I therefore very strongly support the amendments advanced by my noble friends.

My Lords, Amendment 65A refers to

“any other sector where the core duties require in-person collaboration, physical presence, or real-time operational responsiveness”.

That could well be argued to be teaching, of course.

As my noble friend Lord Katz said, flexible working is not just working at home—it has a whole range of other alternatives and ways of doing it. The lack of the ability to work flexibly has real consequences for the delivery of a profession that I know a lot about, which is teaching. Some 76% of teachers are women. The biggest proportion of teachers who leave the profession every year are women in their 30s.

I declare an interest in that I am chairing the commission on teaching. We have commissioned some independent research on this issue from the Key foundation, which finds that women in their 30s with children leave teaching in huge numbers. It was 9,000 last year, the biggest number on record of women leaving the profession. They leave when they have children because their requests to work part-time or flexibly are denied.

The noble Lord, Lord Sharpe of Epsom, asked whether employers were just routinely refusing flexible working. Well, in education, yes, they are. The rate of flexible working among graduate professions is about 46%. In teaching, 2% of teachers last year asked whether they could work flexibly. Those requests are routinely denied by employers who have a very poor understanding of what flexible working involves and, frankly, by employers who refuse flexible working because of a one-size-fits-all policy and then find that the teachers who are so precious to them leave the profession.

Last week I spoke to a young teacher with two children who asked whether she could have two registration periods off a week—she would make up the time in other ways—because her youngest child, who is three, was finding it difficult to settle at nursery. That was refused and she has now given in her resignation.

Work on this has been done by the Key foundation and by the Missing Mothers report from the New Britain Project, authored by Anna McShane. When she looked at the reasons for women leaving the profession in their 30s, she found that overwhelmingly they leave because they do not feel that they can manage the demands of the job full time and the demands of bringing up a family. The main recommendation in that report was that flexible working should be supported and encouraged. So, if an amendment that refers to

“any other sector where the core duties require in-person collaboration, physical presence, or real-time operational responsiveness” were to be included in the Bill, it would be used up and down the land by education employers as a “get out of jail free card” for flexible working requests. As the Minister said, that means all sorts of things, including the right to flexible working—and the DfE defines flexible working as flexible and part-time.

We have to get out of the idea that there are whole swathes of the economy—education being the one I know most about—where flexible working is just not possible. We have to start thinking differently about this. If this amendment were agreed, it would make doubly difficult the right to request and to engage in flexible working, which would have such an effect on retaining teachers in the profession and on raising educational standards in our schools. So I think it is a very poor amendment.

My Lords, I will ask one simple question: what is flexible working? Perhaps the Minister could reply to that. I have a lot of sympathy with what has been said; I have always encouraged people who want to work part time, dual workers and so on. I have worked at a senior level in business and in government, both as a civil servant and as a Minister, and the truth is that you have to show some flexibility when things are difficult. That is what my noble friends are trying to capture in the amendment they have put forward.

We need to try to find a way through on this, to encourage flexible working. However, we also have to consider the needs of the employer. That will be true in the business sector—which I know—in the enterprise sector, in the charities sector and of course in government. It is a very important debate and any light that can be thrown on it by either the Minister or my noble friend Lord Murray, with his legal hat on, would be very helpful.

My Lords, this debate has been more interesting than I expected. In looking at Amendment 65, we should acknowledge that the noble Lord, Lord Sharpe, with his former ministerial responsibilities, had considerable interaction with the services that he described, so we should take him seriously.

In Amendment 65A, he sets out certain sectors. However, in seeking to deliver unambiguity, I think he has introduced new ambiguity. Sector-specific exemptions are bringing their own problems. I asked the noble Lord, Lord Murray, what a journalist is. Is it a card-carrying member of the NUJ or is it someone who blogs and calls themselves a journalist, or a group of people? That is just one example of the ambiguity that a sector system brings in. So I am drawn to the idea that we have something like subsection (1ZA) in Clause 9(3).

If noble Lords are worried about the wooliness of it—I am not sure that was the word that the noble Lord, Lord Murray, used—we can work to firm that language up. But to describe the job, rather than try to think of every single job title we want to include in primary legislation, is a better way of going about it. If the description is too difficult to nail, I am sure it is not beyond the wit of us all to find a better way of describing it.

Had the noble Lord, Lord Murray, been here a little earlier, he would have heard the shortcomings of the tribunal system being well exercised, and some comments from the noble Lord to the effect that the MoJ is looking at it. To return to that point, in my speech on the last group I asked for a meeting, so perhaps the Ministers could facilitate a meeting with interested parties on the Bill and the MoJ to find out how it is moving forward on tribunals; we need some line of sight on that. It is something of a capitulation if we say, “The tribunals are no good, so we’re not going to make the right legislation because they won’t be there to uphold it”. We have a duty to make the right legislation, to put it in place and to make sure that the tribunals can deliver.

I share much of what the noble Lord, Lord Fox, says. But the point I was making was that the answer from the Government is, “We’re going to provide imprecision in this legislation, and we’re going to let the employment tribunal sort it out and tell us what it means”. My point was twofold. First, that will take far too long because of the chaos in the tribunal system, and secondly, structurally, the employment tribunal cannot give an answer to that at first instance because it is not a court of record.

Those are good points. Again, had the noble Lord seen an earlier episode of the soap opera of this Committee, he would have heard noble Lords from all around talk about firming up imprecision, which is why I talked about firming up the imprecision of that list of attributes rather than trying to produce a list of businesses and activities that somehow should come into this—an impossible job, frankly. Of course we should have a war on imprecision but, in the end, there are going to be some things that tribunals rule on that will be important, and we need to have the tribunals active and quick to do so.

To some extent, there is an element of creativity around the fungibility of some of these criteria—I think the noble Baroness, Lady Bousted, made that point. If we have some flexibility of interpretation, schools and other organisations that want to hang on to valued colleagues will find a way of using it in order to do that. If we start to rule out professions or rule in very hard and fast rules, we lose the opportunity to retain and attract certain groups of people. I understand the point made, that the more of that fungibility there is, the more so-called imprecision, and there is a balance between the two. That is why I still think that if we have ideas around new subsection (1ZA), that is the way forward on this rather than a list of jobs.

I thank the noble Lord, Lord Sharpe of Epsom, for tabling this group of amendments related to flexible working.

Amendment 65 would exempt security services from the flexible working measures we are introducing through the Bill. These measures include ensuring that employers refuse a flexible working request only where it is reasonable to do so, on the basis of one of the business grounds set out in legislation and requiring that they explain the basis for that decision to their employee. I draw the noble Lord’s attention to the existing provision the Government have made to safeguard national security in relation to flexible working.

I will explain the measure taken in the Bill. Clause 9(7) brings the flexible working provisions into the scope of Section 202 of the Employment Rights Act 1996. Section 202 states that if in the opinion of a Minister the disclosure of information would be contrary to national security,

“nothing in any of the provisions to which this section applies requires any person to disclose the information, and … no person shall disclose the information in any proceedings in any court or tribunal relating to any of those provisions”.

By bringing the flexible working provisions under the scope of Section 202 of the 1996 Act, the Government have already taken the necessary and proportionate steps to protect national security. To respond directly to the question of the noble Lord, Lord Sharpe, we have indeed engaged with, discussed and agreed this approach with the intelligence services.

This amendment proposes a blanket exemption for the security services, which I feel would be a retrograde step, as flexible-working powers have always applied to the security services. This would, indeed, prevent all security service employees from benefiting from strengthened flexible working rights, and it is not necessary in order to manage the risks to national security. The measure that the Government have included in Clause 9 is reasoned and sensible, in that it uses an already established provision to both protect national security in instances where disclosure would be harmful and ensure that flexible working remains an option for thousands of security service employees.

I take this opportunity to say how much we value the work these employees do and how crucial they are to our national security, not least on the day when we are commemorating the 80th anniversary of Victory in Europe. Where possible, they deserve the opportunity to have improved employment rights. As I say, we trust them, and indeed all the security services, to keep our country safe, so I think we can trust them to use these rights responsibly. The amendment proposed by the noble Lord would prevent these employees accessing flexible working via the enhanced right to request delivered through this Bill, whereas the measures we have taken leave this option available in the vast majority of cases where national security is not involved.

It is also worth noting that for many of these employees, certain forms of flexible working, such as remote or hybrid working, may not be feasible, but other forms, such as part-time working, may be available. For example, a security service employee in a desk-based job may be able to arrange an agreement which allows for earlier start and finish times to manage childcare responsibilities.

Amendment 65A would create an exception allowing reasonable refusal of flexible working requests where they disrupt the nature, working environment or training requirements of a role in particular sectors. We had quite a lengthy debate on this, and we heard in a very impassioned and clear way from my noble friend Lady Bousted about the potential impact and knock-on effect. We had a discussion earlier, in considering other amendments from the Opposition, about unintended consequences. In considering this amendment, we have heard about another unintended consequence on a sector that has not been considered.

I agree with the noble Lord, Lord Fox—although I am not entirely sure I would be so highfalutin as to use the term “fungible”—that the prescription this sets out would create some hostages to fortune. I apologise for not seeing the noble Baroness, Lady Neville-Rolfe, when she came in; but perhaps I was doing my Two Ronnies impersonation of answering a question before it has been asked. In speaking to an earlier group, I did indeed quote ACAS’s eight examples of things that can be described as flexible working. It can be compressed hours, hybrid working, part-time, or differing start and finish times. There are a range of things, not just working from home, which, as I said in the debate on the previous group, has become a bit of an idée fixe when we talk about flexible working.

Currently, there are eight broad business reasons why an employer can reject a flexible working request. These were originally set out in 2003 and were restated as part of the renewed ACAS guidance in April 2024. Indeed, they are basically what is set out in the section that the noble Lord, Lord Murray of Blidworth, was talking about. These are not new or cooked up. They cover a wide range of examples and give businesses a huge amount of scope, in the Government’s opinion, to make a reasonable refusal of flexible working. They include extra costs; where work cannot be reorganised among other staff; where performance or, indeed, quality would be affected; where you simply cannot recruit people to do the work in those conditions; when you cannot meet customer demand; when there is a lack of work during the requested proposed working times; or, indeed, when the business is already planning changes to the workforce.

That swift canter through will, I hope, persuade noble Lords that this is already quite well established on the statute book. These reasons include but are not limited to detrimental impact on quality or performance, which is at the heart of Amendment 65A. The Bill will certainly not change those reasons.

It is worth pointing out that the rationale for flexible working and the reasonableness test that we are introducing, which we hope will increase access to flexible working, is an economically justifiable one. There are 370,000 workers currently out of the labour market because they are looking after their family, but they want a job. These measures will help people to access and remain in work, including vulnerable people such as carers and disabled people.

Labour is the party of getting people back into work when they are not working. We want to use these measures to promote that and, in turn—to quote the noble Lord, Lord Ashcombe, in our previous debate—to promote economic growth as a consequence.

These business reasons deliberately strike a balance between protecting employer discretion to legitimately refuse flexible working requests where they are not reasonably feasible and ensuring that employees can access flexible working where they are. The previous Government’s consultation on the 2024 changes to flexible working legislation found that 63%—nearly two-thirds—of employers and business representatives agreed that these eight broad reasons remain valid. This amendment concentrates on sectors which are particularly dependent on employee presence at a workplace. We acknowledge that not all flexible working arrangements will be feasible in all circumstances.

This legislation, and the changes that we are making to it, are not about mandating home working or any other flexible arrangement. It is bizarre for us to have to tell the Conservative Party this, but it is not the Government’s job to determine where flexible working is and is not appropriate. Rather, the intention is to encourage dialogue between employees and their employers to find an arrangement that works for both parties. In sectors and roles where remote or hybrid working is not feasible, an employee may still reasonably negotiate a time-based flexible arrangement, such as part-time or compressed hours. Such arrangements can make work more accessible to underrepresented groups, including, as I have said, disabled people and those with caring responsibilities. This amendment could therefore prevent thousands of these employees accessing time-based flexible working arrangements. This is not something that this Government, or this House, could accept.

Amendment 67 seeks to require the Government to make an assessment of the impact of the Bill’s provisions on flexible working and to produce it before the clauses can be commenced. While I agree with the underlying intention, that the changes to flexible working must be thoroughly assessed, as we have discussed in earlier groups, the Government have already produced a comprehensive impact assessment. The Making Flexible Working the Default impact assessment was published alongside Second Reading in the other place and provides analysis based on the best available evidence on the potential impact on business, workers and the wider economy. We will take the opportunity to refine the analysis where necessary as policy development continues.

As per the process in the Better Regulation Framework guidance, we will publish an enactment impact assessment following Royal Assent, to account for any amendments made to the primary legislation during passage which materially affect our previous assessment of policy impacts. We intend to undertake proportionate monitoring and evaluation of the reforms consistent with the wider Bill measures. Once the reforms have had sufficient time to establish themselves, we will undertake a post-implementation review; again, in line with the Better Regulation Framework process.

The noble Lord, Lord Sharpe, raised the RPC’s opinion of the assessment. The RPC’s opinion refers to the evidence and analysis presented in the impact assessment and not to the policy. The impact assessments provide initial analysis of the impacts that could follow. We will review them as we further develop the policy and continue consultation and engagement. A legislative framework that does not address the challenges that Britain faces today or include up-to-date employment protections has cost Britain’s workers and businesses dearly. The “making work pay” initiative and the Employment Rights Bill are a pro-growth, pro-business and pro-worker package. It supports the Government’s objective to boost growth and improve living standards for all.

The Government continue to engage with, and take timely and expert feedback from, a range of stakeholders, including business, and we will regularly consult with them to provide this important source of evidence. Alongside the legislative changes, a code of practice will be published to assist employers to consider requests and meet their obligations under the new reasonableness test. This is not in the Bill, as the Government have existing powers. It is an important part of our plan to ensure that more flexible working requests are agreed where feasible.

The noble Lord, Lord Fox, requested a meeting to discuss employment tribunals. I apologise for not responding to this during the previous group. I would be very happy to facilitate such a meeting with Peers across the House.

I hope that the noble Lord, Lord Sharpe, is reassured and feels able to withdraw his amendment.

I thank all noble Lords who participated in this very interesting debate and I thank the Minister for his detailed answer. I accept and am somewhat reassured by his answer on Amendment 65; it is good to know that the security services employers have been properly consulted and are content with this legislation. That is to be welcomed, and I thank the noble Lord for it.

I was most interested in the comments from the noble Baroness, Lady Bousted. I believe she said—I apologise if I am misquoting—that employers have a poor understanding of what flexible working involves in education. I am sure they do, and that a lot of parents and people who are involved in education do. It rather makes the case for why Amendment 67 is necessary. The RPC’s opinion may not have related to the policy, but it still remains red: the fact is that the impact assessment was not good enough.

My noble friend Lady Neville-Rolfe raised a very good point about what flexible working is. We agree that flexibility is to be encouraged, but I noticed that the noble Lord has now relied twice on the eight types of flexible working identified by ACAS. I suspect that that is not widely understood in the public domain. The proposed impact assessment would go a long way to make it much clearer what people could and should be asking for, what employers should be thinking about, the likely economic impacts and the more societal impacts from the right to request flexible working.

This would help the noble Baroness, Lady Bousted, as well, because people would have a much broader understanding of what it means in teaching. Obviously, 100% of teachers cannot work from home—that goes without saying—so what does this actually mean in practice? I do not think that anybody has much clarity about that, including, by the sounds of it, employees and many teachers themselves.

I am chairing a commission that will be very clear about what it means and how it can be employed in schools. I hope that will enlighten lots of people.

I look forward to being enlightened.

The noble Lord, Lord Fox, again made some very good points about the need to describe the job; I accept that that was an imperfect way of tabling that amendment. However, I leap into the defence of my noble friend Lord Murray of Blidworth from his attacks by the Fox. As I heard it, my noble friend was not saying that employment tribunals are no good; he was saying that there is a backlog, that they are probably underresourced and underfunded and that, because of their structural nature, they do not necessarily resolve things. An increasing reliance on them to resolve things will not necessarily have the desired effect. That is an incredibly important point that we should return to in the discussion that the Minister offered the Committee because, as I said in my last summary, we are placing an increasing reliance on employment tribunals to resolve an awful lot of the unanswered questions that are being discussed as a result of the Bill. For things not to be resolved even after they have got to an employment tribunal, after a long delay, seems a little short-sighted.

For now, as I say, I am somewhat reassured on Amendment 65, and I am grateful to the Minister for his answers. We should return to the idea of Amendment 67 and a much broader impact assessment, but for now I am content to withdraw Amendment 65.

Amendment 65 withdrawn.

Amendments 65A and 66 not moved.

Clause 9 agreed.

Amendment 67 not moved.

Clause 10: Statutory sick pay in Great Britain: removal of waiting period