I beg to move amendment 337, in clause 103, page 110, line 10, at end insert ‘or

(d) that the grounds for the employer’s refusal under 80G(1)(b) was not applicable.’.

The amendment would allow an additional challenge for an employee whose flexible working request is refused by allowing an employment tribunal to consider the business case given by the employer. At present, employees can challenge a flexible working refusal at an employment tribunal only on the grounds that the employer has relied on incorrect facts to explain why the application has been refused, that the employer has failed to follow the correct procedure, including failing to give one of the eight reasons set out in the Employment Rights Act 1996, or that the employer failed to allow the employee to be accompanied at meetings to discuss the request. In practical terms, that means that employment tribunals can consider only the procedural issues of how the request was presented and dealt with, not the business  case behind the refusal. As we have discussed, under the Bill the current procedure will be replaced by a code of practice, so that in future employers will only have to respond to requests in a reasonable manner and within three months.

Employers will still be required to give one of the eight grounds for refusing a request that are set out in the 1996 Act: the burden of additional costs; detrimental effect on ability to meet customer demand; inability to reorganise work among existing staff; inability to recruit additional staff; detrimental impact on quality; detrimental impact on performance; insufficiency of work during the periods the employee proposes to work; and planned structural changes. However, when a flexible working claim is considered at an employment tribunal, the employee cannot challenge whether the business ground given by the employer is reasonable. An employer can assert that one of the reasons set out in section 80G of the 1996 Act applies, but the tribunal is not able to inquire into the business grounds.

When making a statutory request for contract variation, an employee is expected to explain what effect they think the change will have on the employer and how such an effect might be dealt with, yet there is no onus on the employer to demonstrate the business case for refusing a request. We believe that employment tribunals should be able to look into the business case given by employers and make a judgment based on it.

The lack of teeth for employment tribunals leads many employees who want to request flexible working to make dual claims under right-to-request legislation and equality legislation. Women who want to work flexibly may be able to bring a claim of indirect sex discrimination against their employer under the Equality Act 2010. It has been successfully argued that because women tend to have more child care responsibilities than men—something I very much hope will change as a result of the Bill and other measures—insisting that women work longer, inflexible hours may be indirect sex discrimination. Tribunals considering sex discrimination cases are able to look into the business case and award much higher compensation.

Although the current provisions may bring beneficial outcomes to some women, bringing two claims under two separate Acts is complex and confusing for both employers and employees. The amendment would allow employees to bring a claim that the employer’s given reason did not apply in their case. It would strengthen employees’ rights at tribunal and encourage employers to consider carefully the business case before turning down a request. I hope that the Minister gives the amendment her full consideration.

As the hon. Lady says, we are talking about whether the substance of an employer’s decision to refuse a flexible working request can be challenged at an employment tribunal. As she set out, there are eight statutory grounds on which an employer can refuse a flexible working request, and we do not propose to change them. For the benefit of members of the Committee who are not familiar with the grounds, I will set out again what they are: the burden of additional costs; detrimental effect on ability to meet customer demand; inability to reorganise work among existing staff; inability to recruit additional staff; detrimental impact on quality;  detrimental impact on performance; insufficiency of work during the periods the employee proposes to work; and planned structural changes.

The clause proposes that an employee can, if necessary, challenge in an employment tribunal whether an employer has considered their flexible working application in a reasonable manner, but we do not propose that an employee should be able to challenge the substance of an employer’s decision. An employee can, however, challenge the substance of their employer’s decision if the employer has refused a request for a reason other than one of the eight set out in legislation, or if the decision was based on incorrect facts.

The amendment would allow the employment tribunal to consider whether an employer’s refusal of a request for contract variation based on an inability to reorganise the work among existing staff, for example, was reasonable, but it does not seem particularly reasonable to me that an employment tribunal should be able to probe an employer’s decision-making process, arrive at a different conclusion from that reached by the employer and then make an award against the employer on that basis. The tribunal will not be in as good a position as the employer is to judge many of those issues. Employers need to have control over how they run their businesses. An employee’s request to work flexibly, important though that is, should not supersede an employer’s ability to run their business in the way they want. One reason employers as well as employees have given such significant support to the measure is that the previous Government and this one have got the balance right by ensuring that it is fairly light touch and encourages, rather than becomes a burden on, employers and how they have to operate under the right to request.

The hon. Lady also mentioned the potential to bring discrimination claims at the same time. If any employer acts in a discriminatory manner in considering a request, that claim should be brought, because we do not want  any discrimination and the Equality Act should be upheld. I understand that she wants to short-circuit the process so that only one claim is brought, rather than two, but where discrimination has taken place, it is absolutely right to take a claim to an employment tribunal.

I believe that we have the right balance. There is no general right to challenge the substance of an employer’s decision to refuse, but that is different from cases in which the employer has failed to identify a business reason that complies with one of the eight acceptable reasons, or in which they have based their decision on incorrect facts; the employee retains scope to challenge in those circumstances. I simply do not think that a tribunal is better placed than an employer to second-guess some business decisions—for example, about the allocation of work load—and make a judgment based on that consideration. I therefore hope that the hon. Lady will withdraw her amendment.

I agree with the Minister that the right to request should not supersede the ability of an employer to run their business. She and I are probably trying to achieve similar things, albeit in slightly different ways. I am still a little concerned about the complexity of the system and about the support and safeguards available for people in this situation, but I am somewhat reassured by her response. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 103 ordered to stand part of the Bill.

Clause 104 ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Anne Milton.)

Adjourned till Thursday 25 April at half-past Eleven o’clock.