The nature of work has shifted permanently, with hybrid and remote working now embedded across many industries. The Employment Rights Bill 2024-25 reflects this change by giving employees the legal right to request flexible working from their first day of employment.
Previously, employees were required to complete 26 weeks of continuous service before making a request. From late 2025, that will no longer be the case. This article explains how small and medium-sized enterprises (SMEs) should prepare, what steps they need to take, and how to balance flexibility with business needs.
What’s Changing Under the New Law?
- Day-one flexible working right: Every employee will be entitled to request flexible working on day one of starting their role.
- Employers must provide a written decision and either accept the request or refuse it for genuine business reasons.
- The government intends to reduce bureaucracy by simplifying how these requests are managed.
What Qualifies as a “Business Reason” to Refuse Flexible Working?
The Employment Rights Bill states employers can only refuse requests based on specific, valid reasons, such as:
- A negative impact on customer service.
- Insufficient work during the requested hours.
- Cost implications that the business cannot reasonably bear.
- Concerns over performance or quality of output.
SMEs must document any refusal carefully and be prepared to explain how the reason relates to legitimate operational needs.
Why This Matters for SMEs
Flexible working can deliver benefits such as improved engagement, better retention, and greater productivity. However, SMEs often face additional challenges compared to larger companies, such as:
- Smaller teams, making it harder to redistribute work.
- Customer-facing roles where presence on-site is essential.
- Less budget for remote working infrastructure.
Despite these challenges, SMEs will still be expected to follow the law and manage requests fairly.
The Risks of Getting It Wrong
- Tribunal claims: Refusing requests without a valid business reason could expose SMEs to discrimination claims, especially if the employee has protected characteristics (e.g., working parents, carers, disabled workers).
- Employee disengagement: Mishandling requests can lead to demotivated staff and higher turnover.
- Reputational damage: Poor handling of flexible working requests could negatively impact employer branding and make recruitment harder.
How Should SMEs Prepare?
1. Review and Update Your Flexible Working Policy
Your current policy may still refer to the 26-week qualifying period. Update it to:
- Reflect the new day-one right to request.
- Set clear expectations about how requests will be processed.
- Outline valid business reasons for refusal, in line with ACAS and statutory guidelines.
2. Create a Fair and Transparent Process
- Ensure employees know how to submit requests and what information to provide (e.g., requested pattern, how the change could work operationally).
- Define how managers will assess requests and consult with employees.
- Implement a formal timeline (currently, responses must be given within 2 months).
3. Train Your Line Managers
Managers should be trained to:
- Evaluate requests objectively and without bias.
- Balance business needs with employee rights.
- Manage competing requests fairly across teams.
- Understand when legal advice may be necessary (e.g., where discrimination concerns arise).
4. Assess Operational Impacts
- Consider roles that could realistically support hybrid, remote, or flexible hours.
- Explore rotational models, such as alternating in-office and home working days.
- Review IT systems (e.g., secure VPNs, collaboration tools like Microsoft Teams or Slack) to support hybrid teams.
How Flexible Working Can Benefit SMEs
Handled well, flexible working can be an asset for SMEs. Benefits include:
- Improved employee retention – especially among parents and carers.
- Attracting new talent – candidates increasingly seek flexible roles.
- Reduced absenteeism – flexible working can improve wellbeing and reduce sickness absence.
A Word on Hybrid and Remote Work
The Bill doesn’t mandate that all requests must be granted—but it will push businesses to explore creative solutions.
- Can certain tasks be completed remotely while others remain on-site?
- Can hours be shifted (e.g., 8am–4pm vs. 9am–5pm) to suit both employees and customers?
Common Flexible Working Models SMEs Can Explore
- Hybrid working: Split between home and office.
- Remote working: Fully home-based, depending on role.
- Flexitime: Employees can adjust start and finish times within set parameters.
- Compressed hours: Full-time hours worked over fewer days.
- Annualised hours: Total hours spread unevenly across the year.
Conclusion
The Employment Rights Bill 2024-25 marks a shift towards more adaptable workforces and modern workplace practices. SMEs that prepare now—by updating policies, training managers, and streamlining processes—can minimise risk and build a more engaged and productive team.
📥 Want a step-by-step checklist to stay compliant and prepared? Download here:
👉 Employment Rights Bill Checklist
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