The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)

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It is a pleasure to serve with you in the Chair, Mr Davies.

I thank the hon. Member for Hampstead and Kilburn for drawing the Committee’s attention to an important point that I was going to address in my main speech, but I am happy to address it now. The good news is that we are in violent agreement about the day one right. As she will know, last year the Government consulted on a range of measures to support the uptake of flexible working arrangements, including whether to remove the existing 26-week qualifying period and make the right to request flexible working a day one right. We published that consultation on Monday. The response explains that the Government will give the right to request flexible working to all employees from the first day of employment. Indeed, we made that commitment in our 2019 manifesto, so we agree that it is the right thing to do.

The hon. Member for Hampstead and Kilburn raised a number of points that I will cover in my main speech, but I am happy to address them now. On timescales, the legislation should pass through both Houses during the course of next year, taking effect in 2024 in order to give businesses time to adapt. On the number of requests granted, according to our research 83% of requests are granted and fewer than one in 10 are refused—that is the information we have.

The hon. Lady asked about adverts. Employers may well use adverts to promote a position that is flexible, and we would encourage them to do that. We see this legislation as key to getting people back into work, particularly those who have left their workplace and are considering returning. To us, that should be an option for the particular employer. Certainly, it is our intention that the right to request flexible working should become well known and therefore become a discussion point between employers and employees for any role, not just for jobs that may be advertised as flexible.

Kevin Hollinrake

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The source was the post-implementation review of the 2014 right to request flexible working regulations, which was published in September 2021 and found that, in most workplaces, 83% of the time, where a request has been made, a request was granted.

Kevin Hollinrake

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No, the review was of the 2014 regulations, but it was published in September last year, so the actual consultation was much more recent than that.

Kevin Hollinrake

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I entirely agree. Whether they are related to a disability, childcare responsibilities or semi-retirement, such provisions mean that we can bring talented people back into the workplace, which is good for the talented people and for the workplace. I therefore entirely agree with the hon. Lady’s point.

To address the point that the hon. Member for Hampstead and Kilburn raised about whether an employee or potential employee can challenge the employer, it is about a dialogue. That is the key to this, and, as part of the legislation, there will be a dialogue between employer and employee around flexible working, so a discussion can happen at that point. The employer would have to set out a reason for refusal—there are eight reasons, such as customer service or productivity—so, at that point, there is not an appeal process. It is important to have a balance between the rights of employers and of employees, and I think that this strikes the right balance.

Kevin Hollinrake

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The hon. Lady raises an important point. Of course, as she will be aware, we engage heavily with ACAS on such provisions, and it does some excellent work in providing guidance for employers. This measure will be no different, in terms of advice that might be available to employers and employees.

We consider the measure to be a key part of the policy package, bringing an estimated 2.2 million additional people into the scope of the legislation and encouraging early conversations about flexibility. The Government will introduce the day one entitlement through secondary legislation, alongside the measures included in this Bill, so we do not believe there is any need to amend the Bill to achieve that change.

The Government already have the power to make flexible working a day one right via secondary legislation and intend to lay the statutory instrument to remove the 26-week qualifying period when parliamentary time allows, so that it takes effect at the same time as the measures in this Bill. On that basis, I would invite the hon. Member to withdraw her amendment.

Kevin Hollinrake

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I thank the hon. Member for Bolton South East for bringing this Bill before the House. I twice had the honour of bringing forward legislation through a private Member’s Bill in my many years as a Back Bencher. We are all in this place to try to make a difference. Sometimes we differ on how we should do that, but bringing forward legislation is a great honour. I pay tribute to the work of the hon. Member for Bolton South East—not just her work on this Bill, but her campaigning prior to it, which we heard about very clearly in earlier contributions.

I also pay tribute to the Committee members here today and to my predecessors, not least the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Sutton and Cheam (Paul Scully), who did much work on this issue prior to my taking over the role, and my hon. Friend the Member for Watford, who did such great work on it. I echo the comments made about the Comptroller of His Majesty’s Household, my hon. Friend the Member for Castle Point, who does such great work in the private Member’s Bill space and has done for many years.

The key thing about this Bill is that it has great benefits not just for businesses but for workers and not just for workers but for businesses—it is a win-win situation for all. I know that some will have concerns about it; certainly I have had feedback already from some businesses that are concerned, but I think that when they look at the detail, they will be reassured. The No. 1 thing that the Bill will do is make a more constructive workplace and, crucially, bring more people back into the workplace. That is good for everybody. We all know that businesses are suffering a shortage of workers.

On Second Reading, we heard from hon. Members from both sides of the House about their personal interest in flexible working; some of them are serving on this Committee. During that debate, I was struck by the breadth of issues that flexible working can help to address. Contributions were made on issues ranging from increasing economic opportunities for people living in rural communities, to supporting those with fluctuating illnesses such as ME, and enabling businesses to continue operating during disruptive events—not least global pandemics.

When flexible working arrangements are agreed between employees and employers, the benefits are not simply accrued by the employee; they often extend far beyond that. For the business, it could be a chance to retain the skills and expertise of an experienced worker or to encourage one to come back to work, or lead to a more diverse senior leadership team. In other circumstances, there could be wider, societal benefits, such as for the elderly relative able to spend more time with a family member during their non-working hours.

As you know, Mr Davies, before I entered Parliament, I ran my own business. I know at first hand the importance of looking after a team. With a good discussion and a bit of flexibility, working patterns can be adapted to get the most out of the employment relationship. At the same time, I recognise that there will be times when a requested pattern is unworkable. That is why, rather than prescribing or guaranteeing certain ways of working, the legislation needs to leave space for employees and employers to work out the right arrangements for their particular circumstances. Only in this way will we realise the potential productivity gains. I was struck by the comments from the hon. Member for York Central, who talked about the productivity improvements that can come from such ways of working. They can be realised through a more engaged and flexible workforce. I am pleased to reiterate today that the Government fully support this Bill.

I know that the Bill’s progress will be particularly welcomed by the Minister of State at the Department of Health and Social Care, my hon. Friend the Member for Faversham and Mid Kent (Helen Whately), who has long campaigned for better access to flexible working. We came into Parliament at the same time, in 2015, and she was campaigning on this in my early days as an MP, many years ago. Although she is not on today’s Committee, I want to take this opportunity—I notified her that I was going to do so—to recognise her efforts in driving forward the flexible working agenda.

I am pleased to confirm that earlier this week, the Government published their response to the consultation on measures to encourage flexible working. The consultation considered several changes to the current legislative framework, and I am pleased to see those updates brought forward by this Bill. In response, as I said earlier, we have committed to introducing secondary legislation to make the right to request flexible working a day one right, thereby giving all employees this right from the first day of employment.

It has been great to see a positive reaction to the response from the business community this week. The British Chambers of Commerce commented:

“Having free and open discussions from the outset will help ensure workplace arrangements are the best they can be for everyone.”

The BCC was a member of the flexible working taskforce, which included the Federation of Small Businesses, employer groups and ACAS. ACAS does such great work, and I have met with it twice already, including with the ACAS council, and discussed these matters. The Chartered Institute of Personnel and Development added that the measures will

“enable organisations to attract and retain a more diverse workforce and help boost their productivity and agility.”

Copies of the full consultation response have been placed in the Libraries of the House.

The measures in this Bill adjust the existing right to request flexible working. This is already very good enabling legislation, but these are important changes that will facilitate better access to all forms of flexible working, whether that relates to when, where or how people work. The changes will particularly support those who need to balance their work and personal lives and may find it harder to participate in the labour market, from older workers to new parents and those with disabilities—the hon. Members for York Central and for East Kilbride, Strathaven and Lesmahagow raised that issue—or long-term health conditions. This Bill will be an important step in supporting them to remain and progress in work.

When more flexible working arrangements are agreed as a result of this Bill, employers will also benefit from a more committed workforce, higher levels of employee retention and lower recruitment and training costs. We know that as a result of this legislation, more people will return to work. According to our research, the No. 1 thing on the wish list of those who have left the labour market and are considering returning is flexible working. It was very interesting to hear from the shadow Minister about her own childcare responsibilities, and I am sure that all parents on the Committee will recognise instances such as those she described. More broadly, by making work accessible to a wider pool of talent, the measures will help to create a more diverse working environment and workforce, which studies have shown leads to improved financial returns.

As the hon. Member for Bolton South East has set out, the two clauses of this Bill are relatively straightforward. They make changes to the provisions in sections 80F and 80G of the Employment Rights Act 1996 to encourage a better dialogue between employers and employees about the benefits of flexible working, increase the possible frequency of requests, speed up the administrative processing of requests and promote equal access to flexible working arrangements. These changes are timely and important to help both individuals and businesses secure the benefits of flexible working, and they represent a sensible, proportionate update to the right to request flexible working, a framework that enables a discussion from both sides.

I was struck by some of the shadow Minister’s points. She talked about the invisible restrictions holding people back; that is key to this legislation, because only dialogue can expose those restrictions. She asked whether we can make the process quicker—let’s see. It is important to give businesses a little time, because it will cost them. It will not be a great deal of money—we reckon less than £2 million a year—but there is an administrative cost. The timeline is that the legislation will complete its passage through both Houses in 2023 and then take effect in 2024.

As for adverts, again we would rather not be prescriptive. We see this change as something employers can use to make a job sound more attractive, so we would prefer to leave it to employers to decide how to do that.

I turn to wider legislation. The shadow Minister mentioned the employment Bill, but we are bringing forward several pieces of legislation, of which this is only one. Things such as neonatal care leave, carer’s leave and more protections for workers during pregnancy or returning to work have all come through private Members’ Bills. Indeed, we are taking forward some legislation that my hon. Friend the Member for Watford first proposed to ensure that people, principally those who work in the hospitality sector, keep all the tips that they earn, which is absolutely right.

In conclusion, supporting this Bill is in line with the Government’s ongoing commitment to build a strong, flexible labour market that supports participation and economic growth. I thank all those on the Committee today and those who spoke on Second Reading for supporting the Bill’s progress so far. I look forward to continuing to work closely with the shadow Minister to support the Bill’s passage, and I extend particular thanks to you, Mr Davies, for your excellent chairing of today’s sitting.

The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)

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I thank the shadow Minister for her very positive comments at the end of her remarks. I shall pick up one or two of the other points, if I can, as I go through my remarks.

First, let me thank the hon. Member for Bolton South East (Yasmin Qureshi) for all her hard work and engagement in bringing forward this important legislation at this time. It has been a pleasure to work with her. It is always a pleasure and an honour to introduce a private Member’s Bill. I have had that opportunity twice—both were successful—in my career as a Back Bencher. I know that she will feel a great deal of pride at today’s events.

The Government have been very pleased to support the Employment Relations (Flexible Working) Bill through its various stages, and, of course, that will continue today. It has been heartening to observe the support for the Bill across the House, and I was pleased to hear that reflected in this debate.

The ability to vary the time, hours and place of work is an important element of the flexible labour market in Great Britain. Having access to flexible working arrangements enables employees to participate in the labour market in a way that suits their circumstances. Indeed, it brings people back into the workplace. Let me illustrate that point. There are more than 8 million people working part-time in the UK. For many of those people, such flexibility is a need rather than a choice.

The shadow Minister raised the fact that we want to attract more women back into the workplace, and I absolutely support that aim. I reiterate that this is one of six private Members’ Bills that the Government are supporting and those include some very important other measures, such as carer’s leave, neonatal leave, and pregnancy and return to work protections, to make sure that women feel more comfortable and protected in the workplace.

Crucially, for businesses, this Bill supports a diverse range of work arrangements, which can be key in retaining people and keeping them productive. We know that one key challenge for business is finding and retaining the right people. Crucially, the Bill provides a right to request, not a right to insist. I, too, was a little confused about Labour’s position, because the Bill provides a right to request, which is a right to be granted flexible working subject to reasonable measures; there are eight grounds on which a request could be refused. Crucially—I was pleased that my Conservative colleagues were keen to point this out—this is not a right to impose flexible working on businesses, as that would be the wrong thing to do. We know that there are many burdens on businesses at the moment, not least some of the challenges associated with the cost of living, and adding further burdens would be a mistake if they would be an imposition.

The post-implementation review of the Flexible Working Regulations 2014 found that employers have seen improvements in staff motivation and employee relations because of flexible working. That point was made clearly by the hon. Member for Bolton South East. Reduced absenteeism and lower staff turnover was also found. Research indicates that flexible working can unlock opportunities for growth and, indeed, access to the station platform, as was pointed out by my hon. Friend the Member for Buckingham (Greg Smith). It suggests that in the absence of suitable working hours or locations, groups of people are not employed, have retired early or are working below their potential. Some 500,000 people of working age have left the workplace since the start of the pandemic and it is crucial that we bring them back into the workplace, as was mentioned by the hon. Member for Bolton South East and by my hon. Friend the Member for Orpington (Gareth Bacon). He rightly pointed out that the costs and burdens of these measures are relatively limited, at about £2 million. It is always right to look at the cost to business of these kinds of measures.

These measures are supported by a recent Office for National Statistics study, which showed flexible working hours to be the most important factor in determining whether older workers who have left the workplace since the start of the pandemic will return to the labour market. Again, that point was made succinctly by my hon. Friends the Members for Aylesbury (Rob Butler) and for Newcastle-under-Lyme (Aaron Bell), who talked about a lady of 82 returning to the workplace, which was very impressive. Sadly, my mum passed away when she was 84, but she was proud to work every single day until then. He also talked about the stores of wisdom of people who have left the workplace but whom we are trying to attract back into it, and I could not agree more with that position.

From running my own business, I know that accommodating a particular working pattern can often be the difference between losing and retaining a valued member of staff. The right to request flexible working is very good enabling legislation. It acknowledges that there is no one-size-fits-all approach to working arrangements, as was pointed out by my hon. Friend the Member for Stoke-on-Trent Central (Jo Gideon). It is designed to help employees and employers find arrangements that work for both sides, and it is functioning well. The post-implementation review of the legislation found that in 83% of workplaces where a request is made the request is granted, with only 9% of workplaces reporting turning down such a request. That is why our 2019 manifesto committed to consult on ways to improve access to flexible working. That consultation was primarily focused on adjustments to the right to request flexible working. We published our response to that consultation at the end of last year and I am pleased that the measures in this Bill reflect what we set out in our response; most importantly, this becomes a day one right. I wish to pick up on the comments made by my hon. Friend the Member for Watford (Dean Russell), who did such fine work in Committee and as my predecessor in this role. That day one right did not come as a result of the amendment, which was withdrawn in Committee; we made the commitment, in consultation, that that was our intention and it was what we confirmed later that week.

These important changes will facilitate better access to all forms of flexible working, whether it relates to when, where or how people work. My hon. Friend the Member for Buckingham and the shadow Minister both mentioned the importance of childcare to getting people back to work. One note of caution, of course, is that childcare is very expensive for the taxpayer, around £3.5 billion a year. We would all like to expand childcare provision, but all hon. Members, certainly on my side of the political divide, are keen to ensure that taxpayers’ money is spent wisely.

Kevin Hollinrake

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My hon. Friend makes a very good point, and I agree entirely. As an employer, we were very keen to get people back to the workplace who had gone off on maternity leave, and we would be as flexible as possible in facilitating that. I think all good employers do, as indicated by the fact that 83% of employers agree to requests for flexible working.

The consultation requirements will mean that employers and employees are encouraged to have a broad conversation about what flexible working arrangements may be workable. This will avoid the scenario in which an employer rejects a specific request out of hand, as my hon. Friend the Member for Watford explained very well.

My hon. Friend the Member for Bury North (James Daly) asked what “consultation” means, which is a good question. ACAS will update its code of practice to make sure that employers are clear on the requirements. The current code of practice requires only a discussion, which could be over the telephone or face to face, and the update will explain what it means in practice.

Allowing employees to make two statutory requests in 12 months will mean that legislation is better able to respond to changing needs and requirements; reducing the timeframe within which employers must respond to requests will speed up the whole process; and removing the requirement for an employee to set out the impact of their requested change will level the playing field and remove red tape from the process.

I thank my predecessors, my hon. Friends the Members for Watford, for Loughborough (Jane Hunt) and for Sutton and Cheam (Paul Scully). I also thank the civil servants in my private office who do such a fine job and who have done so much legislation in recent weeks and months with such great care and expertise: Matthew Wootton, Tony Mulcahy, Roxana Bakharia, Jayne McCann, Ana Pollard, Bryan Halka, Dan Spillman and Cora Sweet.

Supporting this Bill is in line with the Government’s ongoing commitment to building a strong and flexible labour market that supports participation and economic growth. Our 2019 Conservative manifesto committed to encouraging flexible working, and this Bill is a positive development for individuals and businesses alike. I wholly support the passage of this Bill as it moves to the other place, and I commend it to the House.