Employment Relations (Flexible Working) Bill

Baroness Bottomley of Nettlestone Excerpts

2nd reading
Friday 19th May 2023 Lords Chamber

[Baroness Bottomley of Nettlestone (Con)]

My Lords, I add my congratulations to the noble Baroness and the Bolton mafia. I studied carefully the contribution of the MP for Bolton South East and I commend her work. It is also a delight to hear the warm words of praise for the Minister, Kevin Hollinrake, and the officials. Too often, the public have the perception that politicians are locked in party-political tribes, arguing fiercely and rather negatively, alienated from Ministers and civil servants. This is a splendid case study of collaborative, constructive work. I am delighted to support it and very much congratulate all those involved.

The Bill comes at a timely moment. We have a real productivity paradox and dilemma in this country: we have to increase growth and we have to promote economic activity, but something like 500,000 people of working age have left the workplace since the start of the pandemic. It is essential that we understand why this is and find a way to bring back as many as possible. We need a flourishing, vibrant workforce. The pandemic had the most cataclysmic effect on working practices and people’s attitudes to work, in a way that none of us could have foreseen. Who would have thought that whole industries could work from home—banks, building societies and so on? The technology was there, but this gave a kick-start to people adopting it. We are left with a situation where maybe some people do not really want to return to the workplace, and this in itself is a quandary.

We know that many long-term health problems are around mental health. I cannot help but think that this may be associated with people working in isolated environments and not coming to the workplace for the companionship, the challenge and the debate, and for the fun and meaning that work provides for so many people. Having flexible working is surely a way forward, and we, government and enlightened employers should should welcome this. The best and most committed talent across industry, commerce and the public sector is needed.

Interestingly, when Stanford University did some research the other day, Nick Bloom, an economist, showed that hybrid models had no effect on productivity but boosted morale and retention. Increasing motivation is part of retention, and that can result in savings in recruitment costs, as was asserted by the impact assessment. That reminds me that I should declare my interest of 23 years in senior level executive search across all sectors of the economy. I have also sat on various boards.

Flexibility enhances employee engagement and well-being. As I have said, today’s employees have different expectations. The idea that you would go to the office and sit there from eight in the morning till six in the evening is not something that many young people tolerate with great comfort these days. People look for purpose in work, they want a work-life balance and the ability to support family flexibly, including elderly dependents. I have always said that, if you can provide a flexible package, particularly for a woman when her family is young, she will stay with you in the long term. That has been my experience: provide flexible working and you buy in loyalty. Of course, most of us in this place have very flexible arrangements, as do our offices and staff, so it is difficult to understand that there are still people in working environments that lack any comparable flexibility.

How pleased I am that we are debating this following the Carer’s Leave Bill, which precisely addresses the same issue from a different angle. For many years, I worked with the late Lady Seear, a Liberal Peeress, as her vice-chairman at Carers UK. At that time, people did not know what a carer was—they said, “Do you come from the careers organisation?” People were so unfamiliar with what a carer was. The bravest, boldest and most important step that the late Lady Seear and I ever took was to appoint a bright young woman, whom nobody had ever heard of, to become the chief executive. Of course, this was somebody we now know as our friend the noble Baroness, Lady Pitkeathley, and look what has happened during those years.

Just looking at the boardroom, over the years there have been different views about governance—we must have an audit committee, a remuneration committee and a risk committee. But who would have anticipated that, on a board, there is now a requirement for a non-executive director at board level responsible for employee engagement? It is a board matter. This is a transformation in the way in which the workforce is regarded. I have seen the way in which different people interpret their employee engagement responsibilities, but certainly flexible working must be part and parcel of that.

The Chartered Institute of Personnel and Development, which I congratulate on having produced some extremely helpful briefing, points out that there are still negative attitudes in many workplaces from leaders and line managers towards flexible working. I think that this is reactionary—“It was not like that in our day: we had to work all the hours that God gave and so should people today”. Or they feel uncertain and unclear about how flexible working would work out in practice, which is why this requirement for the employer to consult the employee before rejecting a request for flexible working is so important, because it forces them to say how it would work in practice. But I agree with the noble Baroness that removing the employee’s requirement to have to articulate what the effect on the employer would be is completely right—this is the other way around.

The development of women in the workplace that we have seen has very much been about creating flexible employment. Every mentoring and training session to which I have contributed is about trying to help women to have flexible work packages to help them to progress—and they can move in and out of commitments as the years go by—and so also for others with diverse backgrounds, not only gender but ethnicity and disabilities. I see the noble Lord, Lord Holmes, is going to speak later, and he may have a valuable contribution in that regard.

We must embrace flexible working arrangements to prevent people from abandoning the workforce altogether. Once people have left the workforce, it is all the harder to entice them back. It has been estimated that 87% of people want to work flexibly, but only 11% of jobs are advertised as being flexible. A year ago, the Chartered Institute of Personnel and Development suggested that competition for talent in our country remains fierce. Up to 45% of employers reported having vacancies that are hard to fill. That is certainly borne out by wider commentary and observation, and certainly by my professional activity. If it is hard to fill vacancies, the onus must be on employers to provide as flexible an arrangement as possible and to listen to the expectations of staff, who will otherwise simply walk in the opposite direction.

As the noble Baroness said, there has been substantial progress. Since 2014, all employees have had the right to request flexible working after 26 weeks of service. This Bill, on the experience of earlier legislation, takes those opportunities further forward in allowing employees to request flexible working from day one, with two requests a year, reducing the decision time from three to two months. Reducing uncertainty is enormously important for people trying to organise their work-life balance. As I have said, flexibility can reduce staff turnover, enabling individuals best to cope with long-term health conditions and caring responsibilities. Nine out of 10 employees considered flexible working to be their key motivator—10% more than those who said that financial incentives motivated them most: 10% fewer say that it is financial incentives rather than flexible working. It is essential that employers listen.

As a former Health Secretary, I take a particular interest in health issues. Only yesterday there was a useful Question, which many will have heard, about economic inactivity and health. The Health Foundation has produced a valuable paper in this regard, as has the House of Commons Library. Economic inactivity is extremely serious. As I have said, much of this is to do with mental health; it is also about musculoskeletal conditions. But if flexible working enables people with long-term health conditions, as well as those with caring responsibilities and other requirements, to stay in the workforce, that must be valuable.

Rising economic inactivity occurred in all the G7 nations after lockdown restrictions were introduced, but this has largely been restored in most countries. In the UK, it is an ongoing problem, and that is what we have to address. While long-term sickness accounted for 28% of total inactivity in January this year, it was 23% in 2019. This is a worrying and serious situation, and I believe that the Government are doing all that they can to help people to return to work. Overcoming barriers is crucially important.

Facilitating flexible working has a central part to play. Sickness is not the only reason for people no longer engaging in the workforce; there are many others. Work matters to people; it gives meaning to life, gives enjoyment and creates wealth, while giving self-esteem. But people today have personal and family complications, involving their health and other matters. At the last election, the Conservative Party manifesto made a commitment to encourage flexible working, and I am delighted to see this contribution as committing to that manifesto promise today. I strongly support this Bill.