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Comments from The Association of Chartered Certified Accountants
September 2002

The Association of Chartered Certified Accountants (ACCA) is pleased to have this opportunity to comment on the above regulations, issued for comment by the DTI.

In our view, this initiative would have been better pursued via a code of employment practice. At present, those employers who have the resources to offer flexible working arrangements to their staff are increasingly willing to explore mutually convenient arrangements. But this is not possible for very many businesses, especially small businesses.

Giving all employees a statutory right to apply for flexible working risks giving many of them a false impression of what is possible in their circumstances. This could conceivably be to the detriment of workplace relationships. The new law will also mean that employers will have to devote time and expense to dealing with applications in accordance with legal requirements - this is at a time when employers already have substantial concerns about the level of regulation to which they are subjected by Government. The possibility of appeals being made to employment tribunals, and compensation being awarded, will add to employers' concerns.

Given our reservations, we welcome the intention to adopt a 'light touch' regime for the regulation of this matter and trust that employers can be spared unnecessary pressures and expense.

Specific Questions

Our comments on specific questions posed by the consultation paper are set out below.

Are the criteria defining who may be considered a parent and their relationship with the child appropriate?

We have two points to make regarding the interpretation criteria set out in regulation 2 of the Eligibility regulations.

Firstly, the position of foster parents is different from the position of the other categories of qualifying persons listed. Foster parents are paid for the service that they provide. For this reason, it is arguable as to whether they should be given the same rights as natural parents.

Secondly, we consider that the regulations as drafted place an unfair onus on the employer to accept an employee's claim that he or she is eligible to claim flexible working on the basis that he or she is a 'partner' of the child's natural parent etc. We accept that there should be provision for unmarried couples who have joint responsibility for a child or children. Under the draft definition, however, a person will qualify as a 'partner' if he or she has an 'enduring family relationship' with the parent etc. As the draft regulations stand, we suspect that employers will feel compelled to accept at face value any claim made by an employee that they are part of an 'enduring family relationship'. We consider that this term is unhelpful since it implies a degree of subjective interpretation as to whether or not a relationship is 'enduring' - one person's interpretation of 'enduring' might not be the same as another's. It would be unfair to employers if they were required to make any sort of extensive investigation into the circumstances of a particular relationship, and also unfair if they felt obliged to accept any claim regardless of its merit.

We suggest that If the current definition of 'partner' is to be retained, then there must be a clear responsibility on the part of the employee to satisfy the employer, in his or her application, that he or she meets this particular test. It should at the same time be clear that the employer has the right to disregard the application if he is not satisfied that the applicant is eligible on this ground. The employer should have no obligations in respect of an application which, in his reasonable opinion, is invalid.

There is one further point on eligibility that we would like to make. This concerns the situation where the two parties are no longer living together, whether or not some partial responsibility to look after the child remains. Given that, once variations in working conditions are agreed they are intended to continue, even past the child's sixth birthday, the regulations should make clear what effect a subsequent change in eligibility has for the flexible arrangements agreed upon.

For a valid request to be made under the right should it have to be made on a statutory application form?

Yes. Since the application will have to cover prescribed information, it would be helpful for the applicant and the employer for there to be a pro-forma form for the making of the application. The form should encourage the applicant to provide all information which he or she considers appropriate for the consideration of the application, and should incorporate provision for additional sheets to be attached.

Should the date the application is made be the date on which the employer receives it?

Yes, but as stated above, an application should not be treated as having been received by the employer if the employer is not satisfied that the applicant is eligible to apply for flexible working.

What number of weeks' pay will provide a meaningful level of compensation and act as an incentive to ensure employers consider applications properly?

Primary legislation has already established that compensation is to be linked to the applicant's weekly pay. This is in our view not the best way to determine the right level of compensation, for two reasons.

Firstly, it assumes that the employee can be properly compensated by reference to his weekly pay and that alone. It is probable that the real financial loss that an employee will incur as the result of not being able to secure his wish to work flexibly is that he or she will incur the cost of arranging child-minding. This may turn out to be either more or (where grandparents or other family members are available to look after the children) less than any multiple of the employee's weekly pay. There will also be unquantifiable consequences of a parent of young children not being able to spend time with them.

Secondly, the compensation is to be awarded only where there has been a breach by the employer of procedural requirements in the consideration of the employee's application. It should be borne in mind that, until such time as any requested variation is agreed to, the employee's terms of employment continue as before. Therefore, until such time as the employee achieves a variation of his contract, he does not suffer any actual loss. In this situation, it is not correct to talk in terms of 'compensating' the employee.

Setting compensation by reference to a multiple of weeks' pay will therefore be a somewhat arbitrary process. In the interests of consistency, we suggest that an appropriate approach would be to adopt the basis currently used for the calculation of redundancy payments. This would provide for a maximum of twelve weeks' pay for successful applicants. We consider that a maximum compensation level of £3,000 would be an appropriate incentive for employers to consider applications properly.

Is the approach taken in the regulations appropriate?

Yes, but we suggest that it would be helpful to make clear in the regulations that a 'compromise' plan agreed to at the meeting held under regulation 3 of the Procedural regulations should override the terms of the original proposal.

Should the regulations allow for an employee's companion to be from the outside the company?

Given that the right to apply is concerned with a variation of the employee's own contract of employment with the employer, this is a essentially matter of negotiation between the two parties. The involvement of persons from outside the company would be inappropriate. Also, the involvement of outside persons, in particular external trade union representatives or legal advisers, might be construed as exerting unreasonable and unnecessary pressure on the employer.

The appeal procedure

We believe that the appeal form should be on a pro-forma basis, in the same way as the initial application.

Should variations of time limits be recorded in writing?

Yes.

Are the circumstances in which an employer may consider an application as having been withdrawn described in the draft regulations appropriate?

We consider that any application to withdraw an application should be submitted in writing. Further, failure on the part of the employee to attend the appeal meeting, without prior notice, should be deemed to terminate the process.

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