A Guide to New Flexible Working Rights for Crypto and FinTech Firms: PART IV (RECOMMENDATIONS)

 By Rodrigo Zepeda, CEO, Storm-7 Consulting

INTRODUCTION
The Employment Relations (Flexible Working) Act 2023 (2023 Act) is legislation that sets out new ‘flexible working’ (FW) rights for firm employees. The statutory right to request FW covers any change in an employee's employment terms and conditions (T&Cs) relating to hours, times, and place of work. For instance, a FW request to change to compressed hours, staggered hours, hybrid working, or ‘working from home’ (WFH) arrangements.

In this four-part blog series, I have sought to help guide crypto and financial technology (FinTech) firms and their employees by setting out the new FW legal framework, as well as identifying a range of issues, problems, and pitfalls that may potentially arise in practice. PART I set out the new FW legal framework and summarily identified a range of issues, problems, and pitfalls that may potentially arise in practice.

PART II set out guidance for employers (crypto and FinTech firms) regarding FW rights. PART III set out guidance for employees of crypto and FinTech firms. In PART IV, I will provide a brief evaluation of FW rights and the grounds upon which firms may validly reject FW requests, along with 15 FW recommendations. The legal frameworks referred to in PART IV include:

1. the 2023 Act;
2. the Employment Rights Act 1996 (as amended) (ERA 1996);
3. The Flexible Working Regulations 2014 (S.I. 2014/1398) (FWR 2014);
4. the 'Advisory, Conciliation and Arbitration Service' (Acas) ‘Code of Practice on requests for flexible working' (6 April 2024) (FW Code); and
5. the Equality Act 2010 (EA 2010).

OVERALL EVALUATION OF FW RIGHTS
The new FW provisions seem relatively simple enough in principle. They provide new legal rules to be followed by crypto and FinTech firms to enable employees to make FW requests. However, as we have seen previously (PARTS I, II, III), it is the practical implementation of the new FW provisions that may prove to be challenging. Crypto and FinTech firms may be tempted to gloss over the new FW provisions, or to approach them reactively (not proactively) on an ad hoc basis.

As a result, if crypto and FinTech firms are not careful, the new FW provisions may lead to many new disputes, appeals, and Employment Tribunal (ET) cases regarding FW rights arising. The case of Mrs A Thompson v Scancrown Ltd T/a Manors (ET/2205199/2019) illustrates the point being made. There, the ET held that refusal of a FW request to modify working hours to accommodate childcare responsibilities amounted to indirect sex discrimination.

Mrs Thompson had only requested to change her hours to finish at 5pm instead of 6pm, so she could pick up her child from nursery in time. Her employer flat out refused her FW request and provided five business reasons justifying the refusal. The employer thought it was in the clear. The ET thought otherwise. The ET rejected the reasons put forward by the employer and awarded Mrs Thompson £184,961.32 (the reasons did not withstand scrutiny by the ET).

In the case of Ms L Hedger v British Deaf Association (ET/3318925/2019), the ET upheld a claim for indirect sex discrimination, found the employer to have breached FW procedures, and made an award of £36,730.61. These cases show that crypto and FinTech firms may potentially face serious problems down the line if they fail to adequately anticipate, and sufficiently prepare for, new FW request rights.

Firms may (incorrectly) believe that all they need to do is provide reasons and their refusal of FW requests will always be justified. These ET decisions show that this is not the case. They arguably show that the new FW rights must be applied in a genuine, reasonable, and proportionate manner. Moreover, crypto and FinTech firms should also take into account that FW requests may also involve a range of additional factors that may further complicate the issue. These include:

1. how ETs will approach breaches of stipulated requirements or recommendations under the new FW Code in future cases;
2. inter-related requests to make reasonable adjustments for a disability;
3. issues concerning potential unlawful discrimination (UD) relating to EA 2010 ‘protected characteristics’ (i.e., age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, sexual orientation);
4. the possibility of issues of ‘subconscious bias’ (also referred to as ‘unconscious bias’, ‘hidden bias’, ‘stereotyping’) being raised in mixed FW/UD cases (Mr R Hastings v Kings College Hospital NHS Foundation Trust (ET/2300394/2016); Ms S Warner v Foreign Commonwealth and Development Office (ET/2207245/2020); and
5. firms intentionally/unintentionally subjecting employees to detriment because of a FW request.

All of these types of issues may prove to be particularly challenging for crypto and FinTech firms because:  

1. they are predominantly smaller-sized (i.e., between 1-50 employees);
2. they operate in much more flexible, laid-back, and open environments and tend to operate in different ways to more traditional 9am-5pm corporate firms;
3. they tend to feature a higher proportion of younger employees who often prioritise FW, and hold expectations more akin to a legal right to FW (Global Data, 2024; Feeley, 2023; Abril, 2022; Moore, 2022);
4. they typically operate with much smaller human resources (HR) and legal personnel numbers;
5. they may not be able to invest heavily in a suite of expensive FW and WFH tools to monitor employee performance; and
6. they may find it more difficult to effectively implement FW arrangements with smaller firm personnel numbers.

FW GROUNDS
In practice, crypto or FinTech firms must (i.e., represents a legal requirement (LR)) agree to a FW request unless “there is a genuine business reason not to” (FW Code, para. [9]). This means that crypto or FinTech firms can only refuse FW requests based on one or more business reasons (i.e., FW grounds (FW Grounds)), which are:

1. the burden of additional costs;
2. detrimental effect on ability to meet customer demand;
3. inability to re-organise work among existing staff;
4. inability to recruit additional staff;
5. detrimental impact on quality;
6. detrimental impact on performance;
7. insufficiency of work during the periods the employee proposes to work;
8. planned structural changes; and
9. other grounds stated in regulations made by the Secretary of State (SoS) (ERA 1996, ss.80G(1)(b)(i)-(ix)).

It is possible that a number of firms will simply see this list as a way of justifying a negative perspective or decision on FW that has already been made. For instance, firm managers may hold negative views on the attractiveness or viability of FW, or they may believe that certain employees, or certain groups of employees, cannot really be trusted to implement FW arrangements effectively. Firm managers may then seek to ‘fit’ the FW Grounds to such a pre-made decision, in order to justify refusal of a new FW request (as seems to have occured in the Mrs Thompson case). In the long-term, this approach will likely run into significant problems.

First, the new FW rights apply to all firms, not just crypto and FinTech firms. This means that more and more employees and firms will very quickly become more knowledgeable about FW rights and practices in the workplace (via ET cases, legal cases, news articles, news stories, etc.). As a result, more FW request rejections may end up being appealed by employees as a FW rights culture starts to develop, especially amongst young people.

Second, it only takes one successful ET case to be brought against the firm to force the firm to review existing FW rights approaches, procedures, and standards. As we saw previously, a crypto or FinTech firm could end up paying out anywhere between £36,730.61 and £184,961.32 in ET awards and costs, as well as additional internal remediation costs, simply because it failed to adequately update its existing FW policies, procedures, and rules (PPRs).

Third, if crypto and FinTech firms regularly reject FW requests, it will soon become apparent to employees that the firm does not positively support a FW culture. This may affect the firm’s reputation, but more importantly, it may lead to more employees leaving the firm.

When considering a FW request, firms are required to assess the feasibility of an arrangement. Acas notes that employers should (i.e., represents GP) carefully assess the effect of the requested change for both the firm and the employee (e.g., potential benefits or other impacts of accepting or rejecting it) (FW Code, para. [8]).

With regards to this obligation, firms are much better off analysing and planning for FW in advance. They can use the FW Grounds as a way to strategically analyse the viability of FW within the firm, at a departmental or individual level. For example, are there any departments or positions that are excluded from FW arrangements?

If so, why are they excluded, do the exclusion justifications provided match the FW Grounds, and are they strong enough to justify complete exclusion? What type of employee and/or performance monitoring systems or tools would be needed to effectively implement FW arrangements? Can these be applied at an individual level (e.g., on a cost-effective individual ‘pay-as-you-go’ subscription), or do they require ‘full’ implementation (e.g., expensive implementation fully within firm systems).

Can the entire customer service team (e.g., 8 employees) work remotely? If yes in theory, how much would it cost approximately? If this was implemented, how would it be possible to monitor and analyse whether this new approach would have a detrimental impact on quality or performance? Do the costs differ if only half (i.e,. 4 employees) work remotely? Can this approach be applied to other departments (e.g., coding, compliance, marketing)? If not, why not, and do the reasons provided match the FW Grounds?

By analysing the possibility of implementing FW arrangements within the firm in advance, firms will be able to have a much deeper understanding of what FW arrangements can and cannot be implemented within the firm, and which FW arrangements may be subject to employee limits. At the same time, the FW analysis carried out by the firm is based on the FW Grounds criteria, which means firms can use and apply the FW analysis to any new FW requests made by employees

FW RECOMMENDATIONS
There are 15 FW recommendations that have been developed in PARTS I, II, and III, and which are consolidated here for crypto and FinTech firms. Firms are advised to adopt a proportional approach when assessing the viability of implementing these FW recommendations, which takes into account the firm’s existing resources.

1. Identify all individuals in the firm recognised as both ‘employees’ and ‘qualifying employees’.
2. Identify all people and departments responsible for dealing with FW rights and FW requests.
3. Update existing FW PPRs and FW templates to reflect new FW requirements (including FW request appeal procedures).
4. Put in place procedures or automated mechanisms to ensure that all relevant FW request dates are accurately captured (i.e., Application Date; decision period; notification dates; withdrawals). At a more advanced level, consider developing and implementing an automated system to track FW requests, FW request appeals, dates, decisions, evidence, and notifications.
5. Notify all employees of their statutory FW rights, of FW request procedures, and of FW request appeal procedures. 
6. Train all existing and new employees on the new FW requirements.
7. Create and provide detailed interpretations of key FW concepts and terms (e.g., decision period; employee; proceeding; reasonable manner; qualifying employee; without good reason).
8. Create rules and/or guidelines as to how the FW Grounds will apply, and/or be interpreted.
9. Consider developing and creating a FW handbook that can be given to all employees which comprehensively covers FW rights.
10. Ensure that a consultation meeting (CM) to discuss a FW request (FWCM) is scheduled for the employee, along with a pre-agreed meeting structure.
11. Draft FWCM procedural considerations to be followed (based on Acas recommendations, PART II).
12. Allow employees to be accompanied to FWCMs (whenever it is reasonable to do so).
13. In FWCMs, seek to adopt an open and flexible approach, and be willing to consider different arrangements (e.g., trial period, alternative solutions) whenever it is reasonable to do so.
14. Put in place a FW request appeal procedure that allows an appeal to be dealt with independently and impartially (FW Code, para [28]). The appeal process should be clearly explained to the employee, along with the timeframe for submitting any appeal.
15. Review existing insurance policies (e.g., employers’ liability) to see if they cover compensation or legal costs (if not, consider other options such as employment practices liability insurance, employment tribunal insurance, or legal expenses insurance).

CONCLUSION
A new survey published by Acas in March 2024, found that 7 out of 10 employees (n=70%) and 43% of employers, were not aware of the new changes in the law regarding FW rights (Acas, 2024). This blog series has been written with a view to better educating crypto and FinTech firms and their employees on the new FW rights legal framework, as well as on a range of issues, problems, and pitfalls that may potentially arise in practice with regards to new FW rights. There is no ‘one size fits all’ approach that can be applied to FW within crypto and Fintech firms. That is why firms have been advised to seek to adopt a proactive rather than a reactive approach to implementation of FW rights within the workplace. Such an approach is likely to prove to be more cost-effective in the long term, whilst at the same time supporting a positive FW culture within crypto and FinTech firms.