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

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 request to change an employee's existing employment terms and conditions (T&Cs) relating to hours, times, and place of work.

In this four-part blog series, I will seek 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.

In PART I, I set out the new legal framework applicable to FW rights, and summarily identified a range of issues, problems, and pitfalls that may potentially arise in practice. In PART II, I set out guidance for employers (crypto and FinTech firms) regarding FW rights. In PART III, I will set out guidance for employees of crypto and FinTech firms. The legal frameworks referred to in PART III 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).

THE RIGHT TO REQUEST FW
Every person that works in a crypto and FinTech firm that is classified as both an ‘employee’ and a ‘qualifying employee’ has the legal right to request FW from their employer (see: PART II for classifications). This means that the employee has the legal right to apply to the firm for a variation of employment T&Cs relating to:

1. the hours required to be worked;
2. the times required to be worked; and
3. the place where work is to be carried out (place of business, home) (ERA 1996, ss. 80F(1)(a)(i)-(iii)).

For example, if an employee wishes to change:

1. hours to ‘compressed hours’ (e.g., 40 hours per week compressed into 4 days instead of 5 days); or
2. times to ‘staggered hours’ (e.g., 8am-4pm, 10am-6pm); or
3. place to ‘hybrid working’, ‘remote working’, or ‘working from home’ (WFH).

An employee has a right to make up to two FW requests during any 12-month period (ERA 1996, s. 80F(4)(a)). Each FW request is required to contain certain details. These will be listed individually with the relevant legal source provided in brackets (for ease of reference). The FW request must:

1. be made in writing (FWR 2014, reg. 4(a));
2. state that it is an application under section 80F ERA 1996 to exercise the statutory right to request contact variation (ERA 1996, s. 80F(2)(a));
3. state whether the employee has previously made a FW application to the firm and, if so, when this was made (FWR 2014, reg. 4(b));
4. specify the change applied for and the date on which it is proposed that the change should become effective (ERA 1996, s. 80F(2)(b)); and
5. be dated (FWR 2014, reg. 4(c)).

If a crypto or FinTech firm has created a FW request form, then the employee should use the standard form provided, if not, there is a standard template form (docx; odt; pdf) that can be used that has been provided by the government (Department for Business and Trade, 2014). Once the firm receives the FW request, it then has 2 months (beginning on the date the FW request was made (Application Date)) in which to evaluate the request and make a final decision (decision period) (ERA 1996, s. 80G(1B)(a)). A FW request will remain live until:

1. the firm makes a final decision on the FW request;
2. the FW request is withdrawn;
3. an outcome is mutually agreed between the firm and the employee; or
4. the statutory 2-month decision period ends (FW Code, para. [7]).

Employees should note that a decision period longer than 2 months can be mutually agreed between the firm and the employee (ERA 1996, s. 80G(1B)(b)). For example, the firm may inform the employee that because of administrative burdens, it may require 3 months to process the FW request. However, employees would be advised to carefully consider whether to agree to such a request. This is because employees cannot make a second FW request if the first FW request is still ‘proceeding’ (ERA 1996, s. 80F(4)(b)). Proceeding means that:

1. a live FW request has not yet been concluded (ERA 1996, ss. 80F(4A)(a)(i)-(ii)); or
2. an appeal against a decision to refuse a FW request has been initiated, but not yet concluded (ERA 1996, ss. 80F(4A)(b)(i)-(ii)); or
3. the decision period for a FW request or FW request appeal has been extended (with retrospective effect) but not yet concluded (ERA 1996, ss. 80F(4A)(c)(i)-(ii)).

This means that FW requests will continue to be live during any appeal or decision period extension (FW Code, para. [7]). So, if an employee agrees to a 3-month decision period, the FW request is subsequently refused, and the employee then appeals the FW request decision, the employee will have to wait until the appeal is concluded before making any second FW request. This could potentially take anywhere between 4-6 months overall, which might prove to be problematic for employees that need to change their working arrangements quickly (e.g., because they have changed the location where they live).

CONSIDERING FW REQUESTS AND FW REQUEST CONSULTATION MEETINGS
A crypto or FinTech firm that receives a FW request from an employee is required to:

1. deal with it in a reasonable manner (ERA 1996, s. 80G(1)(a));
2. notify the employee of its decision within the decision period (ERA 1996, s. 80G(1)(aa)); and
3. not refuse the FW request unless the employee has been consulted about the FW request (ERA 1996, s. 80G(1)(aza)).

Employees are advised that although a consultation meeting (CM) to discuss the FW request (FWCM) is not a legal requirement, it nevertheless constitutes good practice (GP) recommended by Acas (FW Code, para. [12]). Procedural considerations for FWCMs recommended by Acas were set out in PART II (they are not repeated here). Acas notes that when considering a FW request, employers should (i.e., represents GP) carefully assess the effect of the requested change for both the firm and the employee (e.g., assess potential benefits or other impacts of accepting or rejecting it) (FW Code, para. [8]).

FW Grounds
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 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)).

FWCMs: ADVICE FOR EMPLOYEES
When preparing to attend a scheduled FWCM, there are seven key pieces of advice that I have provided for employees relating to: 

1. prior research;
2. substance;
3. discrimination;
4. structure;
5. accompaniment;
6. trial period; and
7. alternative solutions.

Prior Research
Before attending a scheduled FWCM, employees should aim to carry out research to find out about other FW arrangements already in place in the firm, and any previous FW requests and how they were decided (including talking with FW request applicants). They should review the firm's existing FW policies, procedures, and rules (PPRs) to familiarise themselves with how FW is approached within the firm. They could also arrange informal conversations with managers to identify any existing concerns, opinions, or reservations they might have regarding FW arrangements. The overall aim is for the employee to get as detailed as possible an understanding of how the firm views FW, and its approach to FW requests.    

Substance
This is a crucial point which many employees may inadvertently get wrong. When making a FW request, employees may naturally be inclined to focus on, and explain at length, how FW will benefit the employee. However, the FW Grounds have nothing whatsoever to do with employee benefits. Therefore, when refusing a FW request, a firm is legally only required to consider the stated FW Grounds. In order to achieve a better probability of success, employees should instead seek to strategically view the FW request from the firm’s perspective. If this is a negotiation, the employee should ask themselves how do I address and remove the other party's objections or concerns.

Therefore, employees should aim to primarily address the FW Grounds in greater depth, as opposed to fixating solely on employee benefits. For example, to identify and quantify potential additional costs, and to see how the burden of such costs might be eased. Or to identify any potential detrimental impact on quality or performance, and to explain how such impact could be mitigated. Or to identify beforehand whether existing staff might be open to re-organised work schedules. By focusing on addressing the FW Grounds, employees can seek to refute potential FW objections in advance.

Discrimination
With regards to the handling of FW requests (and any information the employee discloses), firms must not (i.e,. constitutes LR) unlawfully discriminate against an employee in relation to any ‘protected characteristics’ under the EA 2010 (i.e., age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, sexual orientation) (FW Code, para. [10]). This is an important consideration for employees to keep in mind. For example, in Mrs A Thompson v Scancrown Ltd T/a Manors (ET/2205199/2019), an Employment Tribunal (ET) ruled that refusal of an employee’s FW request to modify working hours to accommodate childcare responsibilities amounted to indirect sex discrimination. Mrs Thompson had only asked her employer to finish at 5pm instead of 6pm (so she could pick up her child from nursery in time), but her employer had refused. 

Structure
Employees should aim to find out in advance the duration of the FWCM (e.g., 30, 45, 60, 90 minutes), and to create a mutually agreed meeting structure. This will allow employees to plan out discussions in advance, and to estimate how long they will have to discuss the points that they wish to raise. It should also help the firm and the employee to identify the key issues to be discussed during the FWCM, and to assess whether the allotted duration will be adequate. A mutually agreed meeting structure demonstrates reasonableness. If the firm completely ditches the meeting structure in the FWCM, this evidences a deviation from the reasonableness requirement.

Accompaniment
Although there is no statutory right to be accompanied to FWCMs, Acas recommends as GP allowing employees to be accompanied to FWCMs (FW Code, Foreword; para. [31]). Employees are advised to request to be accompanied (e.g., by a fellow worker or trade union representative) (FW Code, paras. [31]-[32]). This is beneficial for the employee, as the companion may be able to assist the employee in the FWCM (e.g., by taking contemporaneous notes), as well as providing insights and an opinion on how the meeting went (employees may be nervous, or may be focused solely on their own delivery).

Trial Period
Acas notes that “It may be helpful to discuss whether a trial period may be appropriate to assess the feasibility of an arrangement” (FW Code, para. [17]). In fact, I would go one step further and suggest to employees that this might be the preferred route for the employer. A final (and formal) decision on a FW request is binding on the firm and is binary in nature – it necessitates a ‘Yes/No’ response based on a distinct lack of actionable intelligence.

A trial period, however, provides the firm and the employee with a way to assess the actual viability of the FW arrangement prior to any final decision being made. It would allow both sides to identify what works and what does not work, and to make any changes to the FW arrangement that may be required. A trial period approach is more likely to facilitate a ‘win/win’ outcome.

Alternative Solutions
Acas states that if the original FW request cannot be accepted in full, then the parties should (i.e., represents GP) discuss if it may be possible to secure some of the benefits contained within the original FW request (FW Code, para. [17]). For instance, by modifying the original FW request, or agreeing on any alternative FW options (FW Code, para. [17]). Employees would be advised to identify and assess in advance of the FWCM whether they would be willing to accept any alternative solutions. This approach would then prepare the employee for such discussions, and it would avoid some form of ad hoc brainstorming session having to take place during the FWCM which would take up time.

APPEALS
Employees do not have a statutory right of appeal regarding a FW request (FW Code, para. [25]). However, Acas states that allowing an employee to appeal constitutes GP (FW Code, para. [25]). Therefore, employees have two main options to appeal a FW request that has been rejected:

1. follow the firm’s internal procedures for appealing; and/or
2. complain to an ET.

Firm’s Internal Appeal Procedures
The firm’s decision to reject the FW request should explain how an employee can appeal and the timeframe for submitting any appeal (FW Code, para. [25]). Employees should let the firm know in writing the reasons for their appeal (FW Code, para. [26]), for example because:

1. there is new information they wish to be considered by the firm;
2. they believe the firm did not handle the FW request in a reasonable manner;
3. they believe the FW request procedure was not reasonable;
4. there was a failure to apply legal requirements under the ERA 1996, EA 2010, or the FWR 2014;
5. there was a failure to apply points in the firm’s FW policy; or
6. there was a failure to apply points set out in the FW Code.

Complain to an ET
Employees cannot complain (appeal) to an ET simply because the firm refused the FW request. The employee must show grounds to make a complaint. Therefore, an employee can present a complaint to an ET if:

1. the firm failed to comply with ANY of the FW request requirements (i.e., reasonable manner, prior consultation, notification, refusal on FW Grounds, decision period);
2. the firm’s decision to reject the FW request was based on incorrect facts;
3. the firm’s notification that the FW request was ‘withdrawn’ was given in circumstances that did not satisfy stated withdrawal requirements; or
4. the firm dismissed the employee, or subjected the employee to detriment (e.g., treated them poorly), because of their FW request (ERA 1996, ss. 80H(1)(a)-(c); FW Code, para. [38]).

Employees are required to complain to the ET within 3 months of the Application Date (ERA 1996, s.  80H(5)(a)). In exceptional cases, the ET may agree to hear a complaint made out of date if the ET is satisfied that it was not reasonably practicable for the complaint to be presented within the requisite 3-month period (ERA 1996, s. 80H(5)(b)). 

SUMMARY
Making FW requests in crypto and FinTech firms may prove to be challenging. This is because most of these are smaller-sized firms, they operate in very different ways and cultures to other types of firms, and they often do not feature extensive human resources (HR) or legal departments. In some firms, such requests may be quickly and easily approved, whilst other firms may exhibit a certain degree of cultural resistance to FW arrangements. It is hoped that this preliminary guide to FW requests for employees of crypto and FinTech firms, can help them to better understand what is to be expected under the new FW request operational framework.  

TO BE CONTINUED.