Employment Rights Act 2025

From autumn 2027, the Employment Rights Act 2025 will introduce stronger flexible working rules - but no extra penalties.

Currently, employees can request changes to their working arrangements up to twice a year and employers must deal with such requests in a ‘reasonable manner’. A request can be refused for one or more of eight statutory reasons (e.g. extra costs, detrimental effect on customer demand) following consultation with the employee. See Flexible working: April 2024 changes.

The Employment Rights Act 2025 specifies that flexible working must be afforded to the employee unless:

• the employer considers that the application should be refused on one of the statutory grounds, and
• the employer’s refusal is reasonable

This will be a distinct change: the employer will have to be reasonable in its reliance on the statutory factors whereas currently the employer only has to deal with the request in a reasonable manner and base its refusal on one of the statutory grounds. Where the employee’s request is refused, the employer will have to notify the employee of the ground or grounds for the refusal and explain why it considers that its decision is reasonable. It will not be enough simply to refer to one of the permitted reasons for refusal.

There is no change to the existing penalty for breach which will remain at 8 weeks’ pay, currently capped at £719 per week.

In its response to a consultation on these changes, the government confirms that:

• Employers will be required to hold a meeting before rejecting a request, with a view to reaching an agreement (it cannot simply be a meeting to explain the employer’s decision to refuse). It will not be possible to deal with a request in writing only.
• The meeting will have to consider whether the requested arrangement is feasible, address any challenges where possible and if the original request cannot be accommodated, explore alternatives.
• Employers must give fair and reasonable notice, explain the purpose of the meeting in advance and provide written notification of both the meeting outcome and the final decision.

The government have decided against including a statutory right to appeal a flexible working decision, or a statutory right to be accompanied at the meeting, though it recommends that employers may wish to offer both rights.

Secondary legislation, expected to take effect in autumn 2027, will:

• set out the process for consulting employees about their requests
• bring in the reasonableness test introduced by s. 9 of the Employment Rights Act 2025

The new ‘reasonableness’ test will require employers to accept statutory flexible working requests that are reasonable and feasible. The test will have a different statutory basis from other tests used in employment law.

ACAS has published a draft update to its Code of Practice on requests for flexible working for public consultation (which ends on 17 December 2026). The updated Code is expected to take effect at the same time as the legislative reforms.

The consultation response also confirms that further government guidance will be developed for employers and employees. ACAS will also publish detailed guidance on the reasonableness test later in 2026.