Think tank report criticises moves to mandatory flexible working
Flexible working can be beneficial in some circumstances, but its economic costs are rarely assessed properly and are frequently ignored in policymaking, according to a new report produced by the Institute of Economic Affairs (IEA).
It argues that the new, stronger “right to request” flexible working in the Employment Rights Act 2025 (ERA 2025) will be much harder for managers to resist, and even dealing with such requests will impose costs on companies. The Government is currently consulting on plans to improve access to flexible working .
The IEA agrees that flexible working should be supported where it is genuinely voluntary between employers and staff but suggests that, if the Government moves to effectively mandate flexible working, it risks imposing a “stealth tax” on jobs, wages and productivity. Its 70-page discussion paper, Is Flexible Working?, warns of particular problems in the public sector, given its existing poor productivity record.
Under ERA 2025, employers face greater legal risk when refusing flexible working requests, even where such arrangements would harm performance, the IEA claims. It argues that this will pressure firms into accepting inefficient practices, with the resulting costs quietly passed on through slower wage growth, reduced hiring and higher consumer prices — in effect a stealth tax borne by workers and the public.
Professor J.R. Shackleton, co-author of the report, said: “Flexible working is rarely a free good. The costs are real, highly specific and often hidden — and Government simply cannot measure them.”
