COPING WITH THE EMPLOYMENT ACT: Employees have gained the right to flexible working patterns under the 2002 Employment Act

Many agencies already offer this, but moving it from the discretion of management into the arms of the law is likely to bring complications, Kevin May argues.

Did you hear about the graduate trainee who complained to her boss that she didn't want to stay for the departmental meeting at 6.30pm that evening because she'd checked her contract and could find nothing in it that obliged her to attend such out-of-hours gatherings? She didn't last very long.

It's not that contracts are unimportant. It's good to have the details of notice periods, salary packages, perks and holiday entitlements down in black and white. But in an industry such as advertising, the contract of employment goes beyond what the ink on the paper says. Advertising is not a rigid nine-to-five occupation, but therein lies a flexibility that cuts both ways. On occasions you might have to work all weekend, but then on others nobody is going to care much that you didn't quite make it back from lunch. Sometimes you have to skip lunch altogether, but it's OK if you leave early to get to Billy's school play. This give and take is not reluctantly offered, but at the heart of any decent management strategy. As Duncan Bird, the managing partner of Soul, comments: "You want people to stay with you. If you don't look after people it just boils down to money and then you get into stupid auctions."

That's not to say that it's a free for all; you have to earn the right to be indulged. It's not a given, but a question of management discretion.

At least, it has been up to now. It may all be about to change with the 2002 Employment Act and some specific provisions that came into legal effect on 6 April (see panel).

At first glance, there is little to be disturbed about here. Advertising, being a relatively progressive industry, already offers many of these options. The business has a good reputation for handing out more than just the legal minimums. The old rules allowed for 40 weeks of maternity leave after one year's service, so another 12 weeks on top of that is not going to make much difference. Many agencies already allow extra time off for new fathers. As for those who adopt, it's not exactly mainstream and for those few who do it, why not let them have some time off to settle down with their new families? Even the stuff about flexible working needn't raise too many eyebrows anymore. Plenty of women around town already hold down senior agency posts on less than a standard five-day week to accommodate the demands of motherhood. Most agencies pride themselves on an enlightened ethos that allows employees to enjoy their lives outside work and not feel enslaved to the office. It's one of the upsides of the advertising game.

Many agency bosses welcome the new rules and it's hard to find anyone to go on the record to say that they think there could be problems. But Mary Budd, the employment affairs advisor at the IPA, warns: "The industry is going to be in for a shock. Everyone thinks that they're prepared for this and can take it in their stride, but the changes are going to be more radical than most are expecting." Everyone is used to coping with occasional maternity leave in their midst, but add the rights of parental leave and accrued holiday and mothers may be taking 14 months off. Factor in statutory paternal leave (not just for biological fathers) and adoption leave, and a surprisingly high proportion of an industry such as advertising - where many employees are of child-bearing age - may soon have extended leave from work.

As for flexible working, it may work at a low level but what happens when it becomes the norm? Johnny Hornby, a managing partner of Clemmow Hornby Inge, says: "We're in a competitive service industry and it might be manageable having small-scale flexible working, but it'll be tricky if it becomes widespread."

The issue with this new legislation is that it takes the indulgence of unconventional working patterns out of the arena of management discretion and into that of legal rights. This has a two-fold effect.

First, it extends the franchise considerably. A key part of the new rules is that the criteria be applied universally. There can be no bending over backwards to accommodate your best people while conveniently sidelining your less-than-star performers. It's no longer a reward. If the company can cope with a certain regime for one individual, it has to make that available to all who share the same circumstances. It's unlikely to remain on a small scale. That proportion of employees at child-bearing age - well over half the industry - are going to be entitled, beyond maternity leave, to apply for a further six years of flexible working. And this could include some men too.

Second, because it is no longer a discretionary reward, there is no payback for management in terms of employee gratitude, loyalty or motivation.

The indulgence becomes perfunctory like lunch hours, holiday entitlements and use of the company telephone. As a management tool, the quid is firmly ripped from the pro quo. The agency boss whose off-the-record comment was "bollocks to that, it's not going to work" perhaps has a point but is missing it too. There is no choice here. It's now the law.

Beyond these issues of culture, this new legislation brings with it two other banes of management: red tape and compensation. Flexible working will now involve an official process. As one beleaguered human resources head moaned: "We've been given legal advice that following the correct procedure is almost more important than the decision." The Department of Trade and Industry website sets out the whole gamut of what's involved in a 57-page document, but in essence there are seven forms to be completed in a ten-stage process that can be dragged out over an 84-day period and then the case might go to tribunal. There are eight reasons for potentially rejecting a request, effectively obliging the employer to demonstrate that any proposed revised working pattern will have a detrimental effect on the business. The employer also has to show that each individual request has been given proper consideration and that any decision criteria have been applied universally to all employees. If the case reaches tribunal, the direct penalties are wrist-slapping. When an employer is found to have acted improperly, compensation of up to eight weeks' pay - subject to a statutory cap of £260 (a total of £2,080) - can be claimed. However, given that most requests are expected to be by women, it is possible that sex discrimination legislation may come into play. Then the potential for compensation goes supernova.

But it doesn't stop there. Sex discrimination legislation might also weigh in on the side of childless employees who are, arguably unfairly, excluded from the opportunity to renegotiate their working patterns. There have already been cases brought in other industries on these grounds.

Even if it doesn't get to the point of legal redress, there is bound to be a degree of resentment from those left behind to take up the slack.

As Christine Walker, a partner of Walker Media, comments: "The focus here is all on those with children, with no allowance for the stress this is going to put on co-workers." Some agencies recognise this and are preparing to extend opportunities for flexible hours to all employees. But there is a limit to the proportion of its employees that a service industry can have working to a non-standard regime.

It may be an over-reaction to be such a harbinger of doom on this. We've seen potentially alarming legislation before. Disability discrimination laws mean you can't block blind people from a position for being blind per se, even if that job involves tasks broadly requiring sight. You're not allowed to reject an applicant for the job of providing maternity cover simply because she is seven months pregnant herself. But in reality these eventualities are few and far between.

We may not yet be at the stage where most employees figure that they usually do a full 40 hours in the first four days of the week so may as well apply to have every Friday off, but the climate is changing. There is also provision in the pipeline for pay transparency that will make finding out what colleagues are earning much easier and oblige employers to disclose details of any bonus payments to the workforce at large. Currently, discrimination laws cover sex, race and disability. By the end of this year that will be extended to sexual orientation and religion. And by 2006, it will embrace age as well. Anyone progressive enough to take a 60-year-old on to their graduate trainee programme?

The principles behind this legislation are hard to fault, and advertising has made great efforts to get ahead of the statute book by nurturing a broader church than can be found in many other businesses. The shame is that what seemed to work informally now has to be made law. As Robert Senior, a managing partner of Fallon, puts it: "That the Government feels the need to make legislation on this is more a comment on the state of British industry and its employee relations as a whole." Advertising is a comparatively small industry trying to offer a 24/7 service, and those purportedly welcoming these changes may yet end up ruing their introduction.

WHAT ARE THE CHANGES?

- Ordinary maternity leave extended from 18 weeks to 26 weeks for all employees.

- For natural parents, an option of an additional 26 weeks of unpaid maternity leave and the introduction of two weeks' paid paternity leave to be taken within 56 days of birth (paternity leave applies to biological father or mother's husband/partner).

- For parents who are adopting a child, 26 weeks of paid maternity leave also with the option of a further 26 weeks of unpaid leave. Two weeks of paid paternity leave for other partner. These allowances are equally available for same-sex couples, but one partner must be nominated for "maternity" leave and the other for "paternity" leave.

- Rate of maternity pay to be 90 per cent of normal wage for first six weeks, and revert to Statutory Maternity Pay of £100 per week thereafter (provided that this does not exceed 90 per cent of normal pay). Paid paternity leave at SMP rate. Some of these costs will be recoverable from the Government for small agencies.

- For parents with responsibility at home for child(ren) under the age of six years (or 18 years, in the case of disability), the right to apply for an altered working pattern in order to facilitate caring for the child(ren).

- Employees will be allowed to request a change to the hours they work, a change to the times when they are required to work, or to work from home.

- Only one request can be made per year and any change that is agreed represents a permanent change to the terms of the employee's contract.

The agency is duty bound to give full consideration to any request, to detail in writing the reasons for any rejection, and to apply the same criteria when assessing requests equally to all employees regardless of other considerations. Further details at www.dti.gov.uk/newlawsforworking parents/flexibleworking.

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