Flexible Working

Research published by Unison last week found that 30% of women working in the public sector (including the NHS) have had their flexible working requests denied, with 25% of those workers having their requests denied more than once.  

That research is of particular note given that in less than two months’ time, on 6 April 2024, the right to make a flexible working application will become a day one employment right - employees will no longer be required to have 26 weeks’ continuous employment to make a request (see previous update). 

The ability to make multiple flexible working requests is already a day one right in the NHS (s.33 Agenda for Change).

Ahead of the upcoming changes, this article looks at:

• The recent flexible working case of Miss E Wilson v Financial Conduct Authority which in the words of Judge Ritcher “raises a key issue in the modern workplace and which will no doubt be the subject of continued litigation;” and
• the January 2024 revisions to the ACAS draft Code of Practice on requests for flexible working.

Refusing a Request to Work from Home: Miss E Wilson -v- Financial Conduct Authority 

Background 

Miss Wilson (‘the Claimant’) was employed as a senior manager earning around £140,000 a year at the FCA when she submitted a flexible working application on 9 December 2022.

Initially, her employment contract was entirely office-based, however, due to reasons connected with the Covid-19 pandemic and national lockdown, she had been working entirely remotely for over two years.

Following the pandemic, the FCA introduced an attendance policy mandating staff to work 60% remotely, and 40% in the office. This prompted the Claimant’s flexible working application which sought to amend her terms of employment, to allow her to work entirely from home.

The Claimant’s line manager refused the application on 2 March 2023 on the basis that, whilst the Claimant had worked well from home, approving the request could have “a detrimental impact on performance or quality of output”. The Claimant appealed the decision internally, but her appeal was rejected by the FCA on 29 March 2023. The Claimant then submitted a claim to the Employment Tribunal (‘ET’).

The Law

The statutory flexible working provisions are contained in the Employment Rights Act 1996 and The Flexible Working Regulations 2014 (as amended) and provide, in summary, that a qualifying employee may apply for a change in the terms and conditions of their employment.

The provisions set out the employer’s duties in relation to an application; namely, that an application should be dealt with in a reasonable manner and shall only be refused if the employer considers that one or more of the following grounds applies:

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. such other grounds as the Secretary of State may specify by regulations.

Currently, an employee should be notified of an employer’s decision in respect of an application (including the finalisation of any appeal process) within three months. This time limit is set to reduce to two months from April 2024.

If an employee makes a flexible working application, they may (amongst other potential claims) bring a claim in the ET on the grounds that the employer has failed to comply with the statutory provisions, and/or that the decision by an employer to reject the application was based on incorrect facts.

Judgement 

The issues for the ET to decide in Wilson focused on alleged procedural failings, namely: 

1. Whether the FCA had failed to communicate the outcome of the application within the statutory three-month decision period; and
2. Whether the FCA had rejected the application for flexible working based on incorrect facts (ie that working entirely remotely would have a detrimental impact on quality and performance).

The ET found in the Claimant’s favour in respect of the first question, concluding that the three-month time limit was breached by 21 days. The Claimant was awarded one week’s pay in compensation - £643 due to the statutory cap. The maximum compensation for such a breach is eight weeks’ pay.

In respect of the second question, however, the ET rejected the Claimant’s claim and found that the FCA’s decision had not been based on incorrect facts. The judge was impressed with the evidence of the Claimant’s line manager and felt the merits of the Claimant’s application were genuinely considered, as opposed to the FCA simply trying to reinforce their attendance policy. 

The line manager had considered the Claimant’s previous strong performance when working remotely, but felt that working solely remotely would impact the quality and performance of work, such as: meeting and welcoming new staff members; internal training, supervision and department needs where a line manager has a visible presence in the office to provide advice and support to team members; attendance at in-person events, conferences etc; and attendance at weekly meetings where information is imparted by senior managers and individual and team successes are acknowledged and celebrated 

The judge took account of the managerial responsibilities and seniority of the Claimant and agreed that the above factors in particular envisaged a physical presence by the Claimant in the office and commented that it was “trite to observe they simply cannot be achieved in the same way through remote working.”

Comment 

Litigation in this area is only set to increase as we move further away from Covid-19 pandemic practices where casual homeworking and hybrid working practices became the norm, with some employers now wanting to re-introduce a level of mandatory office attendance. 

The volume of flexible working applications is also expected to rise once the legislative changes making flexible working a day one right, and allowing employees to make up to two flexible working requests per year, come into force. These arrangements have of course been in place in the NHS for several years.

It is important to note that the case of Wilson is not binding and was highly fact-specific. However, it shows how employers can validly refuse flexible working requests for one of the business grounds detailed above. The reality, though, is that there will not be a one-size-fits-all approach for employers, and this was acknowledged by Judge Ritcher in the ET’s decision (our emphasis added):

“The need for staff to provide a physical presence at an office location is a debate which many companies are now engaged in and which the solutions arrived at will no doubt differ considerably from employer to employer, there will not be one solution which will work for all companies or even for all roles within a company. There is at the heart of many of these considerations a ‘qualitive debate’ as to whether face to face or virtual contact is better. Ultimately it may be the case that each situation requires its own consideration.”

Employers should therefore always give serious consideration to any flexible working applications and should review each application separately and on its own merits. Requests should be considered with an open mind and alternative solutions should be explored if the original request cannot be accepted. Where employers are unsure whether a flexible working arrangement may work in practice, trial periods are a useful way to assess the practicalities and effectiveness of the arrangement. 

If an employer rejects a request, it will be key to show that the reasoning is well-founded and has been communicated clearly (keeping records of any meetings and correspondence will be essential).

Although not dealt with in this case, employers should be alert to the risk of other potential claims arising out of the refusal of a flexible working request, such as a claim for discrimination. For example, indirect discrimination related to sex has commonly been a risk area for employers in the context of work patterns/arrangements (eg where an employer requires all staff to work full-time) given the acknowledgment by the ET in a number of cases of childcare disparity/the burden borne by women.   

In addition, since s19A of the Equality Act 2010 (EqA) came into force on 1 January 2024, employers face increased exposure to indirect discrimination (same disadvantage) claims because this new provision may allow a wider group to bring claims. Using the requirement to work full-time example, a man with childcare responsibilities who suffered substantially the same disadvantage from this working arrangement as women could not claim ordinary indirect discrimination because there is no group disadvantage (ie the man is not part of the group of women who are disadvantaged). However, under s19A EqA a man could bring an indirect discrimination (same disadvantage) claim on the basis that he suffered substantively the same disadvantage as the women affected - necessitating the employer’s objective justification of its practice. Employers should ensure these risk areas are borne in mind when considering flexible working requests.

The case of Wilson also emphasises the need for flexible working requests to be dealt with expeditiously and that the time limit is a strict one. As mentioned above, this time limit will change from three months to two months in April 2024 and it will be important (if there is an appeal) to ensure that process is completed within this reduced time-frame. 

Updated ACAS Draft Code of Practice on Requests for Flexible Working – January 2024

In July 2023, ACAS launched a consultation on proposed revisions to its Code of Practice for employers on how to handle flexible working requests in a reasonable manner and produced a draft Code (see previous update)

This was recently revised following consultation, and an updated draft Code was published on 11 January 2024 which can be found here.

The revised January 2024 version of the draft Code:

• Introduces a requirement that unless the employer decides to agree to the employee’s written request in full, they must (rather than ‘should’) consult the employee before they make a decision;
   
• Clarifies what parties may seek to discuss at a flexible working request meeting – including the potential benefits or other impacts of accepting or rejecting the request, practical considerations involved in implementing the request, any potential modifications to the original request, any alternative flexible working options that may be available and suitable for both sides, and whether a trial period is appropriate.
   
• Confirms that the written outcome should offer the employee an opportunity for a discussion to clarify any further information that may be helpful in implementing the agreed arrangement (ie agreeing dates to review how the arrangement is working).
   
• Explains that there is no statutory right of accompaniment at meetings held to discuss a request for flexible working, but allowing an employee to be accompanied would be good practice;
   
• Clarifies that there is similarly no statutory right of appeal against a decision about a request for flexible working, but allowing an employee to appeal is good practice. Any written outcome should make it clear that the employee has the option to appeal the decision and the procedure for this;
   
• Emphasises the importance of written records being kept of any discussions/appeal meeting.

The Code is expected to come into effect in April 2024 if approved.