Homeworking – how can I say no to an employee’s request?

Employment Partner, Mark McKeating discusses the Wilson v Financial Conduct Authority case.

Perhaps one of the biggest post-pandemic challenges for employers has been dealing with employees requesting to work from home.  Employees will frequently argue that it worked during the pandemic/lockdown period, so why can’t it work going forward.

ACAS have reported that 3 in 10 employers have seen an increase in staff working from home over the past year.  This number is likely to increase with the right to request flexible working becoming a ‘day 1 right’ for staff later this year.

I look at a recent decision in the Croydon Employment Tribunal where the employer, the Financial Conduct Authority) was largely successful in defending a claim brought by an employee following a request to work from home on a permanent basis as a form of flexible working.

First, let me recap on the legal framework for employers considering flexible working time requests.

The legal position

An employee who has made an application under the statutory procedure (section 80H Employment Rights Act 1996) may bring a claim on the basis that:

• The employer failed to deal with their application in a reasonable manner.
• The employer failed to notify them of the decision on their application within the decision period.
• The employer rejected the application for a reason other than one of the statutory grounds.
• The employer’s decision to reject the application was based on incorrect facts.
• The employer treated the application as withdrawn but neither of the grounds entitling the employer to do so applied.

The Tribunal has the power to make:

• An order for reconsideration of the request. If it does this the date of the tribunal’s order will be treated as the date of the request.
• An award of compensation to be paid by the employer to the employee, of such amount as the tribunal considers just and equitable, up to the permitted maximum of eight weeks’ pay. The statutory cap on a week’s pay applies (currently £643 per week).

The request must be addressed within three months from receipt of the written request. Employers should meet with the employee to discuss the request and provide a decision in writing.

The employer is permitted to refuse a request on any of 8 statutory grounds.  These include:

• increase and the burden of additional costs
• an inability to reorganise work amongst existing staff
• an inability to recruit additional staff
• a detrimental impact on quality
• a detrimental impact on performance
• a detrimental effect on the ability to meet customer demand
• insufficient work for the periods the employee proposes to work
• planned structural changes to the business

Reasonable grounds do not include the simple fact that some employers dislike employees working from home or it may lead to everyone putting in a request.

Wilson v Financial Conduct Authority

The Claimant (Miss Wilson) worked as a senior manager for the FCA.  She earned a salary of £140,000.

On 9 December 2022 Miss Wilson submitted a flexible working application.  She sought a change to her terms of employment to enable her to work entirely remotely and without ever attending a physical office location.

In or around the early part of 2020, there was an agreement between Miss Wilson and the FCA that she could work from home for “health reasons”.  These do not appear to be connected with the growing awareness of the COVID-19 virus.  When the virus spread, the FCA made wholesale changes to working practices with most of their staff being told not to attend the office.

Following the easing of the pandemic restrictions, the FCA reviewed their working practices and settled upon a policy that staff should attend office locations for 40% of their working time and 60% of their hours could be worked remotely.

During consultation with her manager, Miss Wilson stated that she was able to perform her job permanently from home, in fact, she had done so very well during the last two years and had built effective relationships with colleagues despite not meeting in person.  Miss Wilson directly managed 4 employees and indirectly managed a further 10.

Her application was refused on the basis that approving the request could have a detrimental impact on performance or quality of output.

Specifically, the manager found that Miss Wilson would not attend face to face training sessions, departmental away days/meetings and she would not be able to provide face to face training or coaching to team members or new joiners.  She was also concerned that Miss Wilson’s ability to input in management strategy meetings and be involved in in-person collaborations would be negatively impacted.  This would be particularly felt as Miss Wilson was a senior manager and played a vital leadership role for the department.   It was a reasonable expectation within the organisation that junior colleagues would have the ability to meet senior managers in person from time to time.

Miss Wilson appealed the decision.  She provided examples where she was able to perform her role effectively working from home.  She referred to an award that she had won and good ‘360 feedback’.

The appeal manager upheld the original decision. Reliance was placed on the fact that Miss Wilson was a senior member of the department and part of the senior leadership team and therefore her performance and output cannot just be viewed through her own perspective.  It had to be viewed in relation to those that she manages directly and indirectly within her chain of command.  Whilst her performance was good and it was reflected in her end of year grade, it was reasonable for the FCA to conclude that it would still be better and of real benefit to Miss Wilson and in particular her team and her team’s performance if she was able to connect with her team in person.  This was in line with the FCA’s ethos and staff policies.

The Employment Tribunal claims

Miss Wilson pursued two claims arising from the statutory procedure.

1. That the FCA failed to communicate the appeal outcome within the decision period of three months.

The Tribunal found in Miss Wilson’s favour on this point. The FCA had failed to deal with the application within three months and also failed to reach agreement with Miss Wilson to extend the time for full consideration of her request.  Compensation of one week’s pay (agreed at £643) was due in compensation for breach of the notification time limit.  The Tribunal considered that any breach was at the lower end of the scale as the FCA had given proper consideration to the request and delivered their decision within a few weeks of the deadline.

2. The rejection of her flexible working request was based on incorrect facts, namely that it would have a detrimental impact on quality and performance.

The tribunal found in favour of the FCA on this point.

Judge Richter considered that the FCA was “right to identify weaknesses with remote working”.  The Judge was satisfied that the FCA had genuinely considered the individual merits of the application as opposed to simply seeking to enforce its attendance policy.

In particular, the Judge highlighted the manager’s evidence in relation to the detrimental impact on the quality and performance of Miss Wilson’s work which included;

• meeting and welcoming new staff,
• internal training,
• supervision,
• departmental needs where a line manager has a visible presence, and
• attendance at in-person events, conferences and planned meetings and attendance at weekly cascade meetings where information is shared by senior managers and individual and team successes are acknowledged and celebrated.

Miss Wilson argued that the factors highlighted above were overstated as the department had been successful and she had played an important part in that success.  She also emphasised that the FCA had excellent technology and so many of the disadvantages were not real.

At the end of the hearing the Judge observed:

“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 out 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.”

The Judge also commented that there is a limitation to the ability to observe and respond to non-verbal communication which may arise outside the context of formal events, but which nonetheless forms an important part of working with other individuals.  This is particularly when considering the senior position held by Miss Wilson.

Take away points:

• Whilst this is a first instance decision and is not binding on future tribunals, it is an indication of some of the considerations which will be taken into account by an employment tribunal when considering applications for flexible working (including home working).
• Employers may also have to consider other issues such as childcare and any health and wellbeing concerns identified by employees. Had Miss Wilson requested to work from home on a permanent basis because of a disability this may well have tested the FCA’s reliance on detrimental impact to quality and performance. Employers should take advice on such cases as there is a risk of discrimination claims arising from decisions to reject such applications.
• Tribunals look favourably upon employers who are prepared to make some compromises if the employee’s initial request is rejected.
• Managers should be consistent in how they enforce attendance policies and offer training for line managers to help ensure that they are clear on the employer’s expectations and that requests for flexible working are treated reasonably and fairly.
• Employers should also note that the changes to the statutory scheme coming into effect on 6 April 2024. The changes include a reduction to two months in the period that employers must deal with flexible working requests (unless an extension can be agreed). ACAS have also updated its Code of Practice on Flexible Working (subject to parliamentary approval which is a formality). The updated Code reflects the full changes made to flexible working from 6 April 2024.

Should you require any advice on flexible working time requests or any other matter please contact Mark McKeating on email at mark.mckeating@kuits.com or 0161 912 6147.