In the first in a series of articles looking more closely at the upcoming developments in employment legislation, Prettys’ Senior Associate, Sheilah Cummins focuses on flexible working.  In particular, the changes coming into force on 6 April 2024 and how the recent case of Wilson V Financial Conduct Authority has helped to clarify the approach employers should take when dealing with flexible working requests.

The new Flexible working regulations

In April, the Flexible Working (Amendment) Regulations will come into force and will apply to all flexible working applications made on or after 6 April 2024.  Employers should note that from that date: 

• the 26 week qualifying period is removed and the right to make a flexible working request will apply to all employees from the first day of employment; 

• employees will be able to make two flexible working requests in any 12 month period (up from one per year);

• employees will no longer be required to set out what they think the effect of the change applied for will be and how that effect should be dealt with; 

• there will be a two month timescale (reduced from three months) for dealing with and communicating the final decision (including any appeal) to the employee; 

• Flexible working requests cannot be refused without first consulting with the employee;

As a result of these changes, employers may find that: 

• for a short while they are dealing with flexible working requests under both the new and old statutory regimes;

• they are fielding a greater number of flexible working requests, taking up more line management time, particularly with the additional requirement to consult with the employee before the application is refused;

• new recruits quickly apply to vary their working hours (despite accepting employment based on original hours offered); and

• employees immediately resubmit a flexible working application following communication of a final refusal decision. 

There is no change to the eight statutory grounds for refusal, and employers will still be required to justify their business reason(s) to reject an application in light of those grounds. 

However, with there now being no requirement on employees to explain what effect their proposed change may have, and how it can be dealt with, it will be even more important for employers to give the application full, detailed consideration, looking at all the potential effects and options, before coming to a decision. 

Whilst there has been no change to the law in terms of the way employers are expected to approach flexible working requests (i.e. their decisions should always be sufficiently resilient to withstand scrutiny), the case of Wilson v FCA serves as  a timely reminder.   Although it is a first instance decision, and therefore, non-binding, it nevertheless provides much-needed clarity as to how employers should approach flexible working requests in order to better defend themselves from claims. 

Background

Ms Wilson was Senior Manager within the FCA. She had four direct reports and 10 indirect reports. 

In early 2020, as a result of concerns about the Covid 19 pandemic, Ms Wilson began working from home for health reasons.  Lockdown was subsequently introduced and she remained working from home, along with her colleagues

Following the pandemic, the FCA sought to reintroduce office working on a 40/60 basis (40% office and 60% home). Ms Wilson submitted a statutory flexible working request asking to work from home 100% of the time.  She did not give any reasons why she wanted to work from home but, when specifically asked, confirmed that it was not medically related. 

Due to a confusion on the part of her line manager, Ms Wilson’s application was not immediately progressed, leading to some delays in the process. 

However, following a meeting to discuss the request in further detail, Ms Wilson’s line manager refused the request, citing the statutory grounds of detrimental impact on quality and performance.   Whilst her line manager accepted that Ms Wilson’s overall performance was excellent, she felt that 100% remote working would affect Ms Wilson’s ability to, for example: meet and welcome new staff; provide internal training and supervision; and attend in person events and weekly meetings.  These were matters which the line manager regarded were more effective when they were carried out in person.

Ms Wilson appealed the decision but her appeal was not upheld.  

Ms Wilson subsequently lodged a claim in the Employment Tribunal alleging that: 

1. the statutory period for dealing with her flexible working request had been breached; and

2. the line manager’s decision (i.e. that granting Ms Wilson’s request would lead to a detrimental impact on quality and performance) was based on “incorrect facts”

Decision

On the first issue, the Tribunal agreed that the three month statutory period for dealing with flexible working requests had been breached.

The flexible working application had been submitted on 9 December 2022 but the final appeal decision was not communicated to Ms Wilson until 29 March 2023.

The Tribunal did not consider that the FCA had any reasonable excuse for not progressing Ms Wilson’s application within the statutory timeframe.  The purpose of having a specified timeframe, the Tribunal clarified, is to ensure such applications are processed expeditiously and not sat on indefinitely.  The Tribunal expected that an organisation of the size, and with the resources, of the FCA should have been well-placed to deal with the application in a timely manner. If it could not manage that, it would have  been open to them to agree an extension with Ms Wilson, which they did not do.

The Tribunal did, however, take into account that the FCA had been progressing the application nonetheless and the final decision was notified only shortly after the statutory time limit expired.  For this reason, it awarded Ms Wilson compensation of one week’s pay out of a possible maximum of eight weeks.

In relation to the substantive issue (that the grounds for refusing Ms Wilson’s application was based on incorrect facts),  the Tribunal accepted the line manager’s evidence that the nature of Ms Wilson’s role as a senior manager meant that there were some aspects of her role that might suffer as a result, such as the ability to participate rapid discussion and debate, and to pick up on non-verbal cues. 

The Tribunal’s view was that the FCA had determined Ms Wilson’s application in accordance with the statutory scheme.  Ms Wilson’s line manager had not just trotted out the same old shpiel in her response, as some businesses often do.  Instead, she had genuinely considered the merits of Ms Wilson’s application in the context of her role and working environment.  Her line manager had identified some real issues arising from Ms Wilson’s request to work from home 100% of the time, and applied a “qualitative assessment” of those issues before communicating the decision. 

The Tribunal accepted that, as a result of Ms Wilson’s seniority, there were some elements of her role that “cannot be achieved in the same way through remote working” however good the technology, and however well-performing Ms Wilson, may be.  The fact of the matter, in this case, was that Ms Wilson was “not performing in the way envisaged by the [FCA]” and, in view of this, the FCA was entitled to conclude that this could detrimentally impact on her work. 

Ms Wilson’s claim was dismissed.

Comment

The move from office to home working environments may have been inevitable in the long-term as technologies improved.  However, there is no doubt that the COVID-19 pandemic accelerated this change beyond all expectation. 

Decisions to reduce, or completely relinquish, office space were taken off the back of it.  Recruiting staff from a national or international (as opposed to a local) pool of candidates became commonplace.  After all, the pandemic has proved, has it not, that a business could continue as normal without the office environment?  Why not reap the benefits by saving money on prime real estate and searching for a perfect employee from a world-wide bank of candidates?

Against this backdrop, it is perhaps to be expected that some employees are reluctant to return to the daily commute.  Convincing them that office working is both necessary and productive has, in some cases, proved extremely challenging. 

Points to note 

Whilst the Wilson case is fact-specific, there are some useful general principles to be drawn from it.  In particular, 

• the Tribunal confirmed that there is no requirement on employers to agree to remote working; 

• the role/seniority of the employee is relevant to the decision;

• the line manager was praised by the Tribunal for fully considering all the issues as they applied to Ms Wilson; she did not just vaguely reference some outdated company “policy” on home or remote working;

• the line manager carefully recorded her decision-making process and this made it easier for the Tribunal to follow her assessment and test the veracity of the issues raised; and

• Ms Wilson had not, provided any reason why it was necessary for her to work from home.

It is possible, therefore, that had one or more of these factors been different, the outcome for Ms Wilson could have been different.  For example: if Ms Wilson had not any direct reports; if her line manager had been less conscientious at identifying specific operational and logistical issues that Ms Wilson’s request created and assessing these against the possible consequences; and if Ms Wilson herself had better articulated why she required home working. 

Top Tips

It cannot be overstated that this approach taken by the line manager in Wilson is the approach that employers should be taking in any event. 

Unfortunately, as experienced employment lawyers, we find this kind of detailed analysis is more often the exception rather than the rule. 

With the likely increase in flexible working applications as a result of the new legislation, therefore,  we set out below some of our key tips to help employers manage the process more effectively:  

• Train managers to ensure they know how to identify and deal with a request. Ensure they are aware of the shorter timescale for dealing with, and communicating the final decision, and to liaise with HR at the earliest opportunity. 

• If timescales look like they might be exceeded, agree an extension with the employee.

• Keep track of flexible working requests and outcomes so you can easily spot if someone does not have a right to make a flexible working request. 

• Consider each request and the impact individually.  Ensure decisions are resilient and can be justified in the circumstances.

• Consider all options and alternatives with the employee.  This could reduce the risk of re-applications if an employee feels their request has been properly addressed.

• Consider whether there are any other statutory obligations that need to be taken into account, such as the duty to make reasonable adjustments; 

• Make a written record of your decision-making process; and 

• Update flexible working policies to reflect the new legislation. 

If you require help or advice in relation to flexible working applications, or any employment issue, please contact Prettys Employment Team on enquiry@prettys.co.uk or 01473 232121